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2 Leveling the Incentives Landscape: Adopting Measure Both `Internal´ and `External´ to IP Laws and Policies

2 Leveling the Incentives Landscape: Adopting Measure Both `Internal´ and `External´ to IP Laws and Policies

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7.2 Leveling the Incentives Landscape: Adopting Measure Both. . .



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move away from the strict value neutrality of intellectual property law; a move

towards ‘internalizing’ the negative effects of innovations, which are otherwise

treated as ‘external’ to the central concerns of intellectual property law. It is

notable, however, that the changes are implemented at the procedural level, and

not at the substantive level of the law. Furthermore, noted scholars identify several

factors that make the procedural preference for ‘green’ technologies problematic:

what constitutes ‘green’ technology and on what basis is the preference given to

such technologies in certain fields of innovation justifiable? What level of ‘green’ is

adequate for an invention to qualify for preferential treatment at the time of patent

prosecution?10

Arguably, the ‘internalist’/developing countries approach is justified on the

grounds that in the garb of denying IP protection, they are giving out a signal that

they do not want to incentivize R&D (or economic investments) in certain fields of

technology. This approach, while saving considerable amounts of public money that

would otherwise be required for the examination, grant, and maintenance of entire

categories of patents, may nonetheless be ineffective from the perspective of

preventing the dissemination and adoption of ‘undesirable’ technologies because a

denial of IP rights does not necessarily lead to non-commercialization. In fact, as

seen in Chap. 3 above, several such technologies do not need IP protection at all.

Furthermore, even if the technology is eventually copied by competitors as a result

of the absence of IP protection, it may result in making the product incorporating the

technology cheaper than its patented ‘green’ counterpart and increase its demand.

What is necessary for the promotion of sustainable innovation, particularly in

relation to plant varieties, therefore, is a combination of the above ‘externalist’ and

‘internalist’ approaches: The promotion of sustainable innovations using the

‘internalist’ approach is possible only if an environmental check is included as

part of the prosecution and enforcement stages of IP application. Further, technologies that are found, at either the prosecution or the enforcement stage, to not meet

the minimum or expected standards of environmental safety, (or which do not

promote the ideal of sustainable innovation), ought not only to be denied IP

protection, but also taxed or denied the right of commercialization. This would

ensure that the ultimate aim of denying IP protection to certain technologies,

namely, saving the environment or agrobiodiversity, is actually achieved.11

At the ‘externalist approach’ end, working in means of promoting

agrobiodiversity conservation and informal eco-friendly innovations outside the

intellectual property law framework will further guide innovative activity towards

the sustainable ideal. This can be done, for example, either by granting rights (other

than exclusive right) or rewards to those who engage in conservation activities, or



10

While these and similar questions are indeed tough ones for most fields of technology, they are

relatively easier to answer vis-a-vis current agricultural seed related innovations while the negative

impact of chemical intensive farming are increasingly well documented in the scientific literature.

11

Such exemptions from patentability would also pass the requirements under Article 27.2 of

TRIPs.



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7 Conclusions & Recommendations: Leveling the Incentives Landscape to. . .



by permitting saving and selection of seeds by farmers, where the aim of the farmer

is also to improve the seeds in situ. These and other recommendations for the

promotion of sustainable innovations in plant varieties are discussed in greater

detail herein below.



7.2.1



Establishing Checks and Balances Within the IP

Regime for the Protection of Plant Varieties



7.2.1.1



Tweaking the Indian Plant Variety Protection Law



As noted above, the Indian PPV&FR Act is an example of a sincere effort to level

the incentives landscape in order to promote both formal innovations as well as

informal in situ agrobiodiversity conservation efforts. However, there are several

amendments that can be made in the law to help it better achieve its stated

objectives.



