HL Deb 23 October 1997 vol 582 cc825-43

3.58 p.m.

Lord Carter

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Carter.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Serota) in the Chair.]

Clauses 1 and 2 agreed to.

Schedule 1 [The Plant Variety Rights Office]:

Lord Carter moved Amendment No. 1: Page 20, line 10, after ("may") insert ("with the consent of the Minister for the Civil Service").

The noble Lord said: In moving Amendment No. 1 to this Bill my first and most pleasant task is to welcome the noble Baroness, Lady Anelay, who I believe has chosen to make her debut at the Dispatch Box at the Committee stage of this highly technical Bill. I think it is a cross between a baptism of fire and a devotion well beyond the call of duty.

This Bill provides for the pay and allowances of staff of the Plant Variety Rights Office to be determined by the agriculture Ministers, acting jointly. The amendment provides for this to be subject to the consent of the Minister for the Civil Service.

In practice, PVRO is staffed by civil servants employed by the Ministry of Agriculture, Fisheries and Food. Their pay and allowances are determined in exactly the same way as all other staff of the Ministry and will continue to be so. I beg to move.

On Question, amendment agreed to.

Schedule 1 agreed to.

Clauses 3 and 4 agreed to.

Schedule 2 agreed to.

Clause 5 agreed to.

Clause 6 [Protected variety]:

Baroness Anelay of St. Johns moved Amendment No. 2: Page 3, line 23, leave out from ("may") to end of line 24 and insert ("impose reasonable conditions when giving authority for the purposes of subsection (1) above.").

The noble Baroness said: I begin by thanking the noble Lord, Lord Carter, for his welcome to me in my new position. Whether it will be a baptism of fire will be apparent by the end of today.

Under Clause 6(1) a holder of plant breeder's rights is entitled to prevent anyone doing any of the acts listed in the subsection as respects the propagating material of the protected variety without his authority. Subsection (2) makes it clear that any authority granted by the holder for one of those acts may be given with or without conditions or limitations. The purpose of this amendment is to ensure that where the holder decides to give authority for such an act then any conditions which he, or indeed she, attaches thereto, should be reasonable. In other words, we are trying to avoid a technical grant of authority with conditions which are so unreasonable that the authority is thereby rendered useless to the person seeking the holder's permission. We are trying to achieve a fair balance between the parties.

Some might of course argue, and the Minister may do so, that such a change would be a recipe for litigation in the courts on what was reasonable. But I am assured that it is believed that in practice such a provision would act as guidance to holders to behave responsibly and that court proceedings should be an unlikely outcome.

I also notice that the Government are not themselves against using the definition "reasonable" in the context of this Bill as a matter of principle since that is the term used in their own Amendment No. 11 to Clause 13. I hope, therefore, that the Minister will be able to accept this amendment today. I beg to move.

Lord Carter

The very first amendment I moved in this House was in 1987 on an agricultural Bill, and it was accepted on behalf of the Government by the noble Baroness, Lady Trumpington. Unfortunately, I shall not be able to offer the same courtesy to the noble Baroness.

As she said, Clause 6(2) provides for plant breeders to give authority to others to use protected varieties, with or without conditions or limitations. It is this provision which establishes the basis for the licensing system whereby plant breeders control the use of their intellectual property and obtain a return on their investment, through royalties.

The proposed amendment would restrict the breeder's right in the commercial interests of individual farmers and seedsmen. In other words, it would limit the breeder's ability to conduct his business as he sees fit. It would also lead to the courts acting as arbitrators in determining whether a breeder was imposing reasonable conditions in a licence issued to a particular individual.

If the amendment is made, the licensing provisions would lead to situations such as the following. A breeder would issue a licence, which would be accepted by an individual grower or seedsman, who would then decide that one or more of the licence conditions were not "reasonable". The grower or seedsman would then decide not to comply with the conditions he believed were unreasonable. Court proceedings would ensue and it would be up to the courts to decide who was right in what was essentially a business dispute.

I do not believe that this Bill should attempt to set the terms on which a plant breeder must do business with individual customers, and I therefore oppose the amendment. That is not to say that the breeder should be able to do just as he likes. If he acts against the public interest, Clause 15 provides for a compulsory licence to be issued. But the public interest is not the same as the interests of an individual farmer or seedsman.

The UPOV Convention is also clear that the breeder should be able to conduct his business as he wishes. The Convention is quite specific. It states: no Contracting Party may restrict the free exercise of a breeder's right for reasons other than of public interest. Clauses 6(2) and 15, as drafted, reflect that position, as does the Community regime of plant breeders' rights.

I hope that that explanation will enable the noble Baroness to withdraw her amendment.

Baroness Anelay of St. Johns

I thank the Minister for his explanation. I would like time to consider the points he made. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 3: Page 3, line 37, leave out from ("unless") to end of line 39 and insert ("subsection (4A) below applies. (4A) This subsection applies if, before the product was made, any act mentioned in subsection (1) above was done as respects the harvested material from which the product was made and either—

  1. (a) the act was done with the authority of the holder of the plant breeders' rights, or
  2. (b) the holder of those rights had a reasonable opportunity to exercise them in relation to the doing of the act.").

