The Executive Yuan Passed Amendments to Certain Articles of the Plant Variety and Plant Seed Act to Allow Cross-licensing of Patent Right and Plant Variety Right.

Taiwan Executive Yuan passed amendments to certain articles of the Plant Variety and Plant Seed Act on November 4, 2010 to be in line with the amendment to Patent Act that has been submitted by the Executive Yuan to the Legislative Yuan for deliberation in December 2009.  According to the amendment, plants will become patentable subject matters for invention patents and thus the provisions governing compulsory licensing of plant varieties should be revised and formulated to protect a breeder’s legal right and interest and further to encourage the industry’s creation, research, and development.

According to the Council of Agriculture, legal protection for breeding rights are actualized either by patent laws or special laws or both in the IPR protection regimes of most countries around the world.  The first paragraph of Article 24 of the current Patent Act did not recognize patentability of animals and plants as an invention patent; plants are only eligible for variety right protection.  However, for boosting the development of Taiwan’s biotech industry, the amendments to Taiwan Patent Act proposed by the Ministry of Economic Affairs make animals and plants patentable.  Also to avoid any contradiction or inconsistency between the Patent Act that no longer excludes patentability of animals and plants and the current Plant Variety and Plant Seed Act, amendments to the Plant Variety and Plant Seed Act are necessarily proposed to cope with the upcoming patentability of animals and plants to be admitted in the amended Patent Act.

The Council of Agriculture further indicated that the main purpose of these amendments to the Plant Variety and Plant Seed Act is to formulate a breeder’s legal rights and interest in conformity with the relevant amendments of the Patent Act.  These amendments are believed to bring forth creation and research and development and more importantly to keep pace with international practices of plant variety rights and to upgrade Taiwan’s competitiveness in and agricultural trading interaction with the international market. 

The main points of the amendments to the Plant Variety and Plant Seed Act are as follows.

(1) The Chinese version of the term, compulsory licensing, 特許實施, is to be revised to be in line with the English version of the term, 強制授權.  (Article 30, 31 and 39 of the amendments)
(2) The paragraph “failure to reach a licensing agreement with the holder of a plant variety right under reasonable commercial terms within a considerable period of time” is revised as a requirement of applying for compulsory licensing to make non-profit practice for the enhancement of the public interest.  Also, the amount of remuneration shall be decided by the central competent authority when the compulsory license is granted.  (Article 30 of the amendments)
(3) The requirements for a patentee’s application for compulsory licensing of plant variety right are added.  Also, new provisions with respect to a variety right holder’s request for compulsory licensing of the applicant’s patent are also provided and added.  (Article 30-1 of the amendment)

＊Amended and added provisions of the Plant Variety and Plant Seed Act

Article 30
In order to cope with substantial national situations, or to make non-profit practice for the enhancement of the public interest, and in the case of an applicant's failure to reach a licensing agreement with the holder of a plant variety right under reasonable commercial terms within a considerable period of time, the central competent authority may grant a compulsory license to the applicant to exercise such plant variety right upon request, provided that such license shall be exercised mainly for the purposes of satisfying domestic market demand.

Compulsory licenses shall be nonexclusive practice and nontransferable licenses only. The term of a compulsory license shall be clearly specified in the license; however, in no event shall the term exceed four (4) years.

In the absence of the conditions set forth in Paragraph 1, the central competent authority still may grant a compulsory license for the exercise of a plant variety right to the person applying for a compulsory license upon receipt of an request from the person in the event that the holder of such plant variety right has engaged in restricting competition or in unfair competition as confirmed by a court decision or by a decision of the Fair Trade Commission of the Executive Yuan.

Upon receipt of a written request for a compulsory license, the central competent authority shall serve a copy of the request on the holder of the plant variety right, requesting the holder of the plant variety right to make a defense within three (3) months. If no defense is filed within the specified time limit, the central competent authority may decide the matter by its authority.

A compulsory license with respect to a plant variety right shall not preclude other persons from obtaining a right to exercise such plant variety right.

The compulsory licensee shall give the holder of the plant variety right appropriate remuneration. The amount of remuneration shall be decided by the central competent authority when the compulsory license is granted.

The compulsory license shall be transacted together with the business pertaining to the compulsory license for assignment, trust, inheritance, license, or pledge creation.

When the reason for the compulsory license ceases to exist, the central competent authority may cancel the compulsory license upon request.

Article 30-1
Where a patentee practices his/her patent by exercising another person’s plant variety right and the technology expressed by his/her patent has important technical improvement(s) with considerable economic significance over the plant variety right and in case that such a patentee fails to reach a licensing agreement with the plant variety right holder concerned under reasonable commercial terms and conditions within a considerable period of time, the patentee may apply for a compulsory license with the competent authority.

In case of the application for a compulsory licensing of a variety right, the plant variety right holder may propose reasonable terms and conditions to apply for compulsory license of the applicant’s patent right in accordance with the Patent Act.

The term of the compulsory license granted in accordance with the first paragraph will not be restricted by the regulation set forth in the second paragraph.

Article 31
When the compulsory licensee, having obtained the right to exercise a plant variety right in accordance with the requirements of Article 30, violates the purpose of the compulsory license, the central competent authority may, upon a request filed by the holder of the plant variety right or ex officio, nullify such compulsory license.

Article 39
The central competent authority shall publish any amendments to, compulsory license or license to, creation of pledges on, and expiration, nullification, or cancellation of, a plant variety right.  (2010.11)
/CCS