7.2.1.1.1



Modifying the Researcher’s Rights Exemption



First, in relation to private sector or formal innovations by breeders, the Act provides a broad researchers’ rights exemption. Indeed, according to several stakeholders, this exemption is necessary in order to permit the advancement of breeding

activities. However, as seen in the case of the HMT controversy, these breeders’

rights limit farmers’ ability to claim royalties from the formal seed sector, other

than in very limited circumstances, namely if the farmers variety is repeatedly used

as a parental line for the creation of hybrids. Given the difficulties associated with

identifying the parental lines of hybrids unless the same are actually disclosed in a

plant variety protection application, there is a likelihood that corporation that are

unwilling to disclose a farmers’ variety as being a parental line, would skip the

procedure under the Act and market the hybrid while keeping the parental lines a

secret. Therefore, stricter provisions vis-a-vis disclosure of use of farmers’ varieties

is necessary under the PPV&FR Act. Alongside, the researchers’ rights ought to be

limited significantly when a farmers’ variety is used in a formal breeding program.

This one-way limitation of breeders’ rights is necessary because while the

formal plant breeders have access to advanced technologies, large testing grounds

and extensive skilled and semi-skilled manpower, farmers, or informal seed

improvers, do not. The right to equality (Article 14) enshrined in the Indian

Constitution requires that those who are placed in unequal situations ought not to

be treated equally, but equitably, in order to ensure that justice is done. Requiring

farmers and well as breeders to meet the same set of requirements in order to obtain

plant variety protection certificates is already inequitable in that farmers are not

equipped to meet the exacting DUS standards. However, granting breeders access

to farmers varieties in the same way in which farmers and other breeders have



7.2 Leveling the Incentives Landscape: Adopting Measure Both. . .



241



access to breeders’ varieties adds to the inequity meted out to farmers. This is not

only because breeders are in a much stronger position to exploit farmers’ varieties,

but also because most breeders’ varieties are such that preclude farmer seed saving

and seed improvement. Therefore, it is necessary to limit the scope of researchers’

rights when the variety being used is a farmers’ variety.

However, this limited researchers’ exemption must only be applicable to

breeders and not to other farmers wishing to further improve a farmers’ variety.

Here again, equity requires that since farmers are known to willingly share their

newly created varieties with other farmers, legislations seeking to encourage farmer

innovations and in situ agrobiodiversity conservation, ought not to disrupt the

traditional socio-cultural practices of seed sharing and seed exchange, but ought

rather to promote it.

In this regard it is relevant to note that during the farmer surveys conducted as

part of this research, it was noted that farmers are well aware and are willing to

acknowledge the contribution of a specific farmer towards improving a variety.

Identifying the farmer-creator of a new farmers’ variety is therefore not difficult in a

village set-up. However, in order to prevent any cases of uncertainties, the local

farmer elected government representatives (called the gram panchayats) must be

empowered to grant certificates of recognition to farmer-creators of new varieties.



7.2.1.1.2



Expanding the Circumstances in Which Farmers Can Claim

Compensation for Improving a Variety



Furthermore, in the light of the HMT controversy, especially when coupled with the

fact that most of India’s germplasm is considered by the public sector to already be

in the public domain and under the control of the National Bureau of Plant Genetic

Resources in New Delhi, it is necessary to give rights other than those dependent on

registration, to farmers engaged in in situ crop improvement and/or

agrobiodiversity conservation. As in the case of HMT, it is easy and therefore

very likely that a formal sector plant breeder (like the agricultural university in the

HMT controversy) can acquire a handful of a farmers’ variety from the farmers’

field, purify it further before making selections there from, and then register the new

‘improved’ selection in their own name. Although doing so is inequitable, it is not

illegal under the current law. If the Indian law purports to be a protector of farmers’

rights, it must promote equitable conduct amongst those who are better placed than

farmers to make formal crop improvements necessary to acquire stronger protection

under the Act. Therefore, the Act ought to require a formal plant breeder making

selections from a protected farmers’ variety to compensate the farmer owner of the

farmers’ variety registration, irrespective of what the farmer’s original seed source

was. This again is necessary from the perspective of the right to equality guaranteed

under the Indian Constitution, which requires that unequals not be treated equally,

but equitably. However, other farmers wishing to use a protected variety either for

cultivation of crops on his own field or for further improvement must be free to do

so in the spirit of free exchange that is the continuing culture in Indian villages.