The noble Lord said: Clause 6(4) provides for the breeder's right to extend to directly made products prescribed by Ministers, where the breeder's right has been infringed at an earlier stage in the production cycle, in circumstances where the breeder has not been able to take action against the earlier infringement. The current drafting, mistakenly, provides that Clause 6(4) can only come into play if the product is obtained from harvested material by committing an act which requires the breeder's authority. These acts are listed in Clause 6(1).

It is, however, quite possible for a product to be made from harvested material to which the breeder's rights extends without committing any of the acts in Clause 6(1). In these circumstances, Clause 6(4) should provide that where rights are infringed in respect of the harvested material and the breeder has not been able to act against that infringement he can use Clause 6(4) to act against the directly made product whether or not one of the acts in Clause 6(1) is committed to produce the product.

My brief adds, "I hope you have found this explanation enlightening." The nub of the matter is that the amendment corrects the drafting of Clause 6(4) and brings the Bill into line with the UPOV Convention and the Community regime. I should also remind the Committee that extension of the breeder's right to directly made products only comes into play if Ministers make regulations prescribing those products. The Committee will be glad to hear that we have no plans to prescribe any products at present. I beg to move.

Baroness Anelay of St. Johns

My note to myself says that this amendment makes the clause more comprehensible. I am not too sure what time of night I wrote my note.

I observe that the Government have retained the overall objective within this clause. It is one that we can support, and therefore we support the amendment.

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 agreed to.

Clause 8 [General exceptions]:

Lord Carter moved Amendment No. 4: Page 4, line 38, leave out (", or other") and insert ("and").

The noble Lord said: The 1991 UPOV Convention exempts from the breeder's right acts done for private and non-commercial purposes. This is to ensure, for example, that amateur gardeners may continue to take cuttings of protected varieties for their own private use.

The Bill as drafted refers to private or other non-commercial use. It could be interpreted as permitting the multiplication of large quantities of protected varieties for public use, rather than private use, provided it is done for non-commercial purposes, for use, perhaps, in public parks or something similar. That is not what UPOV intended. The amendment therefore brings Clause 8 into line with the UPOV Convention and the corresponding provision in the Community plant variety rights regime by making clear that an act must be both private and non-commercial to fall within the exemption. I beg to move.

On Question, amendment agreed to.

Clause 8, as amended, agreed to.

Clause 9 [Farm saved seed]:

Lord Carter moved Amendment No. 5: Page 5, line 20, after ("date") insert ("after 30th June 2001").

The noble Lord said: The Committee will know that farmers who have saved seed of a protected variety before the Bill comes into force are exempt from paying farm saved seed "royalty" on that variety until such time as Ministers discontinue the exemption by order (see Clause 9(5) and (6)). The Community plant variety regime includes a similar "prior use" exemption, which continues until at least 30th June 2001 and may be extended beyond that date.

Ministers have made clear that they do not intend to end the UK "prior use" exemption until the Community exemption ends. The farming unions were nevertheless concerned that the Bill as drafted does not identify 30th June 2001 as the earliest date for discontinuing the "prior use" exemption.

At Second Reading I undertook to address those concerns. The amendment gives effect to that undertaking by providing that Ministers may only make an order discontinuing the "prior use" exemption on a date after 30th June 2001. I beg to move.

Baroness Anelay of St. Johns

The amendment addresses the concerns raised in the debate in another place by my right honourable friend Mr. David Curry (Hansard, col. 697) and my honourable friend Mr. James Paice (col. 732).

At Second Reading, as he reminded us, the Minister reassured the Chamber that the reason for the absence of any reference in the Bill to the 30th June 2001 date was to ensure that the prior use exemption would not expire on 30th June 2001, if the corresponding date in the Community regime is extended. He recognised the concerns that had been raised on this point. Further concerns have been represented to us on the Opposition Benches about this matter. The Minister told us that the Government would bring forward an amendment at Committee stage to rectify the matter. I am grateful that he has taken that action after the discussions this summer.

I support the amendment. I believe that it will reassure farmers who save seed that they may continue to use varieties that they currently save, free of charge, until that date.

On Question, amendment agreed to.

Baroness Anelay of St. Johns moved Amendment No. 6: Page 5, line 36, after ("obtained") insert—

The noble Baroness said: Clause 9 implements European Union law by obliging farmers (subsection (3)) to pay equitable remuneration to holders of plant breeders' rights for farm saved seed, set at a "sensibly lower" rate than the amount charged for production of propagating material of the same variety in the same areas with the holder's authority. I understand that after very lengthy and, I am told, tough negotiations an agreement was reached between farmers and plant breeders for a scale of payments for farm saved seed and that this came into operation in autumn 1996. It is hoped that that agreement will indeed prove durable and can be adjusted by further agreement between the parties as required in the future. But, if the agreement were to break down, farmers could be left in a vulnerable position to pay whatever the breeders demanded. We believe that it is in the public interest that there is a safeguard against such an eventuality.

