| The natural ability of plants to spontaneously propagate offers an obstacle to the use of the patent system for the protection of intellectual property in the traditional plant breeding sector. A specific legal protection system was introduced in 1961 by UPOV (the International Union for the Protection of New Varieties of Plants), and described in the 1961 UPOV Convention. The dependency measure was introduced during the 1991 revision of the Convention. In broad terms, a dependency situation occurs when a new variety is "essentially derived" from (i.e. retains almost the entire genotype of) its main parent. Then, under some conditions specified in the regulatory text, permission from the breeder of the parent variety must be secured for the commercial exploitation of the derived variety. The introduction of dependency mainly came in reaction to the incursion of biotechnology into plant breeding. In particular, the development of techniques for transferring patentable engineered genes into plants was perceived as a major threat by traditional breeders.; The social and private value of this policy is evaluated through a theoretical analysis of the firms' research behavior. The following variables are investigated: (i) the pace of genetic progress; (ii) investments and profits at the industry and firm level and their influence on industry structure; and, (iii) the exchange of genetic resources between firms.; Game theory is used to model an innovation race between two firms, along a discrete, one-dimensional ("quality") innovation path. A simplified version of the model is solved, where the length of the race is limited to two quality steps. The ex-ante and ex-post results (before and after the enforcement of the dependency policy) are compared.; The main theoretical results show that the enforcement of the dependency policy (1) tends to decrease the pace of genetic progress when there is ex-ante research, (2) could encourage ex-post investment in areas of research ex-ante deserted by the private sector, such as small grain crops, (3) provides a way to control access to essential derivation breeding, thus responding to the traditional breeders' concerns about patentable biotechnological applications to plant breeding, and (4) tends to discourage the exchange of germplasm, and is expected to increase genetic diversity in the long run. |
