Possible implications of Brexit (in the UK and in other countries)

EU flag

INTRODUCTION

The United Kingdom will hold a referendum on continued membership of the European Union on June 23rd. All registered voters in the UK will get a vote and the outcome will be decided by simple majority. (Are you registered to vote? The deadline for registration is June 7th).

There are many arguments being put forward for leaving or remaining and it is for individual voters to make their own decision. However, we feel it is important to outline what we foresee as the likely implications of Brexit for plant breeders, both British and from other countries, and for growers, retailers, landscapers and gardeners. We should emphasize that it is difficult to be certain about what might happen after a possible Brexit. The Brexit campaign has not been able to say for definite what the policies of a post-Brexit government might be. Further, it is not clear what the negotiating position of the EU would be in such circumstances. However, whilst the issues laid out below are slightly conjectural, we believe that the situations that we propose are plausible and likely.

CURRENT SITUATION

In the first instance, it is important to realise that very few applications for Plant Variety Rights (PVR) now use the national PVR legislation of Member States. To prove this point, there has not been an application for a UK Plant Variety Right for an ornamental plant (except a few roses) since before 2012, and even then there were only a few each year compared to many thousands of applications for EU Plant Variety Rights.

Instead, breeders use the European Union Plant Variety Right administered by the Community Plant Variety Office (CPVO), which is an agency of the European Union. This provides a single Plant Variety Right that covers all 28 member nations of the EU. The main advantages of this are:

  • one set of forms/administration instead of separate forms/administration for each Member State
  • one set of fees
  • one DUS technical examination
  • uniformly legally enforceable across all 28 member nations – including any new nations that join in future (e.g. existing rights were automatically extended to cover Croatia when that nation joined the EU in 2013, without any additional cost to rights holders)

It is important to note that, whilst applications for EU Plant Variety Rights from plant breeders outside the EU are welcomed, they must be placed through an agent domiciled within the territory of the European Union. However, the geographical scope in terms of enforceability of the EU PVR is limited to the territory of the Member States. Ever since EU PVRs were introduced in the 1990s, their scope has never been extended to any nation that was not a member of the EU. It is, therefore, reasonable to assume that if the United Kingdom were to leave the European Union, EU PVRs would no longer be enforceable in the United Kingdom.

This leaves two problems.

EXISTING EU PVRs

The first problem is: what happens to all of the EU PVRs that have already been granted if the UK leaves the EU? Nearly 42,000 applications had been granted by the end of 2015, although not all of those continue to be valid – nearly 24,000 were in force at the end of 2015.

There are two possibilities. The UK and the EU could negotiate so that EU law regarding this intellectual property right would continue to apply in the UK. This would have drawbacks – not least, that the UK would be subject to a law over which it had no control and no power if the law was changed – there would be no seat at the EU negotiating table if the UK left. Given that the Brexit campaign is opposed to anything which gives the EU power over legislation in the UK, this outcome seems unlikely. Further, the EU PVR law has never been applied to any country outside the EU since it first came into force more than twenty years ago, so it seems unlikely that the EU would agree to such a solution.

Alternatively, the UK could give a special exception to the requirement of UK PVR for novelty for a transitional period (say, one year) so that holders of existing EU PVRs could apply for UK rights, perhaps limited in duration to match the remaining duration of the EU PVR. Naturally, there would be the normal fees involved for an application. The current UK fees levied by the UK Plant Variety Rights Office (PVRO) are £741 admin fee for the application itself, plus a fee for taking over a DUS examination report from another agency (in this case, the CPVO) which is the Sterling equivalent of the other agency’s fee. The CPVO charges EUR 20 for a certified copy of a report of no more than ten pages (which would be enough for most reports), which equates to £15.75 at today’s exchange rate. This means that every protected variety that the breeder wished to continue to protect in the UK would cost nearly £760 to protect – fees over and above those that were anticipated and in addition to the normal CPVO fees required for continuing protection in the rest of the EU. For varieties with only a few years left to run of their protection, this simply would not be worth doing – the breeder would lose the opportunity to derive an income from that variety in the UK for the remainder of the protection period. The PVRO works on a “user pays” basis and would not likely to be subsidized by general taxation, so any reduction to these fees seems unlikely.

