BACKGROUND TO SECTION 18
30 Although Australia did not subscribe to the 1991 International Convention for the Protection of New Varieties of Plants until 1999, it enacted the Plant Breeder's Act in light of that Convention. A copy of the English text is set out in the schedule to the Plant Breeder's Act. By Article 30 of the Convention, each Contracting Party agreed to adopt all measures necessary for the implementation of the Convention. In particular, each Contracting Party was required to provide for appropriate legal remedies for the effective enforcement of PBR and it was understood that, on depositing its instrument of ratification, acceptance, approval or accession of, or to, the Convention, each Contracting Party was to be in a position, under its laws, to give effect to the provisions of the Convention.
31 Chapter V of the Convention deals with 'THE RIGHTS OF THE BREEDER' and contains Articles 14 to 19 inclusive, the substance of which is enacted in the provisions of Part 2 in the Plant Breeder's Act. Part 2 of the Plant Breeder's Act, which is headed 'Plant Breeder's Right', consists of ss 11 to 23 inclusive. Each of ss 11 to 23, apart from s 18, can be seen to be based on one or other of Articles 14 to 19 of the Convention. Curiously, s 18 has no counterpart in the Convention, but appears to have been enacted for a reason other than to give effect to the terms of the Convention. Interestingly, although irrelevantly for present purposes, s 18 was repealed by the Plant Breeder's Right Amendment Act 2002 (Cth).
32 Section 18 had a precursor in s 38 of the Plant Variety Act. Thus, s 38(1) relevantly provided as follows:
'Notwithstanding that plant variety rights subsist in respect of a plant variety, any person may:
(a) …
(b) sell plants of that variety for use as food or for another use that does not involve the growing of the plants or the production of plants of that variety;
(c) sell reproductive material of plants of that variety for use as food or for another use that does not involve the production of plants of that variety; [Emphasis added]
…'
33 The source of the exception constituted by s 38 is by no means clear. It may be that s 38 was introduced to pacify rural and other interests who would be concerned at the possibility that the grantee of PBR would be in a position to impose end point royalties in relation to food or food ingredients.
34 The explanatory memorandum circulated in connection with the Bill for the Plant Variety Act contained an outline that relevantly said:
'The Plant Variety Rights Bill is based on the following principles:
…
· Nothing in this Bill will prevent the retention of seed of protected varieties for sowing of crops or sale for human and animal consumption. Protected varieties will also be freely available for research purposes and to plant breeders for use in breeding programmes (sic).'
The body of the explanatory memorandum said as follows, in relation to clause 38, which became s 38 of the Plant Variety Act:
'Specifies purposes for which registered varieties may be grown or sold without infringing the rights. The Bill does not preclude the retention of plants or reproductive material for own use. Protected varieties may also be used for research or breeding purposes but not in the commercial production of hybrid varieties. The aim of this clause is to make clear that the legislation is not intending to restrict traditional farming or home garden practices whereby seed or other reproductive material is retained for production of a subsequent crop.'
That comment is headed 'Plant variety rights not to restrict sales for food, fibre, fuel, etc.', although there is no mention of food, fibre or fuel in the body of s 38.
35 In his speech on the second reading of the Bill for the Plant Variety Act, the relevant Minister said:
'Rights granted under the legislation will not extend to sale of plants with land, of reproductive material of plants as food, fibre or fuel. This will mean, for example, that a right granted over a variety of wheat will not extend to the use of that variety for bread making. Provision is made for compulsory licensing of plant varieties by the secretary to the department administering the scheme should the reasonable requirements of the public with respect to the plant variety not be satisfied by the grantee.'
The latter comment by the Minister is a reference to the provision that became s 39 of the Plant Variety Act, which was the precursor of s 19 of the Plant Breeder's Act.
36 Under s 19(1) of the Plant Breeder's Act, the grantee of PBR in a plant variety must take all reasonable steps to ensure reasonable public access to that plant variety. Reasonable public access is taken to be satisfied if propagating material of reasonable quality is available to the public at reasonable prices, or as gifts to the public, in sufficient quantities to meet demand. Under s 19(3), the Secretary of the relevant Department is authorised to license a person whom the Secretary considers appropriate to sell propagating material of plants of a plant variety covered by PBR or to produce propagating material of plants of that variety for sale during such period as the Secretary considers appropriate and on such terms and conditions, including the provision of reasonable remuneration to the grantee of the PBR, as the Secretary considers would be granted by the grantee in the normal course of business.
