There has been some debate about whether certain products will cease to be available in the UK market in the event of a no-deal Brexit. It remains unclear whether this would in fact be the case – whether as a matter of practicality or politics. However, if products were to become unavailable, there has been some speculation that where those products are protected by patents or similar rights, companies and individuals in the UK may be able to make, use or dispose of such products by means of the compulsory licensing regime.

Historically, it has been very difficult to obtain a compulsory licence under patent law. More recently it has also proven to be a challenge in respect of other rights, as illustrated by the below case which was the first application for a compulsory licence in respect of Community Plant Variety Rights (“CPVR“).

Background

Smith Kline Beecham Limited (then GSK) was granted a CPVR in July 2013 for the “Ben Starav” variety of blackcurrant species Ribes nigrium L.. The CPVR was subsequently transferred to Lucozade Ribena Suntory Limited (“LRS“). Ben Starav is used by LRS, in combination with other blackcurrant varieties, to produce the well-known branded soft drink “Ribena”.

Pixley Berries (Juice) Ltd (“Pixley“) is a UK company which specialises in processing fruit, including blackcurrants. It is an ingredients suppler of not from concentrate (“NFC“) juice to packers, bottlers and consumer brands across Europe. Pixley’s fruit is grown at Pixley farm exclusively for Pixley.

Pixley had sought to obtain a contractual licence for variety Ben Starav from LRS without success for several years. In March 2017 Pixley applied to the Community Plant Variety Office (“CPVO“) for a compulsory licence in respect of the variety.

The legislation

Article 29 of Council Regulation (EC) No 2100/94 provides that the CPVO may grant compulsory licences on the grounds of public interest.

Article 41(2) of the Proceedings Regulation (of Commission Regulation (EC) No 874/2009) provides three (non-exhaustive) circumstances which may constitute a public interest:

  1. the protection of life or health of humans, animals and plants;
  2. the need to supply the market with material offering specific features; or
  3. the need to maintain the incentive for continued breeding of improved varieties.

Pixley’s case

Pixley argued that the Ben Starav variety exhibited certain unique features, namely: i) a consistent high yield of good quality fruit; ii) harvest season not in conflict with other cultivars; iii) even ripening at harvest; iv) even bud-break across a range of winters; v) good juice quality from an organoleptic point of view; vi) good compositional analysis; and vii) excellent colour.

Given that Ben Starav was only used by LRS to produce the soft drink Ribena, and was not available to the wider juice drink market (including the NFC juice sub-market), Pixley argued under ground b) above that Ben Starav’s unique characteristics (chiefly, its organoleptic properties and adaptability across a range of environments, which Pixley asserted made Ben Starav resistant to climate change), meant that there was a need to supply the market with Ben Starav, and as such, there was a public interest in granting a compulsory licence.

Pixley also asserted that there was a public interest under ground a) above based on the health benefits which would be derived from using Ben Starav for NFC juices associated with a healthy lifestyle.

Finally, Ben Starav had been bred using partial public funding, which Pixley argued demonstrated a further public interest in granting a compulsory licence.

The decision

The CPVO rejected Pixley’s application for a compulsory licence on the following basis:

  • Compulsory licences can only be granted on grounds of public interest, dependent on the facts, balance of interests between the rights holder and the applicant, and proportionality.
  • CPVR rights should only be eroded by the granting of compulsory licences, where there is a genuine public interest, distinct from Pixley’s private commercial interests in using a variety which would offer premium characteristics, for which they would be able to charge a premium price.
  • Whilst it was acknowledged that Ben Starav exhibited desirable characteristics, the CVPO accepted LRS’ arguments that these characteristics were not unique to Ben Starav, and that alternative varieties existed and were available in the market. As such, Pixley had failed to demonstrate that there was a need for the market to be supplied with Ben Starav under ground b).
  • Pixley had also failed to demonstrate there was a benefit to public health: the health benefits associated with drinking NFCs as part of a healthy lifestyle were not dependent on the availability of Ben Starav.
  • The fact that Ben Starav had been developed with some public funding was irrelevant: it was for national authorities to determine whether the results of publicly-funded plant variety research should be protectable by private CPVRs or not. The source of funding for a variety protected by a CPVR was not to be taken into account in determining whether to grant a compulsory licence.

Commentary

In addition to the finding on the public funding point, this case is particularly interesting in that the CPVO took guidance from both patent law and competition law in determining the relevant market and taking the existence of alternative or substitute varieties into account. This may suggest that future applications may be determined using other guidance from these related fields, and that obtaining a compulsory licence is likely continue to be difficult, regardless of the nature of the intellectual property right in question.   It is noteworthy that it was suggested that a case about a variety containing unique gene resistance to a new and devastating plant disease with implications for threatening security might have a much better case for the grant of a compulsory licence.  That shows how high the hurdle might to be to be successful in the grant of a compulsory licence, at least in the agricultural or food sectors.

Given this, it appears that reliance on the compulsory licence regime is very unlikely to be a viable means of procuring the rights to produce in the UK in the event of a no-deal Brexit and any alleged shortages of certain vegetables, fruits or flowers.

Joel Smith
Joel Smith
Partner, Head of Intellectual Property UK, London
+44 20 7466 2331
Laura Adde
Laura Adde
Associate, London
+44 20 7466 7491