At Second Reading my noble friend Lord Lucas, who has done so much work on the Bill on our behalf, told the Chamber that: We should like some long-term protection to ensure that negotiations continue to be conducted on a reasonable basis".—[Official Report, 18/7/97; col. 1136]. The amendment tries to achieve just that.

The amendment gives Ministers a long stop reserve power to intervene to impose a formula for payment if the parties were patently unable to agree. It is unlikely that the power would ever be required to be exercised, but we believe that its very existence would help to ensure that this was so.

Indeed, if by any chance the Minister is not inclined to accept this amendment today—the second refusal to me on the same day on my first time here—and believes that the amendment is not necessary, perhaps he can explain what powers Ministers already possess to take action to impose a formula for payment if the parties were unable to agree at some stage in the future. I beg to move.

Lord Carter

I think that the noble Baroness will find over time that charm does not work in this Chamber, I am afraid. The fact that I have turned down one amendment already does not mean to say that I shall not turn down this amendment.

The amendment is intended to give Ministers powers to determine how the rate for use of farm saved seed should be calculated. It would apply only to UK protected varieties. It would not—indeed could not—give similar powers in respect of Community protected varieties, since this is a matter for quite separate Community legislation. That is a weakness in the amendment.

My view is that this is a commercial matter between breeders and farmers. It is not one in which the Government should intervene. After long debate, the EC took this view when the Community regime was established. To give Ministers powers to determine how the rate should be calculated for UK protected varieties when they cannot unilaterally do the same for Community protected varieties strikes me as opening up the prospect of considerable confusion.

I know that the farming unions are keen to see this measure in the Bill. They regard the powers as "reserve" ones, as the noble Baroness said, which would be used only when farmers and plant breeders could not sort out their differences and reach agreement between themselves. I do not see them in quite the same way. My feeling is that if they are there, so is the incentive for one side or the other to dig in its heels and leave Ministers to sort out their differences for them.

I believe that the party opposite still believes in the free market and I suggest to the noble Baroness that we should leave commercial people to do what they are best at doing; namely, dealing with commercial matters.

These matters were successfully resolved through industry negotiations for EC protected varieties. The farming unions and plant breeders have also reached agreement on the way UK protected varieties should be dealt with once this Bill comes into force, as I shall mention in more detail when we come to the clause stand part debate. It seems to me that that is the right way to deal with the matter.

In reply to the noble Baroness's question about the powers which Ministers have, my answer is that they have no powers in that respect. With that explanation, I hope that the noble Baroness will feel inclined to withdraw the amendment.

Baroness Anelay of St, Johns

I thank the noble Lord for his reply. I shall still keep on trying. I shall not give up at this early stage. Certainly, it does my heart good to hear him express his free market theories. I hope that may continue—I do not say "for long" but at least for the odd year or so. In the light of his reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.15 p.m.

Lord Carter moved Amendment No. 7: Page 5, line 39, at end insert— ("() Regulations under subsection (7)(a) above may include provision imposing obligations of confidence in relation to information supplied by virtue of the regulations.").

The noble Lord said: Clause 9(7) enables Ministers to make regulations requiring plant breeders, seed processors and farmers to provide information to each other for the purposes of the farm saved seed provisions in the Bill.

This amendment will enable Ministers to impose an obligation on the recipients of information to keep it confidential. If, for example, a farmer discloses that he has planted so many hectares of farm saved seed, the plant breeder who receives this information will be required to treat it as confidential.

Let me take as another example the tonnage of a species which a processor has cleaned for a client. We feel that in practical terms such sensitive information must be kept confidential. This information is provided at a plant breeder's by farmers or seed processors. I am sure that this will be welcomed. I beg to move.

Baroness Anelay of St. Johns

I am grateful for the Minister's explanation of the amendment and in particular that he gave an example of why matters should be kept confidential. It is something which any open government would not normally wish to enforce. But, in the circumstances and in view of the explanation, we support the amendment.

On Question, amendment agreed to.

On Question, Whether Clause 9, as amended, shall stand part of the Bill?

Baroness Anelay of St. Johns

I gave notice of my intention to oppose the Question that the clause stand part of the Bill in order to raise points put forward at Second Reading by my noble friend Lady Trumpington and by several growers and members of the public who subsequently wrote to us again. They are points which do not appear as yet to have been resolved by the amendments tabled today by the Minister.

My noble friend Lady Trumpington pointed out that the principle that holders of plant variety rights are entitled to royalties was agreed as a result of the UPOV convention of 1991 and by the European Union in Directive 8167/94 on 1st September 1994.

The directive also allows exemptions from royalties for small farmers and limits the rights to newer varieties only. Difficult trade negotiations decided rates of royalties and collection methods. But the royalty-free status of older varieties was an important element in those negotiations.

Clause 9(3) of the Bill seeks to extend the royalty scheme to all protected varieties, including the older ones which do not enjoy such protection under the European scheme. We have been advised by such organisations as the National Association of Agricultural Contractors that provision will destroy a cornerstone of the trade agreement.

Can the Minister tell us today whether any progress has been made to resolve that problem? Will older varieties be permanently exempted from royalties and, if so, how? I understand that the Minister gave assurances at Second Reading to carry forward discussions on this matter. Have they had a successful resolution?