37 Between August and September 1990, a study was undertaken by Dr Noel Byrne of Queen Mary and Westfield College, University of London, pursuant to arrangements made with the Commonwealth Ministers for Primary Industries and Energy and Industry, Technology and Commerce. The study concerned the legal protection for plants in Australia under patent and plant variety rights legislation. In his report of 7 November 1990, Dr Byrne referred to s 38 of the Plant Variety Act as 'the farmer's exemption' and recommended that the farmer's exemption in s 38(1) should be reviewed in the near future. Dr Byrne characterised the farmer's exemption as relating to 'farm saved seed'. That, of course, is not a specific subject of s 38 of the Plant Variety Act, which does not refer in terms to farm saved seed or other language similar to that found in s 17 of the Plant Breeder's Act. The epithet 'the farmers exemption', however, may provide a hint as to the political source of the exemption contained in s 38, as re-enacted in s 18 of the Plant Breeder's Act.
38 The explanatory memorandum circulated with the Bill for the Plant Breeder's Act contained an outline of the Bill. The outline relevantly stated:
'The Bill provides for, subject to certain defined exemptions and extensions, the grant of an exclusive right to the following acts of exploitation of the propagating material of new varieties… [the paragraphs of s 11 then follow].
The outline makes no mention of the food exemption. However, the commentary in the body of the explanatory memorandum says that clause 18 '[p]rovides that the breeder's rights are not infringed when propagating material is used as a food, food ingredient or fuel or for any other purpose not leading to or involving the production or reproduction of propagating material.'
39 In his speech on the second reading of the Bill for the Plant Breeder's Act, the relevant Minister made no reference to the food exemption, although he referred to an exhaustive inquiry in 1986 by the Senate Standing Committee on Natural Resources in relation to plant breeder's rights and observed that the Senate Standing Committee on Rural and Regional Affairs was of the view that the Bill was not a major departure from the Plant Variety Act. The aim of rewriting and renaming the legislation was said to be principally to conform to the 1991 revision of the Convention.
APPLICATION OF S 18 IN THE CIRCUMSTANCES OF THE PRESENT CASE.
40 Section 18 is predicated on there being an act referred to in s 11 in relation to propagating material of a plant variety in respect of which PBR subsists. Its effect is that, if that act satisfies the description in s 18(1)(a) and s 18(1)(b) then, notwithstanding that the act is one the exclusive right to do which is comprised in the PBR, the act will not infringe the PBR. Section 53 of the Plant Breeder's Act provides that, subject to ss 16, 17, 18, 19 and 23, PBR in a plant variety is, relevantly, infringed by a person doing, without authorisation from the grantee of the right, an act referred to in a paragraph of s 11 in respect of the variety.
41 The acts complained of by Tasmania and Cultivaust are acts referred to in s 11 that were done in relation to the propagating material of plants of the Franklin barley variety. Section 18(1)(a) is therefore satisfied. The critical provision is s 18(1)(b). That is to say, the question is whether any of the acts complained of, each of which is referred to in s 11, constitutes an act 'that enables the use of [Franklin barley] as a food, food ingredient or fuel', or, alternatively, whether any such act is an act 'that enables the use of [Franklin barley]… for any… purpose that does not involve the production or reproduction of the [Franklin barley]'.
42 The first argument raised by Cultivaust is whether the Grain Pool, by offering Franklin barley for sale, selling Franklin barley, exporting Franklin barley or stocking Franklin barley for one of those three purposes, enabled the use of that Franklin barley as a food or food ingredient: that is to say, whether the word 'enables' in s 18(1)(b) has any significance. The word 'enables' did not appear in s 38 of the Plant Variety Act and that suggests that no particular significance should be attached to it.