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7.2.1.2



7 Conclusions & Recommendations: Leveling the Incentives Landscape to. . .



Amending UPOV While Retaining the Flexibilities Under

Article 27.3(b) of TRIPs



As discussed in Chap. 3 above, the review of Article 27.3(b) is currently ongoing

due to a deadlock between members of TRIPs as to what, if any, modifications

ought to be introduced vis-a-vis the protection for plant varieties under TRIPs. In

the light of the multitude of social, economic, and scientific problems associated

with granting exclusive rights to plant varieties, as discussed in the previous

chapters, it is necessary that the flexibilities (or ambiguities) that inhere in the

wording of Article 27.3(b) not be done away with. This is particularly necessary to

permit countries, particularly biodiversity rich countries, to adopt sui generis

regimes best suited to their unique agricultural ecology and demography.

At the same time, as the pressure mounts to adopt a regime for the protection of

plant varieties as per the requirements of TRIPs, and as the membership of UPOV

continues to rise, it is necessary that UPOV grant its members certain flexibilities

beyond what are permitted under UPOV 1991. Particularly, it is necessary that

UPOV recognize the fact that large scale adoption of DUS criteria for the protection

of plant varieties leads to significant reduction of agrobiodiversity, not only because

the varieties protected under plant breeders’ rights regimes are, by the very requirements under these regimes, genetically narrow, but also because, as revealed by the

farmers surveys conducted in this research, farmers, even in poor countries, tend to

abandon in in situ agrobiodiversity conservation once new improved varieties are

released in the local markets. Here again, it is necessary to note that a mere

recognition of farmers’ rights whether they are broad (as under UPOV 1978) or

narrow (as under UPOV 1991) are not adequate to ensure that farmers will indeed

use these rights to conserve agrobiodiversity.

Therefore, UPOV must either introduce a modified DUS test to protect and

incentivize farmer innovations and in situ agrobiodiversity conservation, or institute mechanisms to compensate for the loss of agrobiodiversity resulting from the

widespread adoption of protected varieties, as discussed herein below.



7.2.2



Complementing Internal Checks Through External

Means



The importance of adopting means both internal and external to plant variety

protection regimes for the promotion of sustainable innovation (especially informal

innovations that are synonymous with in situ agrobiodiversity conservation) is

obvious if one accepts the three key findings of this study:

1. technological progress in relation to formal plant variety innovations are such

that largely render intellectual property rights regimes redundant;



7.2 Leveling the Incentives Landscape: Adopting Measure Both. . .



243



2. intellectual property rights for plant varieties are in essence a form of ‘perverse

incentive’ that interferes with agrobiodiversity conservation (especially in situ)

in the process of encouraging formal innovations; and

3. The ‘Creative Destruction’ (or destructive creation) witnessed in the plant

breeding industry make agricultural innovations as well as agriculture itself

non-sustainable in the long run.

These findings are discussed at length in the previous chapters of this study: The

first finds support in the qualitative findings discussed in Chaps. 4 and 8, and the

quantitative findings in the Indian context contained in Chap. 5. The second finds

support in the qualitative and quantitative findings discussed in this chapter; and the

third finds support in the discussions in Chap. 1 read with Chaps. 2–5.

Therefore, it appears that intellectual property protection is neither a necessary

nor the best means of promoting sustainable innovation in plant varieties. However,

since such regimes are now widely adopted and accepted, inter alia, due to the

mandates of TRIPs, it is necessary that adequate checks and balances exist outside

the scope of IP laws to neutralize or manage their negative impact (or negative

externalities). In this regard, the following recommendations require closer

investigation:



7.2.2.1



Imposing Pigouvian Taxes for Soil Pollution

and Agrobiodiversity Erosion



Pigouvian taxes are imposed on industries that pollute the environment while

producing a socially desirable product. Such a tax is imposed in order to make

the final price of the product reflect not only the costs of raw material and

manpower that went into manufacturing the product, but also the cost of the harm

caused to the environment as a result of the manufacturing process. The imposition

of such a tax makes the product dearer (i.e. more expensive) and results in the

reduced demand for such goods by the market, and therefore, hopefully, a reduced

supply leading to reduction in pollution levels. While such taxes are imposed on

industries that directly cause pollution, there is no evidence of such a tax being

imposed on corporations that promote such pollution via use of their goods by third

parties.