This idea would work effectively (if expensively) for varieties where the application process for EU PVR is complete. For varieties where the application process has begun, but DUS examination has either not commenced or not completed and no DUS examination report is available, then it is reasonable to assume that the PVRO will require a DUS examination, as is required by the existing legislation. This attracts a much higher fee and is discussed further in the next section.

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NEW APPLICATIONS

The second problem arising from Brexit is: what are the implications for new varieties for which applications for PVR have yet to be made? The UK is a major market for ornamental plants, so it seems likely that breeders would still wish to have effective protection on both sides of the English Channel (and both sides of the north/south border in Ireland).

Again, the UK and EU could negotiate a situation whereby EU PVRs would continue to be valid in the UK. But, as outlined above, this seems extremely unlikely.

So, working on the reasonable assumption that two parallel systems for PVR would exist, one for the UK and one for the remainder of the EU, breeders would be faced with substantially increased costs. A comparison would be as follows, using applicable fees that are in force today:

EU PVR for a Petunia variety:

  • application fee: EUR 450
  • DUS examination fee: EUR 1570
  • TOTAL: EUR 2020 which is equal to £1590 at today’s exchange rate

UK PVR for the same Petunia variety:

  • admin fee: £741
  • DUS examination fee: £1480
  • TOTAL: £2221

Of course, the EU system also has an annual fee which must be paid after the PVR is granted. This is currently EUR 250 per annum, which equals £197.

So, PVR protection for the UK only would cost the same as protection for the whole of the EU, including the EU annual fee for the first three years. The UK PVR offers protection in a market of 64 million people. The EU PVR offers protection in a market of 510 million people (including the UK). You can draw your own conclusions about the cost-effectiveness of these systems.

In order to protect a new variety in both the UK and the remainder of the EU after Brexit, breeders will find that PVR costs would become roughly twice what they are now. (That does not include the extra administration that would be required. Furthermore, UK breeders would need to employ a procedural representative based within the EU to file their applications on their behalf – we currently charge £550 for that service, per application).

IMPLICATIONS FOR BREEDERS, GROWERS, RETAILERS, GARDENERS

You can easily see that Brexit will place a major cost burden on plant breeders. There will be three consequences of that and these consequences will have an impact on plant breeders regardless of nationality as well as on parts of horticulture which seem well removed from direct plant breeding activity.

Firstly, some breeders, especially those working on a small scale, will simply decide that it is no longer worth the effort and may scale back or stop their plant breeding activities. This could cost jobs.

Secondly, all breeders will consider whether it is financially viable to introduce so many new varieties. This will reduce choice and stifle innovation in new plants.

Thirdly, all breeders will look to pass the increased cost on in the form of increased royalties. This will increase costs for all growers and, ultimately, for retailers and gardeners. Plants will be more expensive.

OUR RECOMMENDATION

There are many good reasons to vote Remain on June 23rd – the wider economy, social cohesion, freedom of movement of goods and people. There are also good horticultural reasons – a robust and effective plant health system, access to suppliers and markets on the Continent.

But for plant breeders and innovators, we think that the argument is simple. Brexit can only make business more difficult and more expensive.

Therefore, we are recommending to our customers that they VOTE REMAIN ON JUNE 23rd and we ask that all of our customers and friends encourage their contacts to do the same.

Nagoya Protocol

The Nagoya Protocol is in the news and not in a good way. You can read the article here.

Breeders and growers must ensure that they are compliant with the requirements of the Nagoya Protocol. Plant material must be traceable to a permitted point of origin, whether it is to be propagated as is or used in a breeding programme. Failure to exercise due diligence in this regard could result in you not being able to market and promote the plant material concerned or anything bred from it.

Graham has been helping the Royal Horticultural Society with their Nagoya Protocol working group which is developing some advice for gardeners on how the Nagoya Protocol will impact them – it is expected that the advice will be published in the spring. In the meantime, if you would like advice on this matter, please contact us.