Lord Carter

As the noble Baroness is aware, this is an important clause. To summarise the essentials of it, the 1991 convention extends the breeder's right to all production and reproduction of propagating material, including farm-saved seed. It also allows for that extension to be limited, subject to safeguarding the legitimate interests of the breeder, to permit the use of farm-saved seed, and that ensures the purpose of Clause 9.

An order under Clause 9(2) will exempt farm-saved seed of the main agricultural species—cereals and fodder plants, oil and fibre plants and potatoes—from the breeder's right. Farmers may therefore save seed for use on their own holdings of protected varieties of those species without seeking authority from the holder of rights. In return, however, the breeder may require a payment which is "sensibly lower" than the royalty payable on certified seed. Small farmers may save seed of protected varieties for use on their own holdings without payment. Amendment No. 5 should reassure everyone that the prior use exemption will not be discontinued until after 30th June 2001.

Clause 9 applies exactly the same approach to varieties protected in the UK as to those protected under council regulations. For example, the definition of "small farmer" and "suitably lower" are prescribed by reference to definitions in the council regulations. That should avoid confusion between the national and the EC system.

The levels of payment for farm-saved seed are a commercial matter between plant breeders and their customers. Constructive discussions between representatives of the farmers, seed processors and plant breeders led to a negotiated agreement on farm-saved seed payments for Community-protected varieties.

As the noble Baroness knows, when I met interested parties in July, I urged the different sectors of the industry to get together to discuss the treatment of UK-protected varieties, particularly older varieties. I am sure the Committee will be delighted to know that yet again plant breeders, processors and farmers' representatives reached agreement. I was pleased to play a part in ensuring that they reached that agreement and a formal document signed by all the farming unions and the British Society of Plant Breeders records all the details and is available in the Printed Paper Office.

A key element in the agreement is that plant breeders agreed to a zero rate for the farm-saved seed payment on UK-protected varieties granted rights before September 1994. Farmers will therefore be able to use them free of charge after the prior use exemption is removed. I am sure that the Committee will agree that that is a most satisfactory outcome.

The Committee may also be interested to know that there are no fewer than 75 varieties. There are 14 varieties of spring barley, four of spring wheat, six of spring oats, 10 of field peas, 12 of winter barley, 15 of winter wheat, eight of winter oats and six of field beans which are caught by the agreement. In addition, I am sure that the Committee, particularly Members with a farming interest, will be even more delighted to know that the British Society of Plant Breeders confirmed that the saving on the royalties on the old varieties is worth £200,000 per year to those farmers who are caught by the provision. I am sure that we can all agree that it has been a satisfactory agreement on all sides.

I turn to the other point made by the noble Baroness. More generally, I received a number of representations, as I know others have, from members of Friends of the Earth who are concerned that Clause 9 will make the use of farm-saved seed uneconomic and also lead to a loss of biodiversity. I shall ensure that a proper response is sent to all those who wrote to me. However, I cannot agree that Clause 9 will make farm-saved seed uneconomic.

Clause 9 is there to ensure that those farmers who want to save seed of UK protected varieties produced on their own holdings may continue to do so. I use the word "may" advisedly. I have already explained that some farmers are exempted by the Bill from the requirement to pay and the agreement between the British Society of Plant Breeders and the farming unions ensures that farmers will not pay to use the older UK-protected varieties.

In those cases where a payment has to be made, it must be sensibly lower than the royalty on certified seed. The British Society of Plant Breeders and the farming unions reached agreement on the payments which apply to EC-protected varieties which are sown this autumn. I am told, for example, that the charge for wheat is £23.37 per tonne of seed used. That does not suggest that the use of farm-saved seed will become uneconomic or that the clause will lead to a loss of biodiversity.

In relation to the fear of a loss of biodiversity, perhaps I may refer to a point I made at Second Reading which was confirmed later by officials. It seemed to me as a layman rather than as a plant breeder—as a farmer—that over the years the number of varieties available has increased enormously. I am not sure where the argument for the loss of biodiversity comes from. When I started farming in the early 1950s and for a long time afterwards we had one variety of winter wheat (which was Cappelle Desprez) one variety of spring barley (which was Proctor), one variety of spring oats (which was S172) and one variety of oilseed rape (Primor). Perhaps I should stop showing off. There are now a large number of varieties; I listed 75. There are 75 older varieties which are exempt and hundreds of varieties on the recommended list. Therefore I am not sure where the argument for the loss of biodiversity comes from.

Baroness Trumpington

As the Committee heard, at the Second Reading of this Bill on 18th July I raised the question with the noble Lord, Lord Prys-Davies, of older varieties, particularly in regard to their exemption. At that time the noble Lord, Lord Carter, undertook to discuss this matter with me and with others. He recognised that there was a problem. He did indeed hold a meeting. He put forward today a solution which is very agreeable to those interested parties with whom I have been in contact. On their behalf I should like to express my appreciation. Charm does work sometimes! As it is my birthday, I give the noble Lord full permission to call me "Grandmummy" in the future if he so wishes.