An example in this regard are seed companies that produce not only ‘improved’

high yielding seeds but also chemical fertilizers and pesticides that are a necessary

complement to their ‘improved’ seeds; without which, in several instances, the

seeds will not grow or give optimum results. The widespread adoption of such seeds

and chemical complements are now well know to cause soil degradation, water

pollution, reduction in water tables and depletion of agrobiodiversity (as discussed

in the context of Bt and Roundup Ready seeds in Chap. 3 above). Yet, governments

also grant subsidies for the acquisition, by farmers, of such improved seeds. As a

result, the social and environmental costs associated with the production and use of

these products is not reflected in the price of the seeds. This, in turn, leads to over-



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7 Conclusions & Recommendations: Leveling the Incentives Landscape to. . .



consumption, i.e. an artificially high demand for these seeds and therefore to

increasing environmental, ecological and socio-cultural problems.

It is necessary therefore that corporations engaged in production of chemical

input intensive seeds be made to pay taxes that reflect the negative externalities

associated with the adoption of such seeds by farmers. On the other hand, corporations engaged in R&D, production and distribution of seeds that are suited to

marginal environments and do not require artificial chemical supplements ought to

be rewarded via tax cuts.

A pigouvian tax would be meaningless unless implemented alongside with a

removal of subsidies attached with purchasing seeds that need heavy doses of

chemical supplements. While subsidies are necessary for poor sections of farming

societies, subsidies ought to be given only for adopting sustainable farming techniques that utilize seeds that do not need inputs that are harmful to the environment.

More in depth research, which is beyond the scope of the present study would

however be necessary to determine the manner and extent to which Pigouvian taxes

must be imposed and the kind and range of subsidies that must be put in place.



7.2.2.2



Support Work of Non-Governmental Organizations (NGOs)



During the course of the farmer surveys conducted for this study, rural agricultural

extension officers (RAEOs) as well as farmers confirmed that the primary task of

the government was to promote the adoption of new seeds, increase seed replacement rates and ensure that farmers receive information and benefit from declared

government subsidies. As revealed by the farmer surveys conducted in this study,

the level of farmer-trust in the government universities and extension services is

very high. On the other hand, non-governmental organizations working with

farmer-groups revealed that it is very difficult to make inroads into village areas,

interact with farmers and gain their trust.12 Particularly difficult is to convince

farmers to adopt traditional seeds and traditional, but scientifically proven methods

of increasing yields using natural or eco-friendly manures rather than chemical

supplements.

From the level of the farmers, it was also revealed that the art and science of seed

selection, saving and in situ seed improvement are increasingly becoming redundant and are therefore forgotten by farmers and RAEOs alike.

The role of NGOs in re-education farmers in their traditional wisdom, while also

introducing them to sustainable modern technologies, including improved seeds

that do not require chemical inputs and can be further improved by farmers, cannot

be understated. In order to encourage farmers to accept the guidance and expertise

of these NGOs, the government needs to play a more active role in introducing

trustworthy or accredited NGOs to village areas and helping them in their tasks. In



12

Discussion with Kishore Da, Art of Living Rural Development Program (Bangalore 18 February

2012), available with author.



7.2 Leveling the Incentives Landscape: Adopting Measure Both. . .



245



this context, it would also be necessary that the government change its current seed

replacement policy into one that promotes seed exchange between farmers rather

than merely pushing market-purchase of seeds each season.



7.2.2.3



Supporting Private Sector Efforts That Encourage

Agrobiodiversity Conservation



During the empirical surveys and interviews conducted as part of this study, it also

came to light that there are certain private companies that are encouraging farmers

in remote areas to cultivate only traditional varieties of pulses and other crops,

using organic cultivation methods.13 These products are then purchased in bulk by

these companies and sold as organic goods in niche market. Such activities ought to

be encouraged in order to promote agrobiodiversity conservation while also

improving the income of farmers engaged in such agriculture.