New regulations and advice for Xylella

APHA, the UK Animal and Plant Health Agency, has issued new guidance to professionals in horticulture (growers, retailers, landscapers, designers – in fact, anyone who trades in plants) regarding the updated regulations concerning the movement of plants that are hosts for Xylella fastidiosa. The list of hosts is being regularly revised and updated and includes several plants that we work with, including Cistus, Lavandula, Rosmarinus and Hebe.

This bacterium represents a major threat to European horticulture and agriculture. We need to be vigilant and proactive.

You can find the APHA information by clicking here.

IPM Essen 2016

Graham will be at IPM Essen from 26 to 29 January. Contact us if you would like to arrange a meeting.

IPM Essen is the world’s biggest trade show for the horticultural industry, featuring 1600 exhibitors from 50 nations. It uses the whole of the Messe Essen exhibition centre – so you’re unlikely to be able to see it in a day! It’s fun, hard work and the best opportunity to meet the leaders in global horticulture all in one place.

Display by Kientzler at IPM 2015
Display by Kientzler at IPM 2015

Patents vs Plant Variety Rights

The European Parliament today debated the conflict, potential or existing, between Patents and Plant Variety Rights. The discussion was driven by a proposed motion in the Parliament, which you can read here.

The excellent IPKat website has some analysis here, although it is worth noting that it would not be limited to fruit, but apply to all plants, including ornamentals.

Some incorrect information is being bandied about by campaigners and the media. The patents that are now being granted apply to variety traits (characteristics), not to varieties themselves. This is a critical distinction between PVR (which apply to varieties) and patents.

For example: Breeder A develops the world’s first blue daffodil.

As it currently stands, Breeder A has two options:

  1. Take out Plant Variety Rights. The PVR applies to the particular blue daffodil variety that Breeder A has developed. A competitor breeder can now exploit the breeder’s exemption within PVR law and develop further blue daffodil varieties by breeding from the original variety (provided that they are sufficiently distinct as to not be considered Essentially Derived Varieties [EDV]) or by reproducing the breeding process that Breeder A followed (which circumvents the EDV rules). Within a very short period of time, Breeder A’s new variety is subject to competition, even though Breeder A invested many years and considerable resources in developing the original new blue daffodil. Conversely, Breeder A does not have a monopoly, so other breeders can improve on the original blue daffodil by developing new varieties and can aid the consumer by creating competition in the market.
  2. Take a Patent in the blue petal colour trait in daffodil, even though it is the product of a natural biological process. This would give Breeder A a monopoly position and prevent anyone else from developing a daffodil with a blue petal colour, even if they did so independently. This would provide Breeder A with a good opportunity to commercially exploit their new variety and recoup their significant investment (an incentive to innovate) but would prevent anyone else from developing a competitor or improved variety (stifles the market; stifles innovation). There is currently no obligation on a patent holder to licence their patent to any other party. Also: patents are very expensive for the independent breeder, so they can’t get this level of protection for their own new developments.

So there are arguments for and against the use of patents. As it is, the deep-pocketed breeding companies (mainly in agricultural crops) are applying for large numbers of patents. They are beyond the budget of many smaller firms and independents. Additionally, these patents may prevent other breeders from developing new varieties if they possess a trait that is owned by a third party.

We expect to see this debate run and run. We also expect growing pressure for amendments to legislation, although that will be a long and tortuous process. For now, watch out for more and more patents.

A reminder of summer

Lavandula intermedia Olympia (l) and Lavandula angustifolia Blue Ice
Lavandula x intermedia Olympia (left) and Lavandula angustifolia Blue Ice at Downderry Nursery, July 2015

Whilst sorting through our photo library, we found this beautiful reminder of summer – Lavandula x intermedia Olympia (left) with Lavandula angustifolia Blue Ice. This photo was taken at Downderry Nursery in July this year. Olympia is one of the earliest intermedia varieties to flower, whilst Blue Ice is one of the last angustifolia types – so they make splendid bed-fellows, particularly with the striking contrast in flower colour. What you can’t tell from this photo is the super scent coming from the foliage and the gentle hum of bees working – lavenders are amongst the best plants for pollinators.

Both of these lavenders are in the PFE portfolio – contact us today for details of young plant suppliers for these varieties.