Earl Howe

Perhaps I may briefly express my welcome for the announcements made by the noble Lord, Lord Carter, this afternoon. The whole issue of farm-saved seed has been the subject of painstaking and patient negotiation between breeders and farmers over an extended period, as I well remember from my time at the Ministry of Agriculture. The balance eventually struck was one which it would have been unwise to upset, particularly that part of the agreement relating to older varieties which do not enjoy protection under the European scheme.

I am pleased that the Government felt able to recognise the arguments put forward at Second Reading by my noble friend Lady Trumpington and others. We should now have a secure basis for the trade agreement to operate in the future.

Clause 9, as amended, agreed to.

Clause 10 [Exhaustion of rights]:

4.30 p.m.

Lord Carter moved Amendment No. 8: Page 6. line 10. at end insert(", or

  1. (b) is derived from material which has been so sold or otherwise marketed.")

The noble Lord said: In moving Amendment No. 8 I will speak also to Amendment No. 9, which is grouped with it.

These amendments correct the drafting of Clause 10 which is concerned with the exhaustion of the breeder's rights. They do not change the policy in any way but simply ensure that the clause as drafted is effective.

It has always been the intention that the breeder should be able to exercise his rights only once in a cycle of propagation. If a farmer buys wheat seed to produce milling wheat, then the breeder's right obviously should be exhausted at the point of sale of the seed. The right of propagation to produce the commercial crop will be authorised in the sale and the breeder will have no rights over the subsequent crop of the milling wheat.

The breeder's right will not be exhausted, nor will he have authorised any propagation after this initial propagation. In other words, the breeder's right is not exhausted where there is further seed production. If, for example, some first generation wheat seed is sold and used to produce certified second generation wheat seed, then the breeder's right applies to the second generation of seed. Clause 10, as amended, will reflect that position.

There is a complicated drafting point about which I know the noble Baroness was concerned. The amendment introduces subsection (1)(b) and one quickly asks "Where is (a)?" I have a long note of explanation from the Public Bill Office. It relates to the printing of the Bill and I am assured that it is correct. If the amendment is accepted—which I am sure it will be—Clause 10(1) will read: (1): Plant breeders' rights shall not extend to any act concerning material of a variety if the material—

  1. (a) has been sold or otherwise marketed in the United Kingdom by, or with the consent of, the holder of the right, or
  2. (b) is derived from material which has been so sold or otherwise marketed."

I beg to move.

Baroness Anelay of St. Johns

I am not rising to frighten the Minister into thinking I am opposing this amendment but merely to thank him for circulating the technical note. I am still learning after being here for under a year, but this really did fox me as to why there was a (b) and no (a). I am grateful to the noble Lord for his assistance and explanation. We support the amendment.

On Question, amendment agreed to.

Lord Carter moved Amendment No. 9: Page 6, line 12, leave out from ("variety,") to ("or") in line 14.

The noble Lord said: This amendment has been spoken to with Amendment No. 8. I beg to move.

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Duration]:

Lord Carter moved Amendment No. 10: Page 6. line 35, after ("period") insert (", not exceeding—

  1. (a) in the case of paragraph (a), 35 years, and
  2. (b) in the case of paragraph (b), 30 years,").

The noble Lord said: Amendment No. 10 meets the commitment I gave at Second Reading to restrict the period for which Ministers may extend rights for particular species or groups to five years in total.

Rights for trees, vines and potatoes may therefore be extended to a maximum of 35 years and rights for other species or groups may be extended to 30 years in total. I beg to move.

Baroness Anelay of St. Johns

This amendment addresses the points raised on Second Reading by my noble friend Lord Lucas (col. 1136 of the Official Report.) He pointed out that Clause 11(2) allows for the extension of plant breeders' rights beyond 25 or 30 years, apparently without limit. This would give the Government the power to decide upon any extension period without limit or a requirement to consult before taking such action.

My noble friend stated then that we would like to see the requirement for prior consultation to take place if such a wide-ranging power were to remain in the Act. The alternative he proposed was that the power should be limited to five years contained in the EC directive. In those circumstances, he made it clear that we would not require prior consultation.

I welcome and support the amendment because it meets fully the objections raised by my noble friend Lord Lucas.

On Question, amendment agreed to.

Clause 11, as amended, agreed to.

Clauses 12 and 13 agreed to.

Lord Carter moved Amendment No. 11: After Clause 13, insert the following new clause—

PRESUMPTIONS IN PROCEEDINGS RELATING TO HARVESTED MATERIAL

(" .—(1) This section applies to any proceedings for the infringement of plant breeders' rights as respects harvested material.

(2) If, in any proceedings to which this section applies, the holder of the plant breeders' rights proves, in relation to am of the material to which the proceedings relate—

  1. (a) that it has been the subject of an information notice given to the defendant by or on behalf of the holder, and
  2. (b) that the defendant has not, within the prescribed time after the service of the notice, supplied the holder with the information about it requested in the notice,
then, as regards the material in relation to which the holder proves that to be the case, the presumptions mentioned in subsection (3) below shall apply, unless the contrary is proved or the defendant shows that he had a reasonable excuse for not supplying the information.