43 The word 'enable' may be taken to mean 'make possible' or 'give the means for' (see Shorter Oxford and Macquarie Dictionaries). Certainly, after the Grain Pool sold or exported Franklin barley, that Franklin barley was used as a food or food ingredient. However, the mere offering of Franklin barley for sale or the stocking of Franklin barley for any of the three purposes, did not, of itself, make possible, or give the means for, the use of that Franklin barley as a food or food ingredient. In one sense, while the sale or export of the Franklin barley by the Grain Pool enabled the buyer to use the Franklin Barley as a food or food ingredient, the Franklin barley could equally well have been used by the Grain Pool as a food or food ingredient. That is to say, the relevant acts of the Grain Pool did not in any sense make the Franklin barley better able to be used as a food or food ingredient. It is not a case of post hoc ergo propter hoc.
44 If the Grain Pool undertook the conditioning of Franklin barley, within the meaning of that term as defined in s 3(1), one could readily conclude that that act of conditioning might enable the use of that Franklin barley as a food or food ingredient. That is to say, the act would involve, cleaning, coating, sorting, packaging or grading of the Franklin barley, or other similar treatment, for the purpose of preparing the Franklin barley for propagation or sale. However, it is only conditioning for propagation that constitutes an act referred to in s 11. As indicated above, conditioning for sale is not an act referred to in s 11.
45 Having regard to the fact that s 18 was not intended to change the substance of s 38 of the Plant Variety Act, the better view is that 'enables' is to be given no particular significance. It does not mean that there must be some causal link between the act and the Franklin barley becoming capable of use as a food or food ingredient. Rather, it means simply that an act referred to in s 11, which is done in relation to Franklin barley, such as sale or export, is followed by the use of the Franklin barley as a food or food ingredient. Understood in that way, s 18(1)(b) was satisfied in relation to the Franklin barley sold, offered for sale, exported or stocked for those purposes, by the Grain Pool.
46 Another argument advanced on behalf of Cultivaust and Tasmania involves the interplay between s 14 and s 18. Cultivaust says that s 18 does not apply to harvested material in relation to which s 11 operates pursuant to s 14(1) as if it were propagating material. Rather, Cultivaust says, harvested material in s 14, and products from harvested material in s 15, are treated as separate and different from propagating material and it is only the latter that is the subject of s 18.
47 Sections 14 and 15 have a deeming effect. That is to say, s 11 operates in relation to harvested material as though it were propagating material, even though the harvested material is not in fact propagating material. However, the deeming effect operates only if the three prerequisites are satisfied. Even so, the deeming effect is qualified by the operation of s 14(2), which depends upon the operation of s 17(1).
48 Section 17 operates to provide an excuse to a farmer in circumstances where, but for the operation of s 17, an act of the farmer referred to in paragraph (a) or (b) of s 11 would be an infringement of PBR. Thus, relevantly for present purposes, where a farmer in Western Australia, who had legitimately obtained Franklin barley from Cultivaust, harvested the crop from the planting of that Franklin barley, the farmer could condition the crop for the farmer's use for reproductive purposes and could reproduce further Franklin barley. The harvested material, in so far as it was required by the farmer for the farmer's own use for reproductive purposes, would not be subject to the deeming operation of s 14(1). That is the effect of s 14(2).
49 Cultivaust contends that the policy evinced by ss 17 and 14 is to provide an exception for farmers, in the using of propagating material or seed retained from a crop, for the purpose of replanting and reproducing. Cultivaust contends that s 18 operates only in relation to that propagating material or seed. Cultivaust says that Franklin barley produced from second generation crops in Western Australia, grown from farm seed saved under s 17 of the Plant Breeder's Act, is 'harvested material' within s 14. It says that the general exemption from infringement in s 18 does not apply to harvested material referred to in s 14. Cultivaust points to the fact that s 18 is limited to acts done in relation to the propagating material of plants of that variety. Because the harvested Franklin barley is treated as harvested material, it is not to be regarded, for the purposes of s 18, as propagating material.
50 Harvested material is assumed, by s 14, not to be propagating material otherwise the deeming effect of s 14 would be unnecessary. That is to say, harvested material is not limited to the reproductive part of a plant. Once Franklin barley is harvested, it is to be treated no longer as propagating material, but as harvested material. Notwithstanding that, having regard to the nature of grains, the harvested material is in fact propagating material, the policy evinced by s 14 is to treat harvested material as being something different from propagating material. Once the harvested Franklin barley is treated as harvested material, assumed by definition not to be propagating material, it is to be treated, for all purposes, including s 18, as not being propagating material.
