§ 5.29 p.m.
§ Order of the Day read for receiving the Report of Amendments.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD)
My Lords, I beg to move that this Report be now received. I should like, with your Lordships' permission, to deal together with the first group of Amendments which arise in consequence of the Amendments to which my noble friend Lord Amherst of Hackney spoke during the Committee stage, and which he withdrew upon my promise to meet his wishes so far as I could. This group includes Amendments Nos. 1, 2, 3, 4 and the first part of No. 5.
The purpose of my noble friend's Amendment was to permit breeders to make contractual arrangements for the multiplication of the basic seed or other propagating material of their new varieties before a plant breeders' rights scheme comes into operation without thereby disqualifying the particular variety for protection because some of these contracts involve a sale between the breeder and the contract grower. As I explained to the Committee, it was never our intention that the bulking-up of varieties under contract should be penalised in this way, and, with welcome support from the other side of your Lordships' House, I undertook to introduce a suitable Government amendment.
My noble friend's Amendment related solely to sales in the period before a scheme comes into force. This is dealt with in paragraph 2(1) of Part II of Schedule 2, page 41 of the Bill. The bulking-up period may however run on past this and it seems necessary also to deal with the period from the date of the scheme and up to the date of application for rights, involving an amendment to paragraph 2(2) as well.
The main effect of this group of Amendments is therefore to enable breeders to enter into contractual arrangements for the multiplication of seed or other propagating material of their new variety both before the introduction of a scheme and, once a scheme has been made, before application for 60 grant of rights, without thereby making the variety ineligible for grant. At the same time, we must ensure that the concession is not used as a loophole for the commercial sale of a variety under the guise of multiplication. That is evidently what my noble friend Lord Amherst of Hackney had in mind in providing that the material grown under contract must be for re-sale or return to the person entitled to apply for rights. As drafted, however, his Amendment did not limit the concession to the two parties properly concerned—breeder and contract grower—nor did it require that the whole of the product of the multiplication and any surplus original seed should all be returned to the breeder. These points, with which I am sure my noble friend will agree, are covered by the Government Amendments.
To turn now to the Order Paper, the two Amendments to Schedule 1 make it clear that sales in the course of bulking-up in the period between application for and grant of rights will not prevent breeders from enjoying the benefits of a protective direction under the Schedule. This is a form of temporary protection for a breeder while his application is pending, and it gives him a remedy against anyone who might pirate his variety while the Controller is examining it. To obtain this limited protection the breeder has to undertake not to exploit the variety himself until rights are granted. What these Amendments do, in effect, is to say that sales in the course of bulking up under contract will not involve a breech of this undertaking.
Apart from the drafting changes in lines 6 and 11 on page 41, the proposed new paragraph (4) to Schedule 2 is the main Amendment on contract growing for multiplication purposes, and I have already explained its purpose. The remaining Amendment introduces a new sub-paragraph (5) which replaces subparagraph (4) of the printed Bill and introduces some new matter which I will explain to your Lordships. Subparagraph (5) will enable a breeder to dispose of material of his plant variety which becomes surplus to his requirements in the course of trials or at the multiplication stage, as well as during the course of his breeding programme which is already covered by the Bill, always provided that he disposes of the 61 surplus for non-reproductive purposes. He will have to include information about this on his form of application for rights. For example, surplus cereal seed could not be sold as seed—this would invalidate an application for rights—but would have to be sent to the mill as consumption material, or sold as animal feed. Seed potatoes would need to be sold as ware or for fodder. These will be relatively small quantities of material and no difficulty is foreseen in breeders making suitable arrangements. My noble friend Lord Amherst of Hackney is unfortunately unable to be present this afternoon, as he informed me, but I have reason to believe that he is satisfied with the Amendment as drafted. I beg to move.
§ Moved, That the Report be now received.—(Lord St. Oswald.)
§ On Question, Motion agreed to: Report of Amendments received accordingly.
§ Schedule 1 [Protection of Applicant for Rights while Application is Pending]:
Page 38, line 11, after ("that") insert ("subject to the exceptions in the next following sub-paragraph,").—(Lord St. Oswald.)
§ On Question, Amendment agreed to.
§ Amendment moved—
Page 38, line 18, at end insert—
("(3) An undertaking under this paragraph shall not prevent the applicant from making any offer for sale or sale which in the period before the application would be permitted by sub-paragraphs (3), (4) or (5) of paragraph 2 of Part II of Schedule 2 to this Act, or the exposure for sale of material where an offer for sale of that material would be so permitted.").—(Lord St. Oswald.)
§ On Question, Amendment agreed to.
§ Schedule 2 [Priorities between applicants for rights]:
Page 41, line 6, leave out ("paragraph") and insert ("Schedule").—(Lord St. Oswald.)