(3) The presumptions are—

  1. (a) that the material was obtained through unauthorised use of propagating material, and
  2. (b) that the holder did not have a reasonable opportunity before the material was obtained to exercise his rights in relation to the unauthorised use of the propagating material.

(4) The reference in subsection (2) above to an information notice is to a notice which—

  1. (a) is in the prescribed form,
  2. (b) specifies the material to which it relates,
  3. (c) contains, in relation to that material, a request for the supply of the prescribed, but no other, information, and
  4. (d) contains such other particulars as may be prescribed.

(5) In this section, "prescribed" means prescribed by regulations made by the Ministers.").

The noble Lord said: In moving Amendment No. 11 I will also speak to Amendments Nos. 13 and 14, which are grouped with it. The noble Lord, Lord Skelmersdale, will be moving Amendment No. 12 to Amendment No. 11 and I will deal with that after he has spoken to it.

Amendments Nos. 11, 13 and 14 address the particular problems that breeders of vegetatively propagated ornamental plants face in enforcing their rights.

Ornamental plants are traded to the public through a wide range of retail outlets, including garden centres, supermarkets and by mail order. Ornamental plants, by their very nature, are easy to multiply through, for example, taking cuttings or using modern tissue-culture techniques. The products—for example, rose bushes or pot plants—which have been produced legitimately and on which royalty has been paid, can easily be diverted from their proper end use and used for further propagation, without the breeder's authority, as they are traded through a chain to the final consumer.

Illicit propagation, where no royalty is paid, enables less scrupulous traders to undercut those who are operating legitimately and gives them an unfair advantage. Plants which have been produced through illicit propagation are the same as those produced by authorised propagation—it is, after all, a condition of protection that plants reproduce true to type. A plant breeder cannot therefore identify infringing material by looking at the plants. He needs to know the source of the plants on sale.

If the seller refuses to provide information on where he obtained the plants—and those who knowingly trade in illicitly-produced protected varieties will almost certainly refuse to do so—then the breeder is left with a strong suspicion that his rights are being infringed, but nothing more.

The new clauses provide for plant breeders to issue information notices, in a form prescribed by Ministers in regulations, to people trading in plants or directly made products of protected varieties. Where the trader refuses to provide the information requested within a period specified in the regulations, without reasonable excuse the clauses require the courts to presume that the material or directly made products to which the notice relates were obtained in circumstances which infringed the breeder's right, unless the defendant can show otherwise. In effect, therefore, the burden of proof is reversed in these very carefully defined circumstances.

The information to be provided will not be onerous. I envisage that it will basically be details of the supplier and the amount of material supplied by him. It is reasonable to suppose that anyone selling plants, for example, will know who he bought them from and how many he bought.

The breeder must treat the information obtained in a notice as confidential, except where he uses it to establish whether his rights have been infringed, or in infringement proceedings. If the breeder breaches this obligation of confidentiality, the person who supplied the information will be able to bring an action for breach of a duty of confidentiality.

I must emphasise, of course, that I expect plant breeders to use these provisions in a proportionate and sensible way in respect of transactions which are in the normal course of business. There should be no question of plant breeders laying siege to local church fetes and bring-and-buy sales—and presumably car boot sales—demanding information on the source of plants on the plant stall. That would be Big Brother. I also emphasise that the clauses do not permit plant breeders to serve notices on private individuals growing plants in their own gardens, for their own private and non-commercial purposes.

I know ornamentals breeders, and their customers who trade in legitimately produced material, will welcome these amendments. I beg to move.

Lord Skelmersdale moved, as an amendment to Amendment No. 11, Amendment No. 12: Line 14, leave out from ("proved") to end of line 15.

The noble Lord said: I should declare an interest in that I am a director of a family horticultural firm. Doubtless your Lordships will take what I am about to say with your customary pinch of salt because of that declaration of interest. However, borrowing from a Downing Street declaration, I have as of this moment no selfish strategic or economic interest in the Bill.

I could hardly be unaware of the long-running sore in the horticultural industry which is characterised by a diverse and open market at all levels of production and sale. As the noble Lord, Lord Carter, almost said, any unscrupulous person can purchase a plant at retail level and from that plant multiply up commercial quantities for resale. The breach of plant breeders' rights is only discovered when a protected variety, cut flowers, foliage, or whatever, is offered for sale as a finished product. That event is obviously some distance from propagation. The breeder cannot show unauthorised use of propagating material or whether he had enjoyed a reasonable opportunity before the harvested material was obtained to exercise his rights in relation to the unauthorised use of the propagating material. Thus the drafting of Clauses 6(3) and 6(4) turns on itself to defeat the plant breeder. I therefore congratulate the noble Lord, Lord Carter, on introducing the new clauses, marked as Amendments Nos. 11, 13 and 14 on the Marshalled List today, recognising as they do that the person best placed to know the source of the harvested material is the person who is offering that harvested material for sale.

The new clauses propose that a plant breeder submit a limited questionnaire in a form to be laid out by Ministers in regulations. Incidentally, the last time, during debate on an earlier clause, the noble Lord mentioned matters prescribed under regulations I think I heard him say that the ministry did not intend to make any prescription. Perhaps he can confirm that on this occasion prescription will take place.

