72 I EUROPEAN SEED I EUROPEAN-SEED.COM GIANT VIEWS BY: CHRISTOPHER GREEN C hange is a known certainty about BREXIT. The tentacles of European policies will contract as British agriculture undergoes reform. Plant breeding is an activity; the actual business is managing and opti- mising the resultant intellectual property (IP). “Is IP management a regular item on your Board Agenda?” is a key question that I ask CEOs of plant breeding com- panies. Responses invariably are of the nature “Yes of course, royalties are our life blood”. The response demonstrates that executive discussions often focus on royalty as an income stream tracking performance against budgets and fore- casts. But is the actual management of that income stream efficient, effective and continually under review? Plant breeders’ rights and patents are mechanisms of IP, enshrined in law. These allow the innovator to structure how they may wish to be remunerated for their investment. But here’s the rub. Probably the most undervalued aspect of IP within an organisation is the acquired knowledge that exists within it. It is the acquired knowledge within a business that makes IP work. The plant breeding industry excels in its technical innovation; sadly, however, when it comes to commer- cialisation, the seed industry lacks crea- tive and progressive thinking to redress the widening imbalance in capturing the true value of new improved varieties. Christopher Green BREXIT AND THE IP ENVIRONMENT BEYOND Seed is the transfer of innovation. Unlike other forms of IP, it is easily and cheaply reproducible. Moreover, it is reproduced by the user. Seed sellers will have it that the reason why a grower opts for using farm saved seed (FSS) is one of cost. But that is in total denial that the reason they opt to reuse the variety in the first place, is that the variety has proven its worthiness on the farm. Putting this another way, the unique genetics selected by the breeder is valued by the grower. Seed and genetics are not the same. As an industry we should probably start to refer to farm saved genetics as opposed to farm saved seed. Farmers have the privilege to use FSS and breeders are entitled to benefit through payment of “equitable remuner- ation” for the use of that variety. But what is equitable when, for the same genetics, a user of FSS is paying a rate half of that which is applied to a farmer growing cer- tified seed? Taking into account collec- tion fees, evasion and non-compliance, European plant breeding innovation is being starved of its just and equitable income by a discriminatory system. FSS is established on millions of hectares throughout Europe and last year for the first time in Germany there was more FSS winter wheat sown than certified. As the trend continues new business models and approaches are needed. BREXIT negotiations will be com- plex. The National Farmers Union (NFU) continues to lobby for the rights to move FSS between holdings and with the changing dynamics and ownership of farms and accepting the effective- ness of the NFU lobby, I believe that the rationale against free movement will be hard to defend. I fear that this could legitimise the commercialisation of FSS. In bringing their case forward, the NFU will no doubt endeavour to provide reassurances that the equitable remuneration due will be paid by the user. But without evidence, the position of monitoring and controlling IP will be challenged and probably undermined. The FSS agreement between the British Society of Plant Breeders (BSPB) and NFU has delivered millions of pounds to breeders over the years, but we should not be wholly reliant on that agreement nor indeed should it restrict breeders to collectively or individually develop their own business models for IP management. Consumers are increasingly demand- ing product transparency, assurance and provenance. In the UK there are a number of successful value share contracts, some incorporating generic trademarks, which strengthens the organisation’s manage- ment of IP rights. However, we need to accelerate our evolution with a more dynamic approach to royalty collection and its management. This justifies and reinforces the need for the breeding indus- try to adopt an evidence based approach in managing IP. In the UK, less than 15,000 farmers produce 80 per cent of our arable output, yet we have a dysfunctional value change where the breeders have little direct contact with the users of their IP. However, the acceptance by UK oat and pulse growers, relatively minor crops in the UK, to enter into contractual royalty sharing agreements directly with breeders under a Royalty Area Collection Scheme, indicates an acceptance to change. This business model allows for direct knowl- edge exchange between the provider of the innovation (the breeder) and user (grower) where both share the common interest of optimising that variety’s per- formance on the farm. So not an end point royalty system, but a start point one. With BREXIT and agricultural reforms on the horizon, the time is right for fresh, new and innovative approaches to IP management. However, as has proven the case in the past, the first chal- lenge is where do we find the adventurist visionaries to champion the cause? Editor’s Note: A more detailed version of this Giant Views can be found on our website: www.european-seed.com