News Releases

DATE:	February 10, 2005
CONTACT:

Federal Register Notice/Volume 70, No. 7/Proposed Fee Increase

Dr. Paul Zankowski
Commissioner
PVP Office, Room 401
NAL Building
10301 Baltimore Avenue
Beltsville, MD 20705-2351

Dear Commissioner Zankowski:

Founded in 1883, the American Seed Trade Association (ASTA) is one of the oldest trade organizations in the United States. Its membership consists of about 850 companies involved in seed production and distribution, plant breeding, and related industries primarily in North America. As an authority on plant germplasm, ASTA advocates science and policy issues of importance to the seed industry. Its mission is to enhance the development and free movement of seed worldwide.

Intellectual property is the most important asset of the seed industry. Without intellectual property protection the seed industry would not exist as we know it today. Plant Variety Protection (PVP) is a most important component of the intellectual property system in the United States. Accordingly, many ASTA members apply for and are granted Plant Variety Protection Certificates.

ASTA provides the following comments with regard to the January 11, 2005 Federal Register Notice’s proposed rule to supplement fees for the Plant Variety Protection Office (PVPO).

The supplemental increases outlined in the Federal Register have been discussed by ASTA members and they have a number of concerns. These include the adverse impact of the proposed increases

· on small seed companies;
· on the competitiveness of PVP with other forms of intellectual property protection in the future, and
· on the number of PVP applications in the future.

Our members specifically take issue with the statement in the notice that "this action would not have a significant economic impact on a substantial number of small business entities."

ASTA members are diverse. Our members include multinational companies, but the vast majority are small and medium sized companies. A large number of those are "mom and pop" operations. These small companies have overwhelmingly expressed the view that the proposed fee increase would significantly impact their business operation and are concerned about their ability to afford PVP protection in the future. Moreover, they point out that this additional fee increase follows a 35 percent fee increase that went into effect on February 10, 2003. Some members have suggested that a sliding scale of fees based upon company sales be considered.

The escalating cost of PVP is reducing the competitiveness of PVP with other forms of intellectual property protection, such as patents and trade secrets. Members verbally expressed this reality at the January 23-26, 2005 ASTA Vegetable and Flower Seed Research Conference in San Francisco. ASTA members strongly support a range of options for intellectual property protection and would like for PVP to continue as a competitive option.

The escalating fees are also likely to reduce the number of filings over time. There would be two negative consequences of this. First, the amount of material protected by PVP would decrease, reducing the overall level of intellectual property protection with the decrease concentrated in small companies. Second, as the number of applications dropped, the cost per application would have to increase – further reducing the competitiveness of PVP versus other forms of intellectual property protection.

ASTA members also have expressed concerns about three "operational" issues related to the proposed increases. First, nothing is said about any impact on service/productivity levels. ASTA members would hope that service levels would improve as a result of fee increases.

Second, ASTA members point out a second fee increase is proposed for November, 2005. The rationale for the second fee increase is to stabilize the PVP office's trust fund into 2007. ASTA members believe that the industry should be provided a projection of what fee increases or reductions after the trust fund is stabilized can be expected. We believe without such discussion and future planning the system will remain fiscally vulnerable with the risk and uncertainty being the burden of the seed industry.

Finally, the proposal does not address other ways of addressing the cost versus revenue problem - for example, requiring additional fees for incomplete and incorrect applications.

ASTA strongly supports the PVP office and its mission. ASTA members commit significant resources to develop new varieties for farmers, gardeners and consumers. Intellectual property rights protection is necessary to continue to attract investment in new research and development into the industry. Fees, process and time all factor into a Company’s or breeder’s decision when choosing the appropriate form of intellectual property rights protection.

We appreciate the opportunity to provide our comments on this critical issue. We understand that the PVP office is a voluntary, user-fee funded service and are aware of the operating deficits and the need to correct them. However, we urge the PVP office to consider the points made above with respect to the impact of continued increases in fees on small businesses, on the competitiveness of PVP versus other intellectual property protection systems and on the need to review "operational" alternatives in its approach to correcting the deficit. The seed industry is more than willing to work with the PVP office to address the fiscal issues that it is facing.

Sincerely,
RICHARD T. CROWDER
President/CEO

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Founded in 1883, the American Seed Trade Association (ASTA), located in Washington, DC, is one of the oldest trade organizations in the United States. Its membership consists of about 900 companies involved in seed production and distribution, plant breeding, and related industries in North America. As an authority on plant germplasm, ASTA advocates science and policy issues of industry importance. Its mission is to enhance the development and free movement of quality seed worldwide.