navigating the patent maze

The headline of a recent article in the Financial Times proclaims “Indonesia applies for palm oil patents.” Such a headline can be inflammatory, making it all the more important that it and the article be factually accurate. Unfortunately, the article contains erroneous facts and statements about patents and the patent process.

“Jakarta-listed Lonsum filed its patent application with the European Patent Office in March 2007 even though it has yet to produce an F1 hybrid seed. Patent lawyers say it would have then undergone robust examination before being published for public scrutiny a fortnight ago.”

The patent application was first filed at the European Patent Office and subsequently published 18 months later, a normal procedure. The “robust examination” referred to is actually only a search for relevant prior art. The search results were published along with the patent application. A search for prior art is not an examination, however; examinations are reasoned statements regarding the patentability of the claims. In turn, patentability is assessed for a number of aspects, not all of which are prior art.

In addition, the patent application was also filed at WIPO (World Intellectual Property Office) (two filings, one in March 2008 and another in April 2008) and at the Thailand patent office (March 2008). The international WIPO patent application must be converted to filings in national patent offices by mid-September 2009. Because Thailand is not party to the WIPO process, the application had to be filed in Thailand directly.

“Approval could take two years ….”

Approval, which is the granting of a patent, will very likely take more than two years in Europe, due to a huge backlog of pending patent applications and to . In other countries (other than Thailand), the examination process won’t even begin in other countries until late 2009. While statistics regarding the average length of patent examination aren’t readily available for every country, at least one estimate is 5.5 yrs from the priority date. Biotechnology patent applications may be longer than that.

“…. but no other company will be allowed to apply for a similar patent while this is pending.”

This statement has no basis in truth. A similar patent application can be applied for at anytime. It will be examined according to requirements for patentability, like every other patent application. If the “similar” patent application contains identical claims, priority will be accorded to the applicant with the first-filed patent application in nearly every country except in the United States, where patents are awarded to the first-to-invent.

The claims in the patent application are directed to methods for producing F1 oil palms. In particular, the method involves identifying haploid or homozygous diploid individual plants with an atypical phenotype, such as atypical growth morphology or atypical growth pattern. Homozygous diploid plants can also be obtained from haploid plants in which the chromosomes double spontaneously or are induced to double. The doubled haploid plants can then be crossed to produce F1 hybrid oil palms.

Patent family information:

EP 1972692 : filed 20070319, published 20080924

WO 2008/114000 : filed 20080319, published 20080925,
priority docs: EP 1972692 (application no. 07104386.3),
TH 081001325 (Thailand, filed 18 March 2008)

WO 2008/114145 : filed 20080416, published 20080925
priority docs: EP 1972692 (application no. 07104386.3),
TH 081001325 (Thailand, filed 18 March 2008),
WO 2008/114000 (application no. PCT/GB/2008/000943)

According to the etc group in a recent communiqué, the “gene giants” - BASF, Monsanto, Bayer AG, Syngenta, and DuPont - have grabbed up the so-called “climate ready” genes in a total of 55 patent families. Many of the patents are said to be related to transcription factors that control stress responses, and to the proteins and genes encoding proteins that affect stress tolerance. In a discussion of several specific patents, ETC alleges that the claims encompass many plant species and, based on this, concludes that the patents are dangerously broad.

Like many reports of NGOs (non-governmental organizations) with political agendas, the etc group report is a mix of facts, mis-statements, and analysis that does not fully factor in patent law and procedures. Unfortunately, reports like this are splashed in headline news. The Washington Post featured the report in a story run on 13 May 2008. The story “Firms Seek Patents on ‘Climate Ready’ Altered Crops” was actually somewhat more balanced than its headline suggests, but I suspect that the headline has the most impact. What was still lacking in the story was a viewpoint from an expert in the patent field.

In the attached file, I’ve attempted to bring patent knowledge to bear on the report’s facts and conclusions. The basic finding is that etc group’s doomsday scenario is unwarranted. Visions of gene grabbing and holding farmers hostage are way overblown. At most, patents will be granted in only a handful of countries in the world; one major reason for this is that quite a number of countries do not allow patents on gene sequences or transformed plants. A positive fallout from the patent applications is that the sequences of the genes are published - and are free to use in countries where no patent on the gene sequence exists.

Overview patent landscapes, like this one by the etc group, are helpful for setting out the lay of the land. Conclusions about the impact of patents however, require more detailed investigation and expertise than the etc group demonstrated. In fact, we find that a detailed analysis leads to very different conclusions. In my view, it’s important - even critical - that we do not blindly accept the conclusions, but apply our knowledge to careful analysis and spreading the word.

Read or download etc climate gene commentary

According to a USDA press release (PDF), the first genetically modified crop has been approved for domestic planting in Egypt. The crop is a pest-resistant corn variety - Aljeeb-YG- that was produced by crossing a Monsanto Corp. Bt-expressing corn variety (MON 810) with an Egyptian variety, called Ajeeb. A local seed company, Fine Seeds International, will be producing and selling the seed.

As with many instances of commercialization of GM-crops, the announcement of Aljeeb-YG led to mixed reactions within Egypt. As reported by Intellectual Property Watch, the debate appears to pit biological advantages (e.g., negligible insect infestation, increased yield, decreased use of chemical insecticides) against political and intellectual property issues. Sadly, IP Watch didn’t investigate any of the claims put forth by opponents, point out fallacies of these opinions, or explain the plant protection system in Egypt.

Egyptian law (PