Trade lessons from 'Cuetlaxochitl'

The story of poinsettia, a flower with showy-red bracts used for Christmas decorations in America since the 16th century, is a classic example of intellectual property rights, or biopiracy — depending on whose interests are to be served: the breeder's or the cultivator's

Trade lessons from Cuetlaxochitl

In this season of Christmas cheer, there is much to celebrate in the traditions that have come to be associated with the festival. And there is much for business to celebrate in the symbols and customs intrinsic to Christmas.

Poinsettia, a plant that has been associated with Christmas since the 16th century, is an example in case. Although it is now available in many hues, its traditional red and green foliage is widely used in Christmas floral decorations.

The shrub, known for its showy-red bracts or modified leaves, is native to Mexico and was used by the Aztecs for dyeing their garments and as an anti-pyretic medicine.

How the Cuetlaxochitl — meaning "flower that grows in residues" in the Aztec language — became the Christmas Eve flower of modern times as well as a top-selling potted plant is a story replete with patents, a market monopoly and a leaked trade secret that finally undermined one American family's control of the business in the 1990s after a nearly 100-year run.

Brought to the US by the country's first ambassador to Mexico, Joel Poinsett, a botanist, the poinsettia was named after him.

It caught the fancy of Albert Ecke, an émigré from Germany, who sold it on the streets of Los Angeles. His son and grandson promoted the attractive variations they developed through a grafting technique to create fuller, more compact plants than the weedy original.

Their intensive marketing of a regular release of new varieties turned the poinsettia into the most popular potted plant in America, accounting for sales of more than USD 250 million annually, a big chunk of it in the weeks leading up to Christmas.

The Ecke family, says a report on the website of the US Patent and Trademark Office, holds roughly 500 US plant patents, "a tribute to the ingenuity and passion of their vision, technological talent, and business acumen".

Looked at from this angle, the poinsettia is a case study of what breeding skills combined with business acumen can achieve in a setting of intellectual property rights (IPRS).

Or is it, rather, a case of biopiracy where the people and the region that nurtured the plant for centuries and inspired its link with Christmas did not share the benefits of its commercialisation?

It all depends on the perspective one takes and whose interests one wants to nourish and protect: the breeder's or the cultivator's.

Cuetlaxochitl growers could not compete with the likes of the Ecke Ranch firm (the Ecke family's horticulture genetics company), and were unable to export to a lucrative market. Instead, they became growers for the American company.

True, in 1828 when Poinsett brought the shrub to the US and distributed it to his friends, there was no Convention on Biological Diversity (CBD) which decrees fair and equitable sharing of benefits arising from the use of genetic resources.

In any case, the US is still the only major country that is not a party to CBD. On the other hand, the big boost to the US poinsettia industry came from the Plant Patent Act of 1930.

More than 23,000 plant patents have been granted since then, and the US Patent and Trademark Office says, "plant patents are an interesting and often overlooked part of the US IP system."

Apart from patent systems in individual countries, there have been systematic initiatives at the behest of plant breeders to create strong protection for their varieties — at the cost of farmers.

The most significant of these is the International Union for the Protection of New Varieties of Plants or UPOV, a treaty created outside the UN to provide a regulatory system for protecting plants.

Members joining UPOV have to enact a compatible national law. Since it was first passed in 1961 at the prodding of European breeding companies, the treaty has been revised thrice, the last being in 1991 when the most stringent regulations were added.

So far, just 76 members have signed, and many of these did so because of pressure when signing bilateral trade agreements with the EU, US, Japan and the European Free Trade Association.

An example of this is New Zealand, which has just enacted a Plant Variety Rights Act to meet its obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that it has joined.

The new Act gives effect to the provisions of UPOV 1991, without New Zealand actually becoming a signatory to the convention.

The country has tried to balance the rights of its Mãori population to their traditional plants, but analysts have noted that breeders' rights have been given precedence.

Like many other countries, India has refused to join UPOV since it denies farmers any rights, such as the freedom to reuse farm-saved seeds and to exchange them with their neighbours, which is a tradition in this country of poor farmers.

With the World Trade Organization's all-encompassing IPR agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) coming into force, India had the choice of either joining UPOV or to formulate a sui generis system that granted protection to breeders' rights while keeping farmers' interests uppermost.

The result was the Protection of Plant Varieties and Farmers Rights Act of 2001 (PPV&FRA), which balances the interests of both while encouraging innovation in new varieties.

This, however, has not been to the liking of developed countries, and India has faced pressure constantly to join UPOV.

The standoff with PepsiCo, which attempted to enforce its IPR on two of its registered potato varieties that are used to make its branded wafers, has not helped India's case that it was compliant with global norms on protecting breeders' rights.

In 2018, multinational PepsiCo began intimidating potato growers in Gujarat for violating its IPR, claiming that the farmers were using its variety illegally.

It filed IPR infringement cases against a clutch of cultivators, the first such cases to be filed in India.

Following massive protests by farmers and a strong campaign by farming activists, the authority overseeing the implementation of PPV&FRA was last year forced to revoke PepsiCo's registrations, which had another six years to go.

This has opened India to further pressure, the latest from the EU, which is negotiating an ambitious Free Trade Agreement (FTA) with India.

One of its demands, according to farmers' lobbies up in arms against the FTA, is the demand that India join UPOV.

A sustained mobilisation against the trade deal, the details of which are not public, is underway and there is no prospect of peace and goodwill on this contentious point.

Views expressed are personal

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