The Value Is in the IP: Protecting Australian Agritech’s Real Asset

“Once the product is out in the field, the marginal cost of copying it is close to zero. That’s a textbook appropriability problem, and it’s more acute here than in most tech sectors.” — Dr Chris Vindurampulle

Few industries are as woven into Australia’s economy and identity as agriculture, a sector that exports roughly 71 percent of its production by volume, according to ABARES, and ranks among the most efficient in the world. Sustaining that in a hotter, drier, more competitive century increasingly falls to technology – and the value in that technology, more often than not, lies in the intellectual property (IP) behind it.

Ask what an agritech company is worth and the instinct is to point at the hardware: the drones, the sensors, the autonomous tractors. The real answer is usually the IP.

The most recent available breakdown of the sector’s investment, compiled from 2023 figures, shows the largest share of funding flowing to ag biotechnology – the most patent-and rights-intensive corner of the industry – with capital concentrating exactly where the IP does.

For any founder raising money or eyeing an exit, that makes IP strategy less a legal formality than a core commercial question. And in Australia, where a single innovation can be protected by both a patent and a plant breeder’s right (PBR), it is one with more upside – and more room for costly missteps – than many realise.

Why IP protection matters

The immutable reality is that a lot of agritech products – seeds, livestock genetics, microbial biologicals—self-replicate and are easy to copy.

“Once the product is out in the field, the marginal cost of copying it is close to zero,” says Dr. Chris Vindurampulle, Principal in the Melbourne office of Griffith Hack, a member of the IPH network. “That’s a textbook appropriability problem, and it’s more acute here than in most tech sectors.”

Copying may be easy, but commercialisation isn’t.

“R&D cycles can be long, capital-intensive, and overlaid with regulatory approval—a valley of death for agritech,” Vindurampulle says. “IP is one of the main tools that lets a company bridge that gap.”

The sector’s heavy export orientation intensifies the problem, because Australian agritech stakeholders must look to global markets to capture real value.

“IP isn’t just about stopping the neighbour from copying—it’s about being able to license into the US, or defend a position in Brazil, or do a trade sale to a European strategic,” Vindurampulle says. “That’s a global game, and the IP strategy has to be built for that from day one.”

And because agritech embraces various segments, IP protection can be a complex business.

“Farm robotics looks like deep tech and needs patents, designs, trademarks and software protection. Ag biotech looks a bit like pharma-lite where protection is provided by patents plus regulatory data plus know-how. Novel foods sit somewhere between biotech and fast-moving consumer goods,” Vindurampulle says. “So, when we talk about the role of IP in agritech, we’re really talking about assembling the right toolkit for a given context, not applying a single template.”

How Australia protects agritech IP

In Australia, plant innovation can be protected by two separate rights – patents and plant breeder’s rights (PBR) – each covering different ground.

The country’s PBR legislation protects plant varieties, but not the underlying genes or technologies. Protection extends for 20 years, and 25 for trees and vines.

“The process is cheap, it’s fast, and it’s essentially harmonised internationally through UPOV 1991,” says Dr. Justin Sweetman, Principal at Griffith Hack in Brisbane, and formerly with Pizzeys, which recently integrated with Griffith Hack.

Patents, which protect the inventive concept, have a higher eligibility bar and far greater application costs.

“But the scope is much wider because a patent reaches any variety embodying the invention, regardless of who bred it,” Sweetman says.

While patents provide a broader scope of exclusivity, the term of a PBR runs from grant, which can result in a longer period of protection.

Consequently, patents and PBRs are often most effective when used together.

“You patent the trait or the technology upstream and you PBR the commercial variety downstream. If one right is invalidated or narrowed, the other survives. You can license the trait to breeders under the patent and the variety to seed multipliers under the PBR. And you can collect royalties at different points in the value chain: for example, upfront trait fees under the patent, or seed-based royalties under the PBR.”
Dr Justin Sweetman

Patentable subject matter

Australian law has no general statutory exclusion of plants, animals, or micro-organisms as part of its eligibility framework.

“Our legislation uses the ‘manner of manufacture’ test, which is deliberately open-textured and gives us a genuine advantage over places like the EU, Canada, and India, which do have such exclusions,” Vindurampulle says. “The position relative to the United States is more nuanced, but generally speaking, Australia remains more permissive when it comes to engineering biological products, modified plants, and practical application of genetic technologies, where most of agritech innovations’ commercial value lies.”

The upshot is that claims to plants, seed, transgenic events, gene constructs, transformed cells, method of production, and methods of use are among the inventions that are patentable.

“In other words, you can protect the whole architecture,” Vindurampulle says. “So, for a client thinking about where to test the boundaries of a claim set, Australia is genuinely a good place to prosecute early.”

There is one caveat: Jurisprudence has established an exception for isolated natural sequences, natural cells, and natural proteins where the claims read on the natural molecule. But, from a practical perspective, the exception has limited impact in the sector as a whole.

“The reality is that most modern agritech innovation doesn’t sit in that pure natural-sequence space,” Vindurampulle says. “It sits in the applied and engineered space.”

Does Australian agritech need more IP protection?

To be sure, the debate over seeking a proper balance between providing breeders with enough IP protection to encourage innovation, preserving farmers’ and public access, and ensuring market fairness and genetic diversity, has not abated.

But there are two features of the Australian framework that influence how much reliance is placed on formal IP rights to generate a return on innovation.

The first is the Rural Research and Development Corporations (RDCs), Australia’s internationally distinctive system for funding agricultural R&D through a partnership between industry and government.

“The existence of RDCs means that agricultural innovation in Australia is not funded solely by private capital,” Sweetman says. “Public and industry co-investment through the RDCs helps support early-stage research and technology development, reducing some of the commercial risk that would otherwise need to be offset through stronger or broader IP rights.”

The second feature for consideration is the End Point Royalties (EPR) system, a plant breeder’s collection mechanism used mainly for Australian grains, and one that works alongside PBR.

In self-pollinating crops such as wheat and barley, growers often retain seed from season to season and replant it rather than repurchasing it. This reduces breeders’ potential revenue from seed sales. So if breeders relied solely on their PBR, they’d collect very little by charging only for seed.

EPRs circumvent that by adding a contractual layer, whereby growers agree to pay a royalty on how much grain the variety actually yields every season. Because the royalty is charged on harvested grain rather than on seed, it’s paid by every grower who sells that variety—including those who save and replant their own seed.

RDCs and EPRs, Sweetman says, demonstrate that the effectiveness of IP systems should not be assessed by looking at rights in isolation.

“The real question is whether innovators have a practical pathway to obtaining a return on investment. In Australia, that return is often supported by a combination of IP rights, royalty collection mechanisms and public co-funding.”

For founders, the lesson is that value in Australian agritech is captured not by any single right but by stacking them—patent, PBR, EPR, and public co-funding—into a position built for global markets from the outset.