Agriculture Royalties

July 15, 2016


Technology licensing in the form of patents, trademarks and trade secrets is as important a source of revenue for the agriculture industry as for any, but agriculture has unique access to an additional type of intellectual property in the ability to own varieties of plants. Two types of protection are available for developers of plants: the plant patent and the Plant Variety Protection Act (PVPA) Certificate of Protection.

Plant Patents

Plant varieties that have been developed asexually (e.g. grafting or genetic methods) qualify for a plant patent, granted by the USPTO. These plants must satisfy the general requirements of patentability and are given the same protection as all patented technology. Since asexually reproduced plants are clones, the patent is only valid for one genome.

PVPA Certificates

Plant varieties that have been developed sexually (through traditional breeding) or are tubers qualify for PVPA protection. A Certificate of Protection is granted by the Plant Variety Protection Office of the USDA and provides rights similar to those a patent provides, excluding all but the certificate holder from selling, advertising for sale, importing, exporting, breeding or using the protected variety. Licensees of PVPA-protected seed can save seed for replanting, but cannot share the seed with others without permission of the certificate holder.

Developers with PVPA protected plants have two options for protection: they may sell both certified and uncertified seed, prosecuting violators independently, or; they may sell certified seed only, making uncertified use of their seed illegal at the federal and state levels as well as subject to civil suit from the certificate holder. Most certificate holders choose the latter option. PVPA certificates are valid for 20 years after being granted.

Plant Variety Licensing

Both plant patent and PVPA protection rights may be licensed to growers who wish to use protected plants. Payments can be in the form of up-front fees, royalties or a combination of the two. Plant variety licenses have many details due to the specificity of the right granted -- to one genome only. It is important to note whether the license is exclusive or non-exclusive and whether it covers all plants made as hybrids with or mutants of the protected variety.

As in all technology licensing, plant variety rights are often licensed in conjunction with other forms of intellectual property.  A common example of a bundled right is the trademark on the variety's name.

Related Articles

The Plant Variety Protection Act

Primer on Plant Variety Protection

USPTO Introduction to Plant Patents

IP Handbook: Licensing Agreements in Agricultural Biotechnology


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