Assuming that it will take place, if the breeder does not receive a straight answer, the burden of proof in relation to the unauthorised use of propagating material should shift on to the person offering the harvested material for sale. That simple adjustment provides a plant breeder with the opportunity of making an application to the civil court seeking to exercise his rights in relation to that harvested material. The person who has offered for sale the harvested material would have a right to defend such action and the opportunity of proving that either the harvested material had not been obtained through unauthorised use of propagating material or that the plant breeder had had reasonable opportunity to exercise his rights at a higher stage of production. I hope I have interpreted the new clauses, which are to say the least rather complicated, correctly.

I further assumed that the information provided by the first person approached would enable the plant breeder to serve a similar questionnaire on the person who had been the supplier to that person, and so on, until the chain was established. This shift in the burden of proof, which of course is not in itself final and which is subject to the ruling of the court in which any proceedings are tried, would underpin fair competition between enterprises in the horticulture sector. That is what we all want. So all well and good. However, there is a worry.

The worry is that one part of the first new clause potentially drives a coach and horses through an admirable protection for the plant breeder. A defence is given in lines 14 and 15 of Amendment No. 11 which allows the grower to show, that he had a reasonable excuse for not supplying the information", to the breeder. What does the Minister mean by "reasonable"? Would he, for example, find it reasonable for the dealer to refuse to give information to the breeder on the grounds that the information was commercially confidential? Could the argument be that since the dealer in plants had found a cheap source he would not want his competitors to know that source? In this context it may be relevant that some of the large plant breeding firms also grow and sell their own crop. Another excuse that springs to mind rests on the fact that plans are often sold at auction, particularly in Holland, in large quantities, sometimes with no accompanying documents. Would that be a reasonable excuse? I beg to move.

Baroness Anelay of St. Johns

I should make it clear from the beginning that we support the objective behind Amendments Nos. 11, 13 and 14. The major problem of enforcement of rights is peculiar to ornamentals and is of equal concern to both breeders and licensed growers. The British association representing breeders has some 300 nursery firms licensed to produce protected ornamental varieties. I am grateful to that organisation for the information it provided on this matter.

My noble friend Lord Skelmersdale has clearly outlined the problems facing BARB in enforcing breeders' rights. I do not propose to repeat those. I merely endorse them. In moving his amendment he has raised some reservations with regard to the phrasing of the government amendment. I listened with care to the points raised by my noble friend. I shall be interested to hear the Minister's response to them.

4.45 p.m.

Lord Carter

Before I respond to Amendment No. 12 perhaps I may correct a statement I made about car boot sales. It has just occurred to me that car boot sales are for money. So a breeder might want to take action against a seller there and could therefore serve an information notice.

Amendment No. 12 seeks to remove the provisions in Amendment No. 11 which provide that the burden of proof in infringement proceedings is not reversed if the defendant shows that he had a reasonable excuse for not supplying the information. We would say that it is for the courts to decide what constitutes a reasonable excuse. The kind of circumstances where a defendant might be able to rely on the provision are, for example, if his premises have been burgled and his records have been destroyed in the process. Without it the presumption would operate and the defendant would have no way of displacing it. This kind of defence is very common in UK law. I believe that it is right that it should be available in respect of information notices.

The noble Lord asked me to confirm that regulations will be made. The answer is yes. With that explanation I hope that the noble Lord will feel able to withdraw his amendment and that the Committee will then accept my amendment.

Lord Skelmersdale

I shall of course consider further what the noble Lord has said and in a moment ask leave to withdraw my amendment. Before doing so, perhaps I may say that the whole object of the exercise is surely to avoid going to court if it is possible. That is my instant reaction. Therefore, the clearer the Bill can be to avoid that, the better. I beg leave to withdraw the amendment.

Amendment No. 12, as an amendment to Amendment No. 11 , by leave, withdrawn.

Amendment No. 11 agreed to.

Lord Carter moved Amendment No. 13: After Clause 13, insert the following new clause—

PRESUMPTIONS IN PROCEEDINGS RELATING TO PRODUCTS MADE FROM HARVESTED MATERIAL.

(" .—(1) This section applies to any proceedings for the infringement of plant breeders' rights as respects any product made directly from harvested material.

(2) If, in any proceedings to which this section applies, the holder of the plant breeders' rights proves, in relation to any product to which the proceedings relate—

  1. (a) that it has been the subject of an information notice given to the defendant by or on behalf of the holder, and
  2. (b) that the defendant has not, within the prescribed time after the service of the notice, supplied the holder with the information about it requested in the notice.
then, as regards the product in relation to which the holder proves that to be the case, the presumptions mentioned in subsection (3) below shall apply, unless the contrary is proved or the defendant shows that he had a reasonable excuse for not supplying the information.

(3) The presumptions are—

  1. (a) that the harvested material from which the product was made was obtained through unauthorised use of propagating material,
  2. (b) that the holder did not have a reasonable opportunity before the harvested material was obtained to exercise his rights 841 in relation to the unauthorised use of the propagating material, and
  3. (c) that no relevant act was done, before the product was made, as respects the harvested material from which it was made.

