Saving seed to plant for the next season is something people have been doing for thousands of years. It is essential to our survival.
Section 17 of the Plant Breeder's Rights Act 1994 (PBR Act) specifically allows farmers to reuse seed and other propagating material, within certain conditions.
Known as the Farm Saved Seed (FSS) provision, section 17 provides a significant exemption from infringing plant breeder's rights (PBR).
However, there are conditions:
- The farmer must legitimately purchase the original PBR protected variety (G0 or generation zero), and pay the royalty. A handshake deal with a neighbouring farmer doesn't qualify.
- The propagating material derived from step 1 is used for further reproduction. Selling material produced by G0 is acceptable. Using material for cattle feed on farm is not further reproduction.
- Some species of plants and seeds (or more accurately ‘taxon’) are declared in the PBR regulations as exempt from the operation of FSS, and must not be used as farm saved seed.
Rights of the PBR owner
PBR owners control the commercial use of their variety. However, they cannot prevent a legitimate customer reproducing infinite generations of propagating material for use on a farm.
Australia's PBR Act balances the farm saved seed tradition with reasonable opportunity for the PBR owner to commercialise their new plant variety. PBR owners may request contracts restricting multigenerational reproduction of the propagating material. Such arrangements are based on contract law and not the PBR Act.
Reason for exemptions
As with any intellectual property law, private and public interests have to be balanced.
There are many public benefits from the farm saved seed provision including:
- managing and sharing the crop production risks
- reducing the transaction and transport costs of purchasing new seed
- giving growers access to seed when they need it.
Farm saved seed exemption exceptions
Section 17 of the PBR Act has a further condition whereby it is possible for the PBR Regulations to declare a particular taxon (a species) exempt from the farm saved seed provision. This would increase the monopoly rights granted to a PBR owner.
To date this condition has not been used. For such an exemption to be made, a clear market failure would have to be established within the balance of public and private interests.
Farm saved seed in court
Case law shows how farm saved seed (section 17) works with the definition of PBR (section 11), and where PBR can extend to harvested material in some situations (section 14).
The 2004 Federal Court case Cultivaust Pty Ltd v Grain Pool Pty Ltd considered two main issues involving farm saved seed:
- Authorisation - whether propagating material had been produced without the PBR owner's consent.
- Reasonable opportunity - whether the PBR owner had reasonable opportunity to exercise their rights over the propagating material.
The Court found that growing first generation crops (G1) from seed (G0) bought from the PBR owner is allowed because consent is implied in the original sale. Commercialisation of G1 crops is legitimate unless sold as ‘seed’.
However, subsequent generations (G2+) grown from FSS requires the PBR owner's permission to sell them for any purpose. This is because:
- authorisation to sell G2+ is not implied by the supply of the initial seed
- the farm saved seed exemption only allows the farmer to use G1 to grow crops G2+, it does not entitle the grower to do whatever they wish off-farm with material produced G2+
- section 14(2) describes subsequent generations (other than saved seed) as also being protected by PBR.
The Court decided that PBR owners have reasonable opportunity to exercise their PBR rights when selling the initial seed (G0). That exercising of PBR allows the owner the opportunity to include additional conditions which require authorisation, reporting or payment.
The Cultivaust Decision supports the concept of end point royalties (EPR) on harvested material. Broadly, EPR has been successful with wide spread adoption and compliance - particularly when grain is delivered through bulk handling facilities.
PBR owners should establish appropriate commercial arrangements at the time of first sale. If EPRs aren't defined in the terms of the first sale, it would be difficult for the owner to argue they did not have a reasonable opportunity.
More recently, a system of farmer-to-farmer licensing (or seed sharing) has been established for a limited range of varieties. In this model, the seller is licensed to sell or trade harvested seed over the fence, provided they complete a Seed Sharing Agreement with the purchaser and return it to the PBR owner. The agreement then allows the owner to establish the relevant commercial arrangements with the purchaser.