Understanding the licensing for PBR varieties ::

What is PBR?

According to Wikipedia, Plant breeders’ rights (PBR), also known as plant variety rights (PVR), are rights granted to the breeder of a new variety of plant that gives the breeder exclusive control over the propagating material (including seed, cuttings, divisions, tissue culture) and harvested material (cut flowers, fruit, foliage) of a new variety for a number of years.

PBR is a complex process, but the important take away is that any material over which PBR has been granted is fully protected by the laws of Australia and severe penalties can be applied to anyone who infringes that legal protection.

What are the criteria for a plant to be eligible for PBR?

A variety must be new, distinct, uniform and stable

NEW – it has not been commercialised for more than one year in the country of protection

DISTINCT – it differs from all other known varieties by one or more important botanical characteristics, such as height, maturity, color, etc.

UNIFORM – the plant characteristics are consistent from plant to plant within the variety

STABLE – the plant characteristics are genetically fixed and therefore remain the same from generation to generation, or after a cycle of reproduction in the case of hybrid varieties

How does someone apply for PBR to protect a new variety?

The average time for Plant breeder’s rights registration is two and a half years. You will need to submit Applications part 1 and part 2 and hire a qualified person (QP) to assist with a growing trial. There are fees at various stages of the process.

Where can you find more information?

The Australian Government has an extensive website that gives you all of the information you need to understand the PBR of varieties within your industry.

Visit Australian Government IP Australia Website

How were these varieties – G, J, P & R – developed?

The original breeding programme for Macadamia varieties in Australia was started by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) over 20 years ago. As macadamia trees take several years to bear their first crop the process of breeding, growing and evaluation is a lengthy one spanning many years.

The breeding programme was tendered out by Hort Innovation and through a competitive process was awarded to the Queensland Department of Agriculture & Fisheries (QDAF). The breeding and trialling of new varieties were continued under this project scope before a continuation of the project moved over to the Queensland Alliance for Agriculture and Food Innovation (QAAFI).

Its important to note that the funds from the sale of these new varieties are returned to the IP holders – Hort Innovation and Department of Agriculture and Fisheries (Queensland) – where they are re-invested in the future development of the Macadamia industry in Australia.

Why is there a commercialisation partner?

Once the varieties had been fully assessed, the next task for Hort Innovation was to identify an experienced commercialisation partner. Hort Innovation are responsible for ensuring that levy funds are invested by a competitive tender system. A set of tender requests were issued to the open market, on two occasions, and interested businesses were asked to submit a proposal against a detailed set of requirements laid out in the tender document called a Request for Proposal (RFP).

The process of commercialising a new variety of plant requires a very detailed understanding of the legislative framework protecting intellectual property in Australia, the ability to tightly manage access to the new plant material through licensed plant propagators and the processes in place to manage the financial aspects of the arrangement.

Why was Macadamia Innovation selected in the tender process?

The organisation behind Macadamia Innovation is Australasian Plant Genetics (APG). New strawberry varieties have been bred in Australia for many years and APG now has years of experience managing the commercial arrangements behind some of the most widely grown strawberry varieties currently in Australia. APG responded to the open tender using the knowledge and expertise built in the strawberry industry and was chosen by a competitive evaluation as the commercialisation partner for the four new macadamia varieties.

How does the licensing work? ::

This article has been reproduced from the Australian Macadamia Society News Bulletin | WINTER 2018 with kind permission from authors – Roger Broadley, Australasian Plant Genetics, David Bell, Hidden Valley Plantations and Ian McConachie

The Australian macadamia industry is founded on varieties that were bred by the Hawaiian Agricultural Experiment Station (HAES) and more latterly by Henry Bell and his son David through the family’s Hidden Valley Breeding Programme (A varieties). The levy-backed industry programme has just released its first batch of four new macadamia varieties and it is these four high yielding new varieties that are available here through Macadamia Innovation.

No royalties were paid on HAES varieties, which were bred by a publicly funded institution, a situation unlikely to be repeated.

A203 and A268, the currently popular varieties from the Hidden Valley program, were released to the industry on the condition, and with agreements in place with nurseries and growers, that royalties would be paid on tree sales. Unfortunately, enough of these agreements have fallen by the wayside that compliance with the royalty regime is currently very poor.

Today variety improvement is a competitive, international activity with countries such as China, Vietnam, and South Africa establishing breeding programmes. This is opening a new frontier for the macadamia industry where paying royalties will become part of our investment in the future by funding the development of improved varieties.

When you buy any of the new Macadamia Innovation varieties – G, J, P & R – from a licensed nursery propagator, there is a $4 + GST royalty fee added to the cost price of the plant – per plant.

