Article 6 – Rights and Obligations of the Recipient

about 2 years ago
CLOSED: This discussion has concluded.

It is proposed that the following paragraphs be included in Article 6 of the Standard Material Transfer Agreement (SMTA) as penalties to address prohibited uses and intellectual property or other rights that limit the facilitated access to Material provided under the SMTA.

6.1bis

If the Recipient uses the Material for any of these prohibited uses, a lower court in the country of origin of the Material may, on presentation of prima facie evidence of such illegal use, award damages against the Recipient to the value of USD25 million or ten times the Recipient’s annual turnover, whichever is higher. The Recipient agrees that it shall not oppose enforcement of such damage by a competent court in the jurisdiction, where its main business identity is registered.

6.2bis

If the Recipient claims any such IP or other rights in contravention of this clause, a lower court in the country of origin of the Material may on presentation of prima facie evidence of such claims award damages against the Recipient to the value of USD25 million or ten times the Recipient’s annual turnover, whichever is higher, and declare the IP or other right forfeited to the country of origin.


What are you views on the above penalties?

If you find the penalty unsuitable, what may be a more appropriate penalty?

Note:

  1. Material means any material of plant origin, including reproductive and vegetative propagating material, containing functional units of heredity.
  2. Prohibited/illegal uses include chemical, pharmaceutical and/or other non-food/feed industrial uses.

Consultation has concluded

  • ASF about 2 years ago
    The Australian Seed Federation (ASF) is the peak industry body for the Australian seed industry and represents a range of breeding companies from large scale global corporate breeders to small family companies or individual breeders working just for the Australian market. The proposed amendments are completely unacceptable from a commercial point of view since the penalties proposed to be included in Article 6 of the Standard Material Transfer Agreement (SMTA) are excessively punitive. This is particularly so for small Australian breeders. Most of our members will choose not to access material from the Multilateral system under the proposed changes. On the one hand because of the excessive penalty amounts, but also because of the legal uncertainty that it would create. This will not only discourage the access and sustainable use of genetic resources but will also reduce funding for the Benefit Sharing Fund. Bill Fuller, CEO, ASF.
  • Boomerang about 2 years ago
    Such punitive enforcement regimes are not acceptable. Any claim for should only be based on the real and demonstrable loss.It is also highly unlikely that a court in the "Country of origin of the Material" would be able to enforce a claim against an Australian based business.
  • haveyoursaydfd about 2 years ago
    The aim of the IT is to promote the access and sustainable use of genetic resources, to ensure sustainable agriculture and food security. An excessively punitive enforcement regime will have the opposite effect; potential users will most likely choose not to use the resources because of the legal uncertainty these provisions would create and the costly legal procedures that may follow. To promote access and sustainable use, the SMTA should provide legal certainty and make business sense. Arie Baelde Private vegetable breeder
  • MrLupins about 2 years ago
    The penalties are ridiculously high. They indicate the drafter either has no real concept of the economics of the seed industry or simply does not want the proposal to work.Without reviewing TRIPS, the clauses are also likely to be unenforceable:1. in Australia and other countries, they would probably be ruled void as a "penalty", rather than a genuine pre-estimate of loss. 2. I doubt it is legal in many countries for the state to take the IP - a contract between private parties does not allow a third party (the State) to invalidate IP rights granted by the State. There wold need to be a breach of the patent/IP law of the State.I'm happy to discuss furtherregardsGeoff Budd