Where Is Seed Industry Regulation Headed? An Analysis of Future Development Directions
Unifying the “Two Certificates” for Production and Operation Has “Two Benefits”
In this draft amendment to the Seed Law, the seed production license and the seed operation license are “unified into one certificate”, meaning an enterprise only needs to obtain one certificate——a seed production and operation license at its place of registration——to carry out seed production and operation in suitable locations.
The purpose of this change is, first, to reduce administrative licensing and reduce trouble for enterprises. For example, a corn seed operation enterprise that wants to produce seed in Zhangye, Gansu, can itself hold the production and operation license and go to the local area to rent land from farmers for seed production; it can also directly entrust a local seed production enterprise with seed production. This seed production enterprise does not need to first apply to the county or district seed management agency, and after approval go to the provincial seed administration bureau to obtain a license, saving a great deal of time. However, before producing seed, it should file a record with the county-level seed management agency in the place where it is located, that is, it must inform the local area of which township and which village in your county it is in, which enterprise it is entrusted by, and which variety and how large an area it will produce. An enterprise entrusted with seed production should present the letter of entrustment when filing the record. The purpose of such filing is to strengthen management of the seed production market.
Second, it facilitates control of unauthorized and excessive propagation. A purely seed production-type enterprise does not need to obtain a license, but to produce seed it must sign an entrusted production contract with an enterprise that has a production and operation license. If the seed producer itself does not have a production and operation license and also has no letter of entrustment, that is unauthorized and excessive propagation. The current Seed Law has comprehensive hardware requirements for applicants for production licenses, but the requirements on the source of the seed produced are not strict, requiring only that “an applicant applying to obtain a seed production license for a seed with plant variety rights shall obtain the written consent of the variety rights holder.” Some varieties without variety rights are easily subject to infringement through unauthorized and excessive propagation.
When the draft amendment to the Seed Law was soliciting opinions, some opinions were also raised about “unifying the two certificates.” One type was raised by seed enterprises, which held that with “unification of the two certificates,” they would still have to go to the seed production location to obtain a production and operation license, so would that not be even more troublesome? This is a misreading, a failure to carefully read the draft amendment. Another type of opinion was raised by seed management agencies, which held that not obtaining a seed production license increases the difficulty of management. For seed management agencies in key seed production counties and provinces, this reduces the power of review and licensing. The power is smaller, but the responsibility remains, and efforts should be focused on market regulation, investigating and handling unauthorized and excessive propagation, and cracking down on infringement and the passing off of counterfeit seed under another's name.
If this draft amendment is passed, the China Seed Association should produce and issue a standard sample letter of entrustment for seed production, with a unified format, so as to facilitate supervision and management.
Management Departments Should Act as “Watchers” of Production Safety
In recent years the order of the seed market for major crops has improved markedly, but it cannot be avoided that the order of the seed market for non-major crops, mainly vegetables, is not encouraging. Due to the lack of regulation, in the field of production and operation of seeds of non-major crops, the “broken window effect” of infringement, counterfeiting and lack of integrity is prominent. In production, the rate of seed quality accidents for non-major crops is far higher than that for major crops, and because these are cash crops, the losses caused by some vegetable seed quality accidents are far heavier than those for field crops. What is to be done? The key lies in improving laws and regulations, making up for the lack of regulation, and management departments needing to act as good “watchers.”
Therefore, this revision of the Seed Law proposes implementing a registration system for varieties of non-major crops, which is both a major change and a highlight. First, from the perspective of safeguarding production safety, protecting innovation and protecting farmers, there is no such thing as “major” and “non-major” crops. Seeds of major crops can cause production accidents, and so can seeds of non-major crops; variety innovation in major crops needs protection, and variety innovation in non-major crops also needs protection. Managing only varieties of major crops and paying no attention to varieties of non-major crops is an obvious defect. Second, from the perspective of reform of variety approval, this revision reduces the number of approved crops from 28 to 5, and at the same time implements registration management for varieties of non-major crops, effectively linking the two, and among the approved crops opens a green channel for enterprises integrating breeding, propagation and promotion, which is a positive and steady advancement of variety approval reform, and the direction of reform is self-evident.