(4) An act is relevant for the purposes of subsection (3)(c) above if it is mentioned in section 6(1) above and is—

  1. (a) done with the authority of the holder, or
  2. (b) one in relation to the doing of which he has a reasonable opportunity to exercise his rights.

(5) The reference in subsection (2) above to an information notice is to a notice which—

  1. (a) is in the prescribed form,
  2. (b) specifies the product to which it relates,
  3. (c) contains, in relation to that product, a request for the supply of the prescribed, but no other, information, and
  4. (d) contains such other particulars as may he prescribed.

(6) In this section, "prescribed" means prescribed by regulations made by the Ministers.").

The noble Lord said: I spoke to this amendment with Amendment No. 11. I beg to move.

On Question, amendment agreed to.

Clauses 14 to 31 agreed to.

Lord Carter moved Amendment No. 14: After Clause 31, insert the following new clause—

DISCLOSURE OF INFORMATION OBTAINED UNDER SECTION (Presumptions in proceedings relating to harvested material) or (Presumptions in proceedings relating to products made from harvested material)

(" .—(1) If the holder of plant breeders' rights obtains information pursuant to a notice given for the purposes of section (Presumptions in proceedings relating to harvested material) or (Presumptions in proceedings relating to products made from harvested material) above, he shall owe an obligation of confidence in respect of the information to the person who supplied it.

(2) Subsection (1) above shall not have effect to restrict disclosure of information—

  1. (a) for the purposes of, or in connection with, establishing whether plant breeders' rights have been infringed, or
  2. (b) for the purposes of, or in connection with, any proceedings for the infringement of plant breeders' rights.").

The noble Lord said: This amendment was spoken to with Amendment No. 11. I beg to move.

On Question, amendment agreed to.

Clauses 32 to 39 agreed to.

Schedule 3 agreed to.

Clauses 40 to 44 agreed to.

Clause 45 [Regulations and orders]:

Baroness Anelay of St. Johns moved Amendment No. 15: Page 18, line 2, at end insert— ("() Before making any regulations or orders under this Act the Ministers shall consult such bodies appearing to them to be representative of farmers and growers and of the holders of plant breeders' rights.").

The noble Baroness said: In some 10 clauses of the Bill Ministers are taking powers to make regulations or orders. Given the complexity of many of the issues concerned, and the important commercial implications for the parties concerned of changes in regulations, we believe it is highly desirable that there is a statutory guarantee that Ministers will consult with the organisations which represent farmers and growers and the holders of plant breeders' rights before they then exercise their powers under secondary legislation. The amendment is designed to introduce such a duty. I hope the Minister is able to accept it. I beg to move.

Lord Carter

When I saw the amendment on the Marshalled List it seemed to be familiar. In my 10 years of Opposition on agriculture and other subjects I must have moved a consultation amendment any number of times. I was therefore quite prepared to be advised to resist, but I had overlooked that there has been a change of government! So I am delighted to tell the noble Baroness that I can accept the amendment in principle.

In practice, officials at the Plant Variety Rights Office already consult all interested parties, including the representatives of farmers, growers and plant breeders on proposals for regulations. We agree that this good administrative practice should be made a legal requirement. But here comes a familiar phrase—the amendment as drafted is not quite right. It needs to embrace more interests than just farmers, growers and plant breeders. For example, the seedsmen have an interest. If the noble Baroness will agree to withdraw the amendment, I shall arrange for a government amendment to be brought forward at Report stage.

Baroness Anelay of St. Johns

It was almost third time lucky, but not quite. I am grateful for the response of the noble Lord. I hope that the Government continue to be a listening Government for the brief time that they will be on that side of the House. However, in view of the circumstances today, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 agreed to.

Clauses 46 and 47 agreed to.

Clause 48 [Consequential amendments]:

Lord Carter moved Amendment No. 16: Page 18, line 28, at end insert— ("(2A) In Schedule 4 to the Parliamentary Commissioner Act 1967, in the entry relating to the Plant Varieties and Seeds Tribunal, for the words after "Tribunal" there shall be substituted "(referred to in section 39 of the Plant Varieties Act 1997)".").

The noble Lord said: This is a technical amendment to change a reference in the Parliamentary Commissioner Act 1967 previously overlooked in the Bill. It revises a reference to the Plant Varieties and Seeds Act 1964 in relation to the Plant Varieties and Seeds Tribunal so that it refers to the relevant provisions of the Bill. I beg to move.

On Question, amendment agreed to.

Clause 48, as amended, agreed to.

Clause 49 agreed to.

Schedule 4 [Repeals]:

Lord Carter moved Amendment No. 17: Page 26, column 3, leave out lines 33 to 40 and insert ("Part I").

The noble Lord said: This is a technical amendment concerning the extent to which the Bill repeals the Plant Varieties and Seeds Act 1964. As presently drafted, Schedule 4 leaves part of Section 10 of the 1964 Act in force. It should not do so, and this amendment provides for all of Part I of the 1964 Act to be repealed. I beg to move.

On Question, amendment agreed to.

Schedule 4, as amended, agreed to.

Remaining clauses agreed to.

House resumed: Bill reported with amendments.