§ On Question, Amendment agreed to.62
LORD ST. OSWALD moved, in paragraph 2, to leave out sub-paragraph (4) and to insert instead:
("(4) Where an applicant makes, or proposes to make, arrangements under which some other person uses reproductive material of the plant variety under the control of the applicant for the purpose of increasing the applicant's stock, or of carrying out tests or trials, and under which the whole of the material produced, directly or indirectly, from that reproductive material, and any unused reproductive material, becomes or remains the property of the applicant, the said sub-paragraphs (1) and (2) shall not apply—
(5) The said sub-paragraphs (1) and (2) shall not apply to an offer for sale or sale of material, not being reproductive material, which, having been produced in the course of—
§ Transitory provisions for period ending 11th May 1965
§ 3.—(1) Where an application in the form prescribed for the purposes of this Schedule by regulations under section 9 of this Act is made at a time not later than 11th May 1965, and the applicant does not ask for a protective direction, sub-paragraphs (1) and (2) of the last foregoing paragraph shall not apply to any offer for sale or sale in the period beginning with 12th November 1963 and ending with that time if the Controller is satisfied that the applicant took all steps reasonably open to him to ensure that any person to whom material of the plant variety has been offered or sold during the said period has been informed in writing that an application for a grant of plant breeders' rights may be made in respect of the variety.
§ (2) Where an application is allowed by virtue of this paragraph, section 7(2) of this Act shall not apply to any compulsory licence granted as respects the plant variety to which the application relates.")
§ The noble Lord said: My Lords, if I may I will now turn to the second part of Amendment 5 headed "Transitory provisions for period ending 11th May, 1965". This is designed to meet another point raised by my noble friend Lord Amherst of Hackney during the Committee stage of the Bill. He noted that there might well be a hiatus between the publication of the Bill on November 12 last 63 and the introduction of schemes for the various species of plants during which breeders might see a commercial advantage in holding back their new varieties from the market, since by releasing them they would be certain to lose all opportunity of obtaining protection under the Bill as it stood. In Committee I expressed sympathy with my noble friend's desire to overcome this difficulty, in the interests both of the breeders and of the farmers who need these improved new varieties, and the new paragraph 3 is designed to meet the point he had in mind by amending the rules about prior sales.
§ These rules are in Part II of Schedule 2. As the Bill stands, any sale or offer for sale of plant material of a variety made before a scheme for the species concerned comes into operation would rule out that variety from a subsequent grant of rights. So also would sales made in the United Kingdom, with the breeder's consent, between the date of operation of the scheme and the date the breeder makes his application for rights. What the Amendment does is to enable the breeder, without forfeiting his claim to rights, to sell material of his variety—seed and so forth—during a limited period before the the scheme for the species comes into force and before he makes his application for rights.
§ The concession granted by this Amendment is purely temporary, and it will be available only for varieties for which the breeders submit their applications for rights by May 11, 1965, which is eighteen months after the publication of the Bill on November 12 last. As noble Lords will appreciate, no application for rights can be made until a scheme for the species concerned is in operation, so that the concession is, in practice, limited to sales of varieties covered by any schemes which Ministers bring into operation before the end of the eighteen months' period.
§ I acknowledge at once that the transitional period of eighteen months which we have chosen to include in the Amendment is arbitrary, as any period of this kind must be. I hope, however, that your Lordships will agree that eighteen months from the publication of the Bill is about right and will meet the reasonable needs of breeders who, although now 64 ready, or almost ready, to put their new varieties on the market, are uncertain whether to do so. As regards the number of schemes which might be made before the end of the concession period, naturally at this stage no promises can be made, but it seems reasonable to hope that it will prove possible to make and bring into operation a number of schemes, possibly more than the minimum of five which we must have before the Government can ratify the International Convention. The first schemes might include wheat, barley, oats, potatoes and roses provided no unforeseen difficulties arise. My Lords, there is much spadework to be done before any scheme can be made, and I would particularly ask the plant breeders not to treat the hopes I have expressed for the future as a firm forecast. We shall be doing our best.
§ I have explained the main purport of the new paragraph 3, but I should also point out that the Amendment includes certain safeguards for the users of new varieties affected by the prior marketing concession. In the first place, the breeder who takes advantage of the concession must warn purchasers that he may later be making an application for the grant of rights in his variety. Such a warning will put the buyer on notice that at a later stage, when he may wish to reproduce the variety for further resale, he may be called upon to seek a licence from the breeder and to pay him a royalty.
§ A further safeguard is in sub-paragraph (2) of the new paragraph 3, and concerns Clause 7(2) of the Bill. This says that, if a scheme so provides, compulsory licences issued by the Controller should not operate for some fixed period from the date of grant of rights in any variety covered by the scheme. It would seem quite wrong, however, that a breeder who takes advantage of the prior marketing concession should be put in a position where he could during this period refuse licences to would-be growers and sellers without the risk of his refusal being overruled by the Controller. Sub-paragraph (2) of the Amendment deals with this by an appropriate extension of the Controller's compulsory licensing powers. The third safeguard which the Government have thought it necessary to incorporate 65 in the Amendment is to ensure that a breeder who markets in the concession period should not later on, when he makes his application for rights, be able to cease marketing and put a stop to sales by his earlier customers by getting the Controller to issue a protective direction under Schedule 1.
§ My Lords, this is a very complicated subject, and I am afraid I have taken up a lot of your Lordships' time, but I should like to conclude my remarks on the new paragraph 3 by claiming that the prior marketing concession, originally suggested in a different form by my noble friend Lord Amherst of Hackney and incorporated with certain safeguards in the new paragraphs, strikes a reasonable balance between the legitimate hopes of the plant breeders and the need of the agricultural industry for improved new varieties. I beg to move.
Page 41, line 29, leave out sub-paragraph (4) and insert the said new sub-paragraph and paragraph.—(Lord St. Oswald.)
§ On Question, Amendment agreed to.