Chelsea – a few web links

We are crazy with preparations for the Royal Horticultural Society’s Chelsea Flower Show, which starts next week.

We will be launching three new varieties at the show. In alphabetical order, these are:

Pyracantha Golden Paradise in flower
Pyracantha Golden Paradise in flower

Pyracantha Golden Paradise – bred by Andy Parker from Essex, this is the world’s first golden-leaved fire thorn. We are launching this in conjunction with Hardy’s Cottage Garden Plants and plants will be available from them and from Coblands Nurseries. Wholesale supplies of young plants will be from Seiont Nurseries.

We’ve set up  a dedicated web site at http://www.goldenparadise.info

There is also a Facebook page at http://www.facebook.com/goldenparadiseplant and we’re using a Twitter hashtag #goldenparadise

 

Rehmannia Walberton's Magic Dragon
Rehmannia Walberton’s Magic Dragon

Second in the list is Rehmannia Walberton’s Magic Dragon – bred by David Tristram at Walberton Nurseries, West Sussex. This is a splendid garden plant, a sterile hybrid between R.elata and R.glutinosa (another world first). This is also being launched by Hardy’s Cottage Garden Plants. Plants are also being supplied to selected garden centres and retailers by the Farplants Group.

Website: http://www.magicdragonplant.info

Facebook: http://www.facebook.com/magicdragonplant

Twitter: #magicdragon

 

Salvia Love and Wishes individual flower
Salvia Love and Wishes individual flower

Last, but certainly not least, is Salvia Love and Wishes – bred by John Fisher in New South Wales, Australia. This is the third in the Wish Collection series of Salvia and has wonderful claret red flowers. It is a perfect partner for the existing varieties, Salvia Wendy’s Wish and Salvia Ember’s Wish (PDF files). This launch is in conjunction with William Dyson of Dyson’s Nurseries, who is returning to Chelsea after a long absence. Plants will also be available from J Parker’s and from garden centres and nurseries nationwide. Wholesale supplies will be by Delamore and Florensis.

Web: http://www.loveandwishes.info

Facebook: http://www.facebook.com/salvialoveandwishes

Twitter: #loveandwishes

 

All three of these plants have been entered in the new plant competition at the show. We will find out the winner on Monday…

IPM Essen

Graham will be at IPM Essen for all next week, meeting licensees, potential licensees, breeders, local territory agents and other contacts. Contact us if you would like to meet him there.

Christmas and New Year holidays

The Plants For Europe offices will be closed from 24th December and will reopen on 5th January. During the holiday, email and telephone messages will only be checked sporadically.

We will be processing last-minute applications for Community Plant Variety Rights on request, taking advantage of the existing fee levels right up to 31 December, before the new fees come into force on 1 January. Please do not delay if you have an application that you need us to process – we must have certain documentation from you in order to process an application and we must have time to prepare the application. But we remain ready to help and have dealt with a record number of applications this month!

We wish all our customers and friends a happy holiday. We’re looking forward to a very exciting 2015!

Let’s get digital!

For some time, we have been exploring a better solution than issuing agreements on paper. We have found that trial agreements were going missing, licence agreements were taking too long to get back from the licensees. Plus there was the cost of printing and mailing, not to mention the environmental impact of all the paper, plus our trips to the post office (a five mile round trip from our office).

So, having discussed it and cleared everything with our lawyer, we began researching different online contract signature solutions. Helen invested a lot of time in testing different providers to see that they offered the right combination of value, flexibility, security and ease-of-use. Finally, we settled on using Adobe EchoSign as our service provider – coming from Adobe, a trusted and well-known name internationally (you probably know them for Adobe Acrobat and Acrobat Reader, which you almost certainly have used to view or edit PDF documents).

From now on, all agreements will be issued electronically. You can sign them with just a few clicks of your computer mouse. You don’t need an account with Adobe (although, sorry to say, they do try and sell you one when you sign the agreement! Just ignore it!). The agreements you will receive are almost exactly the same as the old paper documents.

Already, we are seeing improved response times on agreements. It also makes it easier for us to be quick and efficient in issuing agreements. We think this will have benefits for all concerned.

If you have any questions about this new system, please don’t hesitate to contact us.