Purpose

This study focuses on the seed production contracts for patented seed inventions, whose purpose is to more effectively enforce exclusive use of the seed that is protected by utility patents.

Utility patents and Plant Variety Protection certificates for seeds are often supplemented by contractual provisions to prohibit reverse engineering of the materials by farmers. The study looks at ways to strengthen enforcement of intellectual property rights of crop inventions that are often not differentiated in the market and have a potential to fall into a category of public goods.

Project

The main purpose of the study is to assess the efficiency of seed production contracts in providing disincentives for contracted farmers to save seed within the agreements. Such an assessment of the contract is critical for designing an efficient contract. Effective deterrence of farmers from saving the contracted seed is a mechanism by which property rights granted to the seed are enforced through voluntary actions by farmers.

Impact

Findings from the results will objectively examine the current approach taken by major seed companies to deal with farmer-saved-seed based on the microeconomic theory of contracts under asymmetric information.

Outcomes: Practical recommendations for designing more efficient terms in the seed production contract by discouraging contracted farmers from engaging in the farmer-saved-seed activity. Currently, seed companies lack a coherent and systematic scheme to design a contract for seed production.