Similar efforts by NGOs to help farmer groups set up direct marketing outlets

(shops) in cities and towns must also be encouraged.14



7.2.2.4



Crop Insurance



Although the system of crop insurance is not well instituted in India, efforts can be

made to provide crop insurance schemes on preferential rates to farmers engaged in

in situ agrobiodiversity conservation and farmer level crop improvement. Because

most farmers in India cannot afford crop insurance, a system whereby the Pigouvian

tax collected from private companies engaged in production of input intensive

seeds is used for providing insurance coverage for poor farmers can be instituted.



7.2.2.5



Promoting Formal R&D into Landraces and Means

of Increasing Yield of Landraces Using Sustainable

Eco-Friendly Methods



It is relevant to recall the fact that the HYV seeds of the Green Revolution were

engineered to grow in the presence of chemical fertilizers and pesticides. Before

the introduction of HYV seeds, traditional seeds were known to not give (any) yield

in the presence of chemical fertilizers. Since the Green Revolution did not

include pulses seeds, a scientific inquiry into whether decreasing pulses yields,

Discussion with farmer group from Himachal Pradesh visiting ‘Dilli Haat’ an arts, crafts and

local produce market in New Delhi (New Delhi 10 January 2012). According to the farmers, the

TATA company in India has entered into an agreement with them to market their organically

produced traditional kidney bean varieties.

14

See for example efforts by Navdanya, and the International Art of

Living Foundation, accessed November 17, 2014.

13



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7 Conclusions & Recommendations: Leveling the Incentives Landscape to. . .



especially yields of traditional pulses varieties is in any way linked to the presence

of residues of chemical fertilizers from the harvest of the preferred crops, appears

necessary.

Furthermore, as discussed in Chap. 4 above, scientists such as Albert Howard

conducted extensive agricultural research in India and found that traditional soil

management practices were the most effective means of increasing crop yields. In

examples cited by him, yields higher than those currently achieved by chemical

inputs were recorded. Although this knowledge was lost following the wide spread

adoption of the Green Revolution seeds, it is necessary to revive agricultural

research into these areas in order to find sustainable alternatives to hybrid and

chemical input intensive agriculture. A larger amount of government resources

ought to be given for such research than for research that already has substantial

private sector contribution.



7.3

7.3.1



The Way Forward

Implementing ‘Soft Law’ Contained in International

Agreements



It is noteworthy that the definition of green technologies corresponds to that of

‘environmentally sound technologies’ given in Chapter 34 of Agenda 21 (The

United Nations Programme of Action from Rio, 1992), which reads as follows:

Green technologies “protect the environment, are less polluting, use all resources in

a more sustainable manner, recycle more of their wastes and products, and handle

residual waste in a more acceptable manner than the technologies for which they

were substitutes.”15 Promoting technologies that promote agrobiodiversity conservation and in situ agrobiodiversity evolution, while eliminating or minimizing the

needs for chemical inputs would fall within the definition of a ‘green technology.’

However, biodiversity conservation in general, and agrobiodiversity conservation

in particular, receives significantly lower international attention, when compared to

issues concerning carbon emission regulations and climate change.16

The flexibilities within agreements such as the CBD, which make it function like

a soft law disguised as a hard law, are indeed desirable.17 This is not least because a

country, and more importantly, communities engaged in the protection of




l¼e>. Also see .

16

Stuart R. Harrop and Diana J. Pritchard, ‘A Hard Instrument Goes Soft,’ 475.

17

Experts have opined that it is there flexibilities that make these conventions and treaties widely

acceptable. Ibid., 476.

15



7.3 The Way Forward



247



agrobiodiversity have a right, as they have had for millennia, to determine the best

means of doing so. Nonetheless, it is necessary to educate farmers, RAEOs, NGOs,

the public sector and the private sector alike regarding the value and urgent need to

promote sustainable innovations in plant varieties in order for each stakeholder to

think of means to promote agrobiodiversity conservation while increasing crop

yields.

In this regard, it is necessary, as stated above, to conduct more in depth multidisciplinary inquiries into the following issues:

1. The effect that existing agricultural subsidies (especially those for seeds and

chemical supplements) have on informal innovations in the seed sector; and

2. Designing an appropriate regime for taxation of seed industries that promote the

adoption of chemical intensive farming and/or contribute to the depletion of

agrobiodiversity, inter alia, by designing seeds that cannot be saved and

improved upon by farmers.



