Review end point royalties to improve compliance with PBR licensing

Issue summary

An end-point royalty (EPR) system is a mechanism where a licensed crop grower pays a royalty to the owner of the Plant Breeder's Right (PBR) based on production yield rather than a set fee. EPRs are intended to promote risk sharing and provide incentives to breed high-quality high-yield varieties. In its 2010 review of PBR enforcement, the former Advisory Council on IP (ACIP) noted that EPR arrangements in Australia are becoming increasingly accepted by industry, but that there may be issues with non-compliance and cost-effectiveness. ACIP recommended that the end-point royalty system be reviewed, and the government accepted the recommendation in June 2011.

Comments

The Productivity Commission in its 2016 review of Australia's IP arrangements considered end point royalties. As well as submissions from stakeholders, the Commission had regard to the work done by the former Plant Breeder's Rights Advisory Council on the issue. The Commission's findings are on pages 425-429 of its report. While it made no formal recommendations, the Commission proposed the following further courses of action:

• IP Australia should continue to monitor developments in relation to the UK Information Notice Scheme, and with the new Plant Breeder's Rights Consultative Group consider whether such a scheme would be appropriate for Australia
• Australia should not introduce a purchase right for PBR
• There is scope to increase use and efficiency of end-point royalties, but the Commission considers that this is best done as an industry-led initiative through closer cooperation and promoting awareness of the PBR system. IP Australia could play a supporting role in this.

The Commission's review therefore completes the government's commitment to review end point royalties. IP Australia will work with the newly formed Plant Breeder's Rights Consultative Group on the further action proposed by the Commission, including education and awareness of end point royalties.