However, implementing a registration system for varieties of non-major crops will face many difficulties. On the one hand, there are many kinds of non-major crops, and how to determine the catalogue of crops to be registered is a difficult problem. On the other hand, because they have not been managed and protected for many years, variety resources of non-major crops are generally held in common, and who should register these commonly held variety resources? In advancing registration work, there are several ideas:
First, highlight the key points and advance steadily. Registered crop varieties should highlight key points and be determined in batches. First include in the registration catalogue crop varieties withdrawn from approved varieties; then include crops with relatively high production technology requirements and relatively large seed operation risks; later gradually include crop varieties with relatively large production areas, close ties to people's lives, and obvious international competitive advantages.
Second, grasp the core and simplify the complex. The main purpose of registration is to understand variety information so as to facilitate market regulation. Adhere to the principle that the applicant is responsible for the filed information, and registration information should mainly consist of the variety-related information provided by the applicant (including DUS) and standard samples. After the registration application is accepted, it is only necessary to conduct rapid DNA testing and comparison on the standard samples, without adding other reviews, including designating third-party institutions to provide testing data, so as to avoid forming a “quasi-approval” and to avoid entangling registration with variety right protection.
Third, build platforms and strengthen services. Relevant functional institutions should promote the building of platforms to provide enterprises with testing services for resistance and economic traits of varieties of non-major crops, with enterprises participating voluntarily and market-based operation, to solve the problem of enterprises' insufficient own identification and testing capacity.
Fourth, link upper and lower levels and form a joint force. Registration work is broad in scope and large in volume, and faces new problems not encountered before. Coordination among functional institutions at all levels is crucial, especially the ministry and provincial levels, which must connect seamlessly and merge into a whole in order to advance registration work in an orderly and effective manner.
There Can Be No Accommodation of Intellectual Property Infringement
Compared with the current Seed Law, the draft revised Seed Law has already increased the penalties for illegal acts, but this is far from enough, and there is still some accommodation of intellectual property infringement and acts that deceive farmers. Problems arising from behavior in a market economy can only be corrected by severe legal punishment, and the law itself is also one of the elements of a market economy. Therefore, the key is to use the power of the market to punish violating enterprises and individuals. In the past, public security organs and judicial institutions in various places lacked a basis for enforcement; the cost of infringement for “seed industry hooligans” was extremely low, while the social cost for enterprises to defend their rights was extremely high. Enterprises lost enthusiasm for defending their rights, and such a situation cannot attract social capital to invest in the seed industry. Therefore, the enthusiasm for innovation of various enterprises and scientific research institutions has been declining more and more. This has seriously damaged the independent innovation capacity and healthy development of China's seed industry.
The current Seed Law provides only symbolic administrative penalties for infringement, the starting point for penalties is too low, and serious infringement involving the seed industry has not been criminalized, so it cannot play a deterrent role, resulting in the cost of infringement being too low while the cost for enterprises to defend their rights is too high. Relying only on administrative penalties is far from enough to protect intellectual property and protect enthusiasm for innovation.
It is necessary to persist in applying the principle of combining administrative penalties with compensation liability based on the commodity economy. The current revised version only provides for administrative penalties and does not provide for compensation liability. Only by combining administrative penalties with compensation liability can a deterrent effect be achieved. Moreover, when an enterprise's intellectual property is infringed, the infringing party should be required to bear criminal and economic compensation liability; only then can infringing and unlawful acts be deterred and enthusiasm for innovation be encouraged and protected. In addition, the starting point for administrative penalties should be high, so that people give up the idea of infringement. Compensation liability includes product research and development costs (breeding costs) + benefits expected to be obtainable in the market (potential benefits).
Laws protecting intellectual property must be operable. The current crux is that various places have no law to rely on in the enforcement process and no way to increase the intensity of penalties. Therefore, this time the content of Article 73 should be revised as a key point. National laws on intellectual property and property rights do not cover variety rights, so infringement of new plant variety rights cannot be criminalized. It is suggested that the revised Seed Law strengthen the provision of Article 91: “where criminal law is violated, it shall be tried in accordance with the Criminal Law.” Then, it is suggested that the Legislative Affairs Commission of the National People's Congress, when amending the Criminal Law, the Intellectual Property Protection Law, and the Property Law, include acts violating new variety rights in the Criminal Law, the Property Law and the Intellectual Property Protection Law. In this way, judicial organs in various places can apply existing legal provisions to try seed industry infringement cases.