A plant breeder’s right (PBR) under the Plant Breeder’s Rights Act 1994 (Cth) is an exclusive right to certain dealings with a plant variety based on it being a distinct, uniform and stable new plant variety for a limited term. This is extended to ‘harvested material’ and the products of ‘harvested material’ where the PBR owner has not authorised the production or reproduction of the PBR’ed variety and has not had a ‘reasonable opportunity’ to exercise their PBR. This report addresses the operation of the ‘harvested material’ and the products of ‘harvested material’ provisions in the Plant Breeder’s Rights Act 1994 (Cth). This report was prepared as part of a contract with IP Australia for ‘Research in respect of Plant Breeder’s Rights policy issues and presentation of an analytical report: C2022/10042’. This report delivers on that part of the contract about ‘Harvested Material’. The report includes a comprehensive review of the relevant negotiations, laws, practices, statutory schemes, judgements, policy reviews, academic and scholarly literature and IP Australia’s empirical materials about breeder’s rights. After that the report addresses the identified policy issues that might need further consideration and includes an analysis and recommendations. What is ‘harvested material’? (§5.1) The Plant Breeder’s Rights Act 1994 (Cth) PBR is extended to ‘harvested material’ and the products of ‘harvested material’ on two conditions: (1) the PBR owner has not authorised the production or reproduction of the PBR’ed variety; and (2) the PBR owner has not had a ‘reasonable opportunity’ to exercise their PBR. The meaning of ‘harvested material’ is uncertain where the ‘harvested material’ is also ‘propagating material’. For example, PBR’ed barley is harvested, is the harvested barley grain ‘harvested material’ that gets the PBR’s exclusive rights only when the conditions are satisfied, or is it also ‘propagating material’ per se and gets the PBR’s exclusive rights? Considering the possible complications and confusion tracking and tracing ‘propagating material’, the construction of the statutory provision in the Plant Breeder’s Rights Act 1994 (Cth) and the recent High Court decision in Calidad Pty Ltd v Seiko Epson Corporation where the majority decided in favour of the exhaustion doctrine (in place of the implied licence doctrine), then the Plant Breeder’s Rights Act 1994 (Cth) might be amended to make clear that ‘harvested material’ that is also ‘propagating material’ should be considered to be ‘propagating material’ per se. The recommendations reflect this conclusion and the consequential changes required. Recommendation 1 The Australian Government should amend the Plant Breeder’s Rights Act 1994 (Cth) to clarify that where ‘harvested material’ is also ‘propagating material’ then that material should be availed of the ‘exclusive rights’ available to ‘propagating material’ per se, without the need for the cascading to deem the ‘harvested material’ as ‘propagating material’ with the thresholds of ‘authorisation’ and a ‘reasonable opportunity’. This should involve: 1. Adding a note to the Plant Breeder’s Rights Act 1994 (Cth) s. 11. 2. Repealing the Plant Breeder’s Rights Act 1994 (Cth) s. 14(2). v Recommendation 2 The Australian Government should clarify that the exhaustion doctrine as articulated by the High Court in Calidad Pty Ltd v Seiko Epson Corporation applies to the Plant Breeder’s Rights Act 1994 (Cth). This is necessary to avoid the uncertainty that existed with the application of the implied licence doctrine, illustrated by the decisions in Cultivaust Pty Ltd v Grain Pool Pty Ltd. Recommendation 3 IP Australia should prepare explanatory materials to assist the PBR stakeholders, including small and medium enterprises, understanding the practical effects of these amendments. This might be explanatory materials, case studies, information sheets, and so on. Recommendation 4 The Australian Government should advocate at UPOV to amend the UPOV ‘harvested material’ explanatory note to clarify that ‘harvested material’ that is also ‘propagating material’ is to be considered ‘propagating material’ per se. The concept of ‘authorisation’ and ‘unauthorised use’ (§5.2) For the Plant Breeder’s Rights Act 1994 (Cth) PBR’s to be extended to ‘harvested material’ and the products of ‘harvested material’ the PBR owner must, in part, not have authorised the production or reproduction of the PBR’ed variety. The meaning of ‘authorisation’ (and ‘unauthorised use’ in UPOV 1991) is unclear and appears to be confined to authorising the PBR’s exclusive rights. This interpretation creates problems for PBR owners extending their PBRs to ‘harvested material’ and the products of ‘harvested material’, although this would be ameliorated by considering ‘harvested material’ that is also ‘propagating material’ as ‘propagating material’ per se. The Australian Government should advocate at UPOV to