Plant Varieties
Takeaway: Plant variety rights are like copyright for living organisms. They can be expensive to create but can generate outsized returns if well-protected.
Once upon a time, in a small farming town in the middle of Whoknowswhereistan, there was a passionate plant breeder named Emily. Emily dedicated her life to improving plant varieties that could survive a forecasted plague.
While wandering through a crop field recently killed by the new disease, Emily discovered a survivor that seemed to have a remarkable genetic trait that made the plant highly resistant. Recognising the immense potential, she began a process of crossbreeding this type with an existing variety that was known to have a larger yield of fruit.
After a few years of careful selection, Emily successfully bred a new plant variety that had great taste and could also grow in more diverse soil mixtures. Her breakthrough soon gained the attention of keen farmers who wanted to protect their crops from the disease and, of course, make more money.
Emily, realising the value of her creation, decided to protect her new genetic creation by applying for plant variety rights. Once granted, she became the sole owner of this unique variety, allowing her to deploy legal force to control its production, distribution and commercialisation.
As word spread about Emily's remarkable plant variety, demand soared. Farmers from across the world sought her seeds, even though they were priced at a premium. Emily then established licensing agreements with a handful of important seed companies, allowing them to produce and sell the seeds under strict quality control measures. As a result, Emily's variety gained a reputation for exceptional performance and became a significant source of revenue for her.
The licensing agreements and royalties generated from seed sales also allowed her to invest in further research and development, expanding her breeding programme and introducing a whole range of plant varieties to address other agricultural challenges.
What is a plant variety patent?
Think of plant variety rights as copyrights for plants.
These protections safeguard the unique characteristics and qualities of specific plant varieties, granting exclusive rights to the breeder or company. These rights ensure that all the hard work, time and investment put into developing new plant varieties are protected and rewarded.
Very simply, patents are intellectual property rights granted by public authorities for human inventions. Patents are a type of market intervention and were initially intended back in the early Industrial Era to trigger more investment in R&D.
Patents on life differ from patents on machines or chemicals, however, as the monopolies can and do extend to the offspring of the plant varieties. Over time, patents for plants have become powerful legal tools used by companies like Monsanto to dominate seed markets by restricting their competitors’ access.
Patenting life forms has been highly contested pretty much from the first case in the US in 1980 when a patent was granted for an oil-eating bacterium.
Critics argue that life forms cannot and should not be regarded as human inventions that can be owned or controlled. Conversely, proponents point out that any DNA strand which can be sufficiently manipulated by humans is no longer "natural" and falls into the box called "things that can be patented."
Plant variety rights patents are generally divided into two categories:
Process patents relating to an inventive process such as the modification techniques for new GMOs. Anyone who wants to use the patented process must have the consent of the titleholder, paying license fees and usually also royalties; and
Product patents relating to an invented product, such as how Emily altered the DNA sequences of her plant variety to create stronger disease resistance.
Traditionally, intellectual property rights are granted by governments through "plant variety protection" or "plant breeders’ rights" based on national laws. Plant variety protection (PVP) rules, like patents, largely prevent farmers from saving any of their own seeds without paying royalties to seed companies.
While regulations regarding GMOs vary from country to country, there are only 13 crops with GM varieties commercially available around the world. These include:
Alfalfa
Apple
Canola
Corn (Maize)
Cotton
Eggplant
Papaya
Pineapple
Potato
Soybeans
Squash
Sugar Beets
Sugarcane
The Monsanto example
Emily doesn’t exist, but her success story demonstrates how a newly-created plant variety, with its unique genetic traits and intellectual property rights, can become a valuable intangible asset for the owner.
But while Emily is a fictional character, there are plenty of companies that play around with the building blocks of life (DNA) to create new forms of plants and animals all the time. Some, like Monsanto (now owned by Bayer) make billions of dollars from this process every year.
Monsanto has been at the forefront of genetically modified organisms (GMOs) and is perhaps best known for its weed killer product, Roundup, along with its production of GMO crops.
After the merger in 2018, Bayer/Monsanto now own about 77% of all seed corn, 69% of all seed traits and 58-97% of the markets in cotton, soybeans and canola. Monsanto is also the assignee of over 4000 granted and unexpired US patents while Bayer is listed as the assignee of over 6000 granted and unexpired US patents.
The company may even employ someone called “Emily” as well, but that’s unconfirmed.
One of these GMOs, a herbicide-resistant corn, was developed by Monsanto researchers through the identification of a specific gene that resisted glyphosate, the active ingredient in Monsanto's herbicide, Roundup. This modification means farmers can use harsher measures to control weeds without fearing too much damage to the corn.
To protect this new corn variety, Monsanto sought patent protection in the same way that Emily did. It filed patent applications with the appropriate intellectual property offices (mostly in the US), providing detailed descriptions of the modified corn's genetic makeup, traits and how it was created. The patent applications included claims defining the scope of the protection sought.
How plant variety rights become intangible assets
The three primary categories of genome-editing tools are zinc-finger nucleases (ZFNs), transcription activator-like effector nucleases (TALENs) and the CRISPR/Cas system (Clustered Regularly Interspaced Short Palindromic Repeats).
Over the past 10 years, improved versions of these “genetic scissors” have been introduced by many researchers. In a 2022 report, the World Intellectual Property Office (WIPO) Patentscope, which covers 103 patent jurisdictions, identified 20,081 patents that reference the “Crispr-Cas9 plant.”
A report by AgbioInvestor found that the cost of discovery, development and authorisation of a new plant genetic trait has declined from $US136 million in the 2008–2012 period to about $US115 million today, while the time required to complete the process increased from 13.1 years to 16.5 years. At the crop level, time to market varied from 11.6 years to 24.0 years.
So yes, GMOs are very expensive to create.
Regulatory hurdles are another factor in the development of new plant and genetic varieties. Companies must navigate complex and ever-changing regulatory frameworks, particularly in the areas of genetic engineering and biotechnology. These regulations can vary by country or region and failure to comply with them can result in significant legal and financial consequences.
In short, agricultural companies would find immense value in protecting their plant variety rights and turning them into game-changing intangible assets.
By obtaining plant variety rights, a company can prevent others from selling or reproducing its unique variety without permission. By developing varieties that offer desirable characteristics, companies can differentiate themselves from their competitors and attract customers who value these traits.
This can lead to increased sales and greater profitability in markets with a high demand for specific traits such as disease resistance or drought tolerance (thanks Emily!).
Genetic innovations, protected by patents and other intellectual property rights, can be enormously valuable assets for a company. They open doors to collaborations, licensing agreements and the potential to sell seeds or technology to farmers around the world.