Tuesday, March 28, 2017

Agricultural Law in the Spotlight: Understanding Legal Protections and Potential Liabilities Associated with Seed Use in Pennsylvania

Written by Ross Pifer and M. Sean High

With the calendar marking the start of spring, much of Pennsylvania’s agricultural industry has turned its attention to the upcoming planting season.  As they do each year, farmers are making decisions about the varieties of seed that they will be purchasing as well as where they will be purchasing this seed.  In making these important decisions, farmers should be aware that there are several laws – at both the state and federal level – addressing their purchase and use of seed.

This article will discuss the Pennsylvania Seed Act, federal patent law, and the federal Plant Variety Protection Act.  These laws provide some protections for farmers, but they also subject farmers to potential liability where seed is misused in violation of applicable intellectual property rights.  Farmers need to be aware that they may be opening a door to legal liability unknowingly through their seed purchasing decisions.  How can farmers protect themselves from potential liability?  Farmers simply should look for, and read, the label or tag on the seed package or container.  By doing so, farmers can ensure themselves that they are purchasing quality seed and that the intended use of the seed will not violate intellectual property rights conferred by federal law.    

In Pennsylvania, all seed sales are regulated by Act 164 of 2005, also known as the Pennsylvania Seed Act.  Under the Seed Act, all seed distributors must obtain an annual license from the Pennsylvania Department of Agriculture and perform certain testing to ensure the quality of the seed that is being sold.  In the retail market, the Seed Act requires that all packages or containers of seed have a label that includes the name and address of the distributor, the lot number, information about the purity and germination testing of the seed, and other data depending on the specific type of seed.  In addition to potentially decreasing yields by planting seeds with an inferior germination ratio, farmers who buy unlabeled seed risk introducing unwanted weeds into their fields.  If any seed is sold in Pennsylvania without a valid label, that seed has been sold illegally.      

While proper labeling of seed is required under Pennsylvania law, seed labels often also fulfill another practical purpose by indicating to farmers whether the seed is subject to any intellectual property protections – through either patent law or the Plant Variety Protection Act.  According to the Plant Variety Protection Office within the United States Department of Agriculture (USDA), the development of new and improved plant varieties is necessary to “promote agriculture production and food security for an increasing world population.”  To encourage this development, federal law provides seed companies with significant legal protections for the intellectual property contained within the plant varieties they create.  Farmers must be aware of these protections as they face potentially severe legal consequences if they infringe upon these intellectual property rights.    

Seed companies often seek patent protection from the U.S. Patent and Trademark Office when a new seed variety is developed.  A patent provides a seed company with the exclusive right to the use of a plant variety for twenty years.  Thus, patented seed can be used only in the manner authorized by the patent holder.  Any unauthorized sale or use of the patented seed is prohibited for the duration of the patent.  A farmer or merchant who violates a patent through some unlawful action, such as the planting or selling of harvested seeds, may face a patent infringement lawsuit filed by the seed company.  As a result of this litigation, a farmer may bear significant legal costs to defend against the lawsuit in addition to the financial liability imposed if the seed company successfully establishes a violation of its patent rights.

The second type of intellectual property rights of which farmers should be familiar is provided through the Plant Variety Protection Act (PVPA).  PVPA is a federal law administered by USDA that operates similarly to a patent and provides seed companies with a twenty-year certificate to control the purchase or sale of a plant variety.  Farmers violate PVPA when they sell, purchase, offer for sale, deliver, or exchange PVPA certified seeds.  PVPA does provide a narrow exception for farmers who lawfully purchase certified seeds.  In such cases, seeds may be saved and replanted on the farmer’s property, but only in an area no larger than that which was previously planted.  Just as with the violation of patent rights, a violation of PVPA may result in a farmer suffering substantial financial penalties and costly litigation.  Significantly, courts have determined that selling seed in an unmarked bag, a practice commonly known as a “brown bag sale,” can constitute a violation of PVPA.     

When farmers make their purchasing decisions, they need to be aware of the relevant legal protections and responsibilities, including those associated with patented and protected seed, to ensure that they are receiving a quality product and that they are not subjecting themselves to potential financial liability.  As a best practice, farmers should purchase seed only from a licensed seed distributor that properly labels its products.  Farmers then must use patented and protected seed only in the manner authorized by law or the holder of the intellectual property rights.   

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