amend the ‘harvested material’ explanatory note clarifying that ‘unauthorised use’ means the broader permission of the PBR owner and not the more limited authorising the acts that would otherwise be infringement. This would then flow through to interpreting the Plant Breeder’s Rights Act 1994 (Cth). The recommendations reflect this conclusion and the consequential changes to address these conclusions. Recommendation 5 The Australian Government should advocate at UPOV to amend the UPOV ‘harvested material’ explanatory note to clarify that ‘unauthorised use’ means that the permission of the PBR owner has not been obtained for any use of the ‘propagating material’ for growing a harvest of ‘harvested material’ or the products of ‘harvested material’ rather than just authorising the acts of the PBR’s ‘exclusive rights’. Recommendation 6 IP Australia should prepare explanatory materials to assist the PBR stakeholders, including small and medium enterprises, understanding the practical effects of authorisation required for extending PBRs to ‘harvested material’ and products of ‘harvested material’. This might be case studies, information sheets, and so on. vi The concept of ‘reasonable opportunity’ (§5.3) The other requirement for the Plant Breeder’s Rights Act 1994 (Cth) PBR’s to extend to ‘harvested material’ and the products of ‘harvested material’ is that the PBR owner must not have had a ‘reasonable opportunity’ to exercise their PBR. The Advisory Council on Intellectual Property (ACIP) previously recommended that no changes be made to the current Plant Breeder’s Rights Act 1994 (Cth) and informally recommended information and education programs to enhance the education and awareness of PBR stakeholders. That position is endorsed with the acceptance of the exhaustion doctrine adopted by the High Court majority in Calidad Pty Ltd v Seiko Epson Corporation applies to the Plant Breeder’s Rights Act 1994 (Cth) and considering ‘harvested material’ that is also ‘propagating material’ as ‘propagating material’ per se. Recommendation 7 The Australian Government should make no changes to the the ‘reasonable opportunity’ threshold in the Plant Breeder’s Rights Act 1994 (Cth). Recommendation 8 IP Australia should prepare explanatory materials to assist the PBR stakeholders, including small and medium enterprises, understanding the practical effects of the ‘reasonable opportunity’ threshold. This might be explanatory materials, case studies, information sheets, and so on. A ‘purchase right’ (§5.4) A concern addressed by ACIP was the focus on the ‘exclusive rights’ that apply to ‘propagating material’ that did not necessarily suit the needs of all sectors, such as the grains and ornamental and horticultural sectors. There the value was in the plant materials harvested as grains, pot plants, cut flowers and fruits and forest products and collecting royalties at that stage was complicated. The concern here was not about the ‘harvested material’ also being ‘propagating material’, but rather that the ‘exclusive rights’ were focused on the ‘propagating material’ rather than the ‘harvested material’, and the existing extension of the ‘exclusive rights’ to ‘harvested material’ was not adequate. To address this problem, ACIP recommended a ‘purchase right’ whereby any purchasers would require a licence from the PBR owner that would clearly identify users and facilitate PBR owners obtaining royalties from users. This would only apply to taxa declared by the Plant Breeder’s Rights Regulations 1994 (Cth). The Australian Government rejected the ACIP recommendation considering contractbased ways for PBR owners to address their concerns. The exhaustion on first sale in the High Court majority in Calidad Pty Ltd v Seiko Epson Corporation perhaps corroborates the Australian Government’s response. In the alternative, however, this may have missed the point. A new ‘purchase right’ would address the specific and ongoing concern of the grains industry about transactions that are currently problematic including direct users of harvested grains such as on-farm storage by growers, feeding livestock on farm, processing plants, feed lots, millers, maltsters and ethanol producers, and the specific ongoing concerns of the ornamental and horticulture sectors about transactions that are currently problematic including the sale of pot plants, cut flowers and fruit. vii Recommendation 9 The Australian Government should amend the Plant Breeder’s Rights Act 1994 (Cth) s. 11 to include a ‘purchase right’ among the ‘exclusive rights’ of a PBR and this should only apply to taxa declared by the Plant Breeder’s Rights Regulations 1994 (Cth). Recommendation 10 IP Australia should prepare explanatory materials to assist the PBR stakeholders, including small and medium enterprises, understanding the practical effects of these amendments. This might be explanatory materials, case studies, information sheets, and so on.