51 Cultivaust contends that such a construction is consistent with the purpose of enabling the grantee of PBR to exercise that right by imposing an end point royalty. That object would be undermined, so Cultivaust says, by the alternative construction. The alternative construction is that harvested material is to be treated as propagating material for the purposes of s 18. Cultivaust says that, if farmers continue to sell propagating material for purposes other than production and reproduction, the grantee of the PBR would be precluded from obtaining any commercial benefit from the PBR.
52 Cultivaust also points to the provisions of s 18(1)(b)(ii), which would excuse any act that enabled the use of Franklin barley for any purpose that did not involve the production or reproduction of the propagating material. It says that that criterion is premised upon the assumption that the production or reproduction of the propagating material has occurred with the authorisation of the grantee of the PBR. Sections 14 and 15, on the other hand, operate only where propagation has occurred without the authorisation of the grantee, in reliance upon the farm saved seed exception is s 17.
53 Cultivaust's argument ignores the extent of the operation of the Plant Breeder's Act. For whatever reason, the Parliament clearly intended that s 18 would have an effect in relation to food or food ingredients. In relation to a plant variety such as Franklin barley, where the harvested material is also propagating material, s 18 constitutes a very significant derogation from PBR. However, there are other plant varieties that are of different character. Examples would be grapes, apricots and the like, where the harvested material is something other than the propagating material. Section 18 would not have such a significant operation in relation to plant varieties of that character. It is only where the propagating material itself is used as food or food ingredient that the exception under s 18 operates.
54 Finally, Cultivaust points out that Article 15 of the Convention, on which s 17 is based, would be more faithfully implemented by limiting the operation of s 18 in the way contended for. Article 15(2), which is expressed by the Convention as an optional exception, provides that contracting parties may, within reasonable limits, restrict a plant breeder's right in relation to any variety in order to permit farmers to use, for propagating purposes on their own holdings, the product of the harvest that they have obtained by planting the protected variety on their own holdings. However, that contention ignores the indisputable historical fact that s 18 was inserted by the Parliament as an additional exception that was not contemplated by the Convention.
55 It follows that s 18 had the effect that the acts of the Grain Pool about which Cultivaust complains did not infringe Tasmania's PBR in Franklin Barley. In view of that conclusion concerning the operation of s 18, it is not necessary to express any opinion on the operation of s 23(1). While that provision might have been of significance in relation to a claim against a producer of Franklin barley, it would have no application to the Grain Pool, in circumstances where the acts referred to in s 11 engaged in by the Grain Pool did not involve 'further production or reproduction' of Franklin barley. The primary judge dealt with s 23 in a manner in that appears to be unexceptionable.
56 In dealing with s 14 of the Plant Breeder's Act the primary judge considered the meaning of s 14(1)(b), which is in the same terms as s 15(1)(b). The primary judge, in dealing with whether Tasmania had a 'reasonable opportunity to exercise the grantee's right in relation to Franklin barley produced or reproduced without its authorisation', the primary judge characterised Tasmania's 'rights'[sic]as 'exclusive, but negative' and said that the exercise of 'those rights' [sic] involved, if necessary, action under s 54 of the Plant Breeder's Act. However, s 54 simply provides that that an action for an infringement of PBR in a plant variety may be begun in the Federal Court.
57 His Honour's characterisation may involve a confusion of the concept of exercising the right that constitutes PBR with the concept of enforcing rights that arise under the Plant Breeder's Act by reason of infringement of the right, conferred by the Plant Breeder's Act, that constitutes PBR. That is to say, if s 14(1) be relevant, the primary judge may have misconstrued s 14(1)(b) in failing to distinguish between the grantee's right under s 11 and the secondary rights that arise by reason of infringement of that right, as provided for in s 53(1). In the light of the conclusion reached above, it is unnecessary to resolve that question but it should not be thought that his Honour's view of ss 15(1)(b) and 16(1)(b) would necessarily be endorsed if the question arises in the future.