In its decision dated 28 March 2018 the CPVO decided about an application for grant of a compulsory licence pursuant to Article 29 of Council Regulation (EC) No. 2100/94 of 27 July 1994 on Community Plant Variety Rights in respect of a blackcurrant variety. The Applicant had failed to achieve a favourable outcome of its negotiations with the variety holder for grant of a licence. For this reason, the Applicant strived for grant of a compulsory licence by the CPVO.
In its decision of 28 March 2018 the CPVO regarded the request not to be well-founded and thus rejected the same.
As outlined earlier in this blog [here], the grant of a compulsory licence requires a public interest that prevails over the interests of the right’s holder in enjoying the exclusive nature of the exploitation of its protected breeding result.
Article 41(2) of Commission Regulation (EC) No. 874/2009 of 17 September 2009 provides for three circumstances that may constitute a public interest:
– The protection of the life or health of humans, animals and plants;
– The need to supply the market with material offering specific features;
– The need to maintain the incentive for continued breeding of improved varieties.
This list is not final. As confirmed by the CPVO in its decision, the Applicant has the burden of proof regarding the question of whether a public interest justifies the grant of the requested licence. It will not conduct such investigations ex officio.
The CPVO emphasized correctly in its decision that intellectual property rights fulfill two closely related roles, namely to protect the innovator’s investments and to make the spread of technological progress easier by providing incentives for innovations. IP rights grant innovators a temporary right to exclude others from using or making the goods or services protected by those rights as a sort of reward for having disclosed the innovation in an application for grant of protection. To safeguard the innovation and the disclosure of the breeding results, the CPVO grants a timely limited exclusive right that is a proprietary right within the meaning of Article 17 of the Charter of Fundamental Rights of the European Union. This proprietary right is limited on the one side by a number of exceptions to the scope of protection of the CPVR, one of which is the so-called Breeder’s Exemption in Article 15 lit. c of the Regulation, besides other restrictions vested in this Article. As there may be specific circumstances resulting in an overriding public interest, in addition to these restrictions defined in the law, compulsory licences may be granted.
Whether a public interest is given that justifies the grant of a compulsory licence depends on the circumstances of the individual case. Moreover, the interests of the title holder have to be weighed against the public interest. According to a decision of the German Federal Court of Justice to which the CPVO refers in its decision, the question of whether there is a public interest in the grant of a compulsory licence must be answered by weighing all circumstances and interests involved in the individual case. According to the German court it should be borne in mind that the legal system grants the holder of an intellectual property right (in the case referred to a compulsory licence in a patent was applied for) an exclusive right that may, in principle, be determined solely by the owner. For this reason the public interest can only be affected if special circumstances justify the withdrawal of the full recognition of the exclusive right in the interest of the patent proprietor because the interest of the general public dictates the exercise of the patent by the licence seeker. These considerations developed by the German Federal Supreme Court in relation to compulsory licences in patents are valid also in relation to any compulsory licences in relation to IP rights.
According to the facts forwarded by the Applicant in the case decided by the CPVO, the protected blackberry in which it sought a compulsory licence had, in comparison to the alternatives on the market, unique characteristics that made it unmatched to other blackcurrant varieties. These characteristics were alleged to be a consistent high yield of good quality fruit, harvest seasons not in conflict with other cultivators (early mid-season), even ripening at harvest time, bud breaking for the whole duration of winters reflecting good adaption to both cold and warm winters, good juice quality from an organic point of view, good compositional analysis in terms of the specific juice market requirements and excellent colour due to the presence of high amounts of antienzymes. The CPVO, in light of the material and information forwarded by both parties, came to the conclusion that certain characteristics listed were present also in other varieties on the market, whereas with respect to other listed advantageous characteristics of the protected variety, such as even ripening at harvest time, no evidence was given that the protected variety, as compared to other varieties, did or did not show the same. For this reason, the CPVO concluded that the variety at issue does not fulfill the requirement of Article 41(2)(b) of the Proceedings Regulation on the material offering specific features as those features are also offered by other blackcurrant varieties. The Applicant failed to provide evidence to support that other varieties do not have the same or similar characteristics. In addition, the CPVO concluded that the Applicant also failed to prove a need to supply the market with material of the variety at issue. Moreover, the fact that the public funding of the breeding program from which the variety issue arose was no reason to establish a public interest.
The decision is welcome. As far as the facts of the case have been published, the application appeared to be based only on private commercial interests to use a protected variety that guaranteed premium characteristics at premium price. As compulsory licences are, as outlined above, a restriction of a property right, only exceptional circumstances can establish a public interest in justifying a restriction of property in the sense of Article 17 of the Charter of Fundamental Rights of the European Union. Commercial interests of competitors can by no means justify a compulsory licence, in particular if the market is supplied by material of other varieties, unless the variety at issue has such outstanding properties that the exploitation of these properties results in a market situation that is characterized by a need to obtain sufficient material for the public at large as only through that material can public health be improved. Such a situation presumably is rarely given.
Thus, the mere fact that the variety offers certain advantages in comparison to those available on the market is not sufficient to justify a compulsory licence. As long as the market can be supplied with other, essentially equivalent, alternatives, a public interest has to be denied.
 Judgment of 11 July 2017 in Case XZB2/17 Raltegravir
Published on 17 Sep 2018