7.3.2



‘Fundamental Extension in Morality’ as a Means

of Promoting Sustainable Innovations in Plant

Varieties



In the late 1950s, Garett Hardin’s ‘Tragedy of the Commons,’ made an important

observation that was, perhaps almost ironically, overshadowed by the very title of

this seminal work: Concerned about the rapidly growing global population, Hardin

noted that the ‘problem has no technical solution; it requires a fundamental extension in morality.’ Ignoring the issue of ‘morality’ and how it can be ‘extended’,

Hardin’s work is primarily known and further researched for highlighting the

‘tragedy of the commons’ and suggesting the creation of private property rights

as a means of solving or avoiding the rapid, systematic, and even inevitable

depletion of resources available for ‘common’ use.

Hardin’s theory admittedly has limited applicability in the context of

agrobiodiversity depletion. Although seeds that comprise individual but significant

units of agrobiodiversity, have been considered a ‘common heritage of mankind’

they do not fall within the definition of ‘common property resources (CPRs).’

Further we have seen through this study that privatization efforts are not the

appropriate solution to the problem of depleting agrobiodiversity. Unlike CPRs,

where over-use by all beneficiaries is the central problem, in the case of seeds, the

current problem of agrobiodiversity depletion has resulted not from the over

utilization of agrobiodiversity that is owned by the commons, but by its increasing

under- and non-utilization. Yet, Hardin’s observation that certain problems ‘require

a fundamental extension in morality’ is true not just for addressing the population

(or CPR) problem, but also for addressing the issue of promoting sustainable



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7 Conclusions & Recommendations: Leveling the Incentives Landscape to. . .



innovations in plant varieties. Therefore, beyond the government, the private sector,

the farmers and the NGOs, it is also up to each individual to demand sustainable

innovations and sustainable agricultural practices by modifying their purchase and

consumption habits appropriately. Demand guides supply. An informed and conscientious demand would lead to a more responsible and conscientious supply.



Annex 1: Research Methodology—Overview

of Research Methodology and Objectives



For students and researchers interested in the understanding and critiquing the

research methodology that was followed to conduct the studies leading to this

book, this Annex has been included as part of this book. This Annex is divided

into four main sections: Section 1.1 first describes the basic reasons for choosing a

multidisciplinary and mixed method research design. It then details the reasons for

adopting a specific mixed method design for this study, including the research

mixing rationale and purpose. Section 1.2 describes the broad research goal and

objectives of this study. Section 1.3 provides an overview of the research rationale,

which constitutes the reasons for selecting the broad and delimited objectives/scope

of this study. Section 1.4 provides a list of the preliminary research questions that

guided the literature review as well as the qualitative and quantitative investigations

undertaken during the course of this study.



1.1



Mixed-Methods Research Approach



Although the call to make legal research an inter-disciplinary endeavor is by no

means a new one,1 the increasing interest2 in finding solutions to essentially legal

issues using a multi-disciplinary approach has received mixed reactions: Renowned

scholars consider a multi-disciplinary approach to law and legal analysis as being



1

See Oliver Wendell Holmes, Jr., ‘The Path of the Law’ (1897) 10 Harvard Law Review 457, 469,

where Judge Holmes of the US Supreme Court famously stated as far back as in 1897, that: “[f]or

the rational study of the law the black-letter man may be the man of the present, but the man of the

future is the man of statistics and the master of economics.”

2

Julia Brannen, ‘Mixed Methods Research: A Discussion Paper’ (ESRC National Centre for

Research Methods - NCRM Methods Review Papers - NCRM/005) 4
uk/89/1/MethodsReviewPaperNCRM-005.pdf> accessed 21.10.13.



© Springer-Verlag Berlin Heidelberg 2016

M. Kochupillai, Promoting Sustainable Innovations in Plant Varieties, Munich

Studies on Innovation and Competition 5, DOI 10.1007/978-3-662-52796-2



249



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