Macadamia Innovation receives a small percentage of this royalty as the commercialisation fee for managing access to and sales of any of the new varieties.

The remaining amount of the royalty is returned to the owners of the Plant Breeders’ Rights (PBR) for each variety. Part of the revenue from the royalty is returned back to the Macadamia Fund managed by Hort Innovation for re-investment into industry R&D projects, including further breeding programmes.

Why are royalties important? ::

Breeding programmes are expensive and take time. They involve crossing and selecting different varieties, germinating seeds from the cross, planting trees and measuring many facets of their performance. For macadamias, one cycle may take 20 years from germinating a seed to assessing performance of a single tree, and then planting it again in a semi-commercial block of trees to evaluate commercial performance.

Royalties make this process financially possible by providing an income stream for what would otherwise be an expenses-only undertaking. A royalty is a payment to the Intellectual Property (IP) holders of a new scion or rootstock variety. The IP holders can take a range of measures to protect their variety such as gaining PBR (a legislated framework with penalties for non-compliance), variety patenting and private agreements. The royalty can be charged in many ways, but in the macadamia industry, it is typically a one-off per tree royalty at the time of tree purchase. Usually, it is collected by the nursery, and purchasers sign a non-propagation document before trees are delivered.

An example of our Non-Propagation Agreement can be found here

Why do we need new varieties? ::

Almost all food crops have, through plant breeding, achieved major advances in quality and product diversity. Most of the fruit and vegetables available in supermarkets today are the results of many international breeding programes.

While growers can boost their bottom line with improved management and farming practices, it has been the experience in many industries that improved genetics is a key technology in increasing farm profitability, both through increased production and decreased costs.

Although there are a couple of exceptions, almost all the major macadamia varieties currently being grown are the result of selection or breeding. In other words, they have been actively sought out in structured and methodical breeding programme, and this is no different from most other horticultural industries.

GENETICS x ENVIRONMENT x GROWING PRACTICES

Choosing to plant one of the new Macadamia Innovation high-yielding varieties will take care of the genetics part of the success equation – then add the right environment and best practice growing practices. That’s the formula for guaranteeing future success potential.

What other breeding programmes are active? ::

Today, there are three sources of new varieties in Australia:

The levy backed CSIRO-DAF-QAAFI Breeding Programe
[QAAFI is a partnership between the Queensland Department of Agriculture and Fisheries (DAF) and University of Queensland (UQ)]
Four new varieties from this programme (known as G, J, P & R) have recently been released by DAF to industry, and their commercialisation is being managed by the Queensland Strawberry Growers’ Association (QSGA) through this website – Macadamia Innovation.
The Hidden Valley programme is privately run by the Bell family. The outputs of this programme are widely adopted, and it is currently active but at serious risk of closing due to lack of royalty compliance.
The variety MCT1, which was gifted to the Macadamia Conservation Trust by Ian McConachie, emerged from a grower implemented programme supported by DAF that is no longer active. It is being commercialised at cost by ANFIC.

Having more than one macadamia breeding programme increases the probability of developing better, more productive varieties for macadamia growers and processors and providing a better choice of varieties, so it is important to keep our options open in this area.

Where do royalties go? ::

Royalties are almost universally reinvested back into breeding programmes and other areas of research that benefit the entire Australian industry.

Several million dollars of macadamia grower levies have been invested over many years in the CSIRO-DAF-QAAFI breeding programme, with additional dollar contributions by CSIRO, DAF, QAAFI and Hort Innovation and significant input from industry.

Royalties from the four newly released DAF varieties G, J, P & R will be paid to DAF and to Hort Innovation. DAF distributes its share of the income in various ways (such as paying salaries), and Hort Innovation allocates any income it receives back into the macadamia industry R&D fund.

In the case of the Hidden Valley A-series varieties, royalty income pays for the operation of the breeding programme and other R&D activities. This program receives no grower levies or government funding, so its viability depends entirely on royalty income. Without those royalties, it is possible that this important programme may close, to the detriment of the Australian macadamia industry.

With MCT1, royalties are paid to the Macadamia Conservation Trust, which aims to conserve the four species in their natural habitat and in all other ways. With over 80% of the wild populations lost in the last 150 years, wild germplasm could become one of the Australian industry’s most valuable future assets.

Why should you pay royalties? ::

There are several reasons why it is important to invest in the future of the industry by paying royalties.

Fundamentally, it is simply the right thing to do

If you are benefiting from breeding programmes, you should pay your share of their costs.

If you do not pay, you are taking advantage of what may have been a lifetime of work for macadamia breeders.

If breeders do not get remunerated for the effort, time and work they put into developing new scion varieties and rootstocks, the breeding programmes will not be able to be funded into the future.