By International Licensing Platform Vegetable managing director Chris van Winden
Proponents of such patents claim that they foster innovation, knowledge-sharing and continued investments in research and development. Opponents argue that such patents are unnecessary because of the intellectual property protection offered by plant breeders’ rights and that patents impede the work of breeders because they can no longer gain access to biological materials, or can do so only after a delay or at a high cost.
This debate is highly relevant for breeding companies that develop new plant varieties and hence lay the foundations for the world’s food supply.
Not waiting for the outcome of the political and social debate, vegetable breeding companies have worked together to establish the International Licensing Platform Vegetable (ILP Vegetable).
This association (with breeding companies as members) was launched in November 2014 and has the aim to provide an easy way for plant breeders around the world to get guaranteed access to crucial plant breeding traits that are currently covered by patent claims by ILP member companies. The members of ILP Vegetable are obliged to make all their patents, covering biological material, accessible for the members of ILP.
The ILP’s licensing system is simple and transparent and offers fast, efficient and cost-effective access to traits, covered by a patent. If a member wants to take a licence to use a fellow member’s patented invention, the two parties start bilateral negotiations. If no agreement is reached within three months, the case is put to arbitration by independent experts.
The innovative aspect of the system is the method of arbitration. It uses a ‘baseball arbitration’ model, whereby both parties submit their licence fee proposal to the independent arbitrators, who then choose the most reasonable proposal. This forces both parties to adopt reasonable positions from the outset, because an unreasonable position will be rejected in favour of a more reasonable competing proposal.
Moreover the ‘losing’ party has to pay the costs for the arbitration process. Once a license fee is set by the arbitrators, this fee is communicated to all other parties to increase transparency.
Membership is open to all interested parties, regardless of whether they own patents or not. The ILP Vegetable started with 11 members, which comprise both listed companies and family businesses from all over the world.
Last year two important vegetable breeding companies became member of ILP (Semillas Fitó and Sakata). Nowadays all important vegetable breeding companies (except Monsanto) are member of ILP Vegetable and the members of ILP Vegetable represent more than 65 percent of the global vegetable seed market.
Looking back on the almost 3 year of existence of ILP Vegetable the conclusion is that the ILP system works well. With the development of the ‘baseball procedure’ in case of arbitration, it was expected that only a few or even no arbitration cases should happen in this period. And indeed no arbitration cases did occur up to now.
With regard to “trait patents” the ILP can in fact be considered as a safety net to get access to these patents and a way to stimulate patent holders to grant licenses to the other members at reasonable conditions.
ILP Vegetable received external recognition by several organisations whereby the arbitration system of ILP Vegetable is mentioned as a possible role model for establishment of FRAND (fair, reasonable and non-discriminatory) licenses.