Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 56 2017-2018 In addition, to support Vilmorin & Cie’s employees, who are the primary vectors of the Company’s image, and to guide them in their actions and behaviors in the interest of integrity and ethics, tools and training are provided, the first line of which includes the Group’s Code of Conduct (1) , which is now widely deployed. 1.7.3.4. Legal risks Risks related to the competition Identification of the risk Vilmorin & Cie faces global competition characterized by significant changes in the size of players and rapid technological changes. In this context, Vilmorin & Cie remains particularly vigilant with regard to compliance with competition law rules. Managing the risk Knowing the rules, and integrating them in specific codes of conduct, and early enough in reflections, are both essential in preventing such risks. Naturally, Vilmorin & Cie is committed to respecting legal and regulatory provisions, both national and international, with regard to laws on competition. The whole network of the group’s lawyers is required to supply any information and assistance necessary to make sure that legislation in force is known and applied in the Company and all its subsidiaries. Training, advice and the dissemination of guidelines are some of the actions undertaken to satisfy this objective. These actions are monitored and are the subject of specific reports (indicators) within the framework of the CSR action plan. Moreover, the Code of Conduct includes reminders concerning the rules of business ethics. Risks related to intellectual property Identification of the risk The intellectual property rights held by Vilmorin & Cie, including plant varieties and the protection of technological innovations, constitute Vilmorin & Cie's assets, requiring special precautions. The questioning of the validity of intellectual property titles, and the related rights, is a risk that Vilmorin & Cie might well be faced with. Moreover, Vilmorin & Cie’s activity requires access to genetic resources* in order to develop new varieties adapted to the needs of farmers throughout the world. In this respect, Vilmorin & Cie is exposed to different risks, particularly that of unduly using protected genetic material without the adequate authorizations. This risk could, on the one hand, be related to new regulations such as the Convention on Biological Diversity (CBD), and on the other, to changes in practices in the seed industry. Indeed, the seed industry, alongside the traditional intellectual property tool of the Proprietary Variety Protection Certificate (PVPC), is increasingly using patents to protect its innovations. These risks could weaken the Company, affecting its results and/or damaging its image and its reputation. Managing the risk Vilmorin & Cie has a Coordination Committee composed of experts form the Legal Affairs and Scientific Affairs Departments who work very closely on intellectual property issues. Supported by a solid legal framework and a network of expert lawyers on the subject of intellectual property, Vilmorin & Cie uses numerous tools to protect its rights and innovations. One of the clauses in the Group’s Code of Conduct (1) states that each employee in the group must ensure that creations and innovations benefit from adequate protection of intellectual property, which is essential for the company’s sustainability and development. Moreover, traceability and documentation of biological material used in breeding* programs are indispensable to ensure authorizations for use. This process is based on written collection procedures laid down for this purpose, and on the training of employees at Vilmorin & Cie and its subsidiaries on this subject. At the same time, Vilmorin & Cie lobbies public authorities for a breeder’s* exemption to be included in legislation on patents, so that a plant protected by a patent can nevertheless be used for breeding* purposes. This information is presented in detail on page 122. Moreover, in order to facilitate the acquisition of patents (2) that protect plant innovations, Vilmorin & Cie participated in the creation of the International Licensing Platform Vegetable (http://www.ilp - vegetable.org/ ) . Litigation As they run their business, Vilmorin & Cie and its subsidiaries are sometimes required to deal with various kinds of litigation: customers (debt recovery, various claims), suppliers, competitors (intellectual property). These situations undergo a detailed risk analysis, resulting in the appropriate course of action to be taken in the companies concerned, in liaison with Vilmorin & Cie’s legal services. Provisions are made on such litigations when appropriate. Information on litigations is presented in Note 26 “Other current provisions” in the notes to the consolidated financial statements. (1) Information on the Code of Conduct is presented in detail on page 117. (2) Information on the PVPC and patents is presented in detail on page 122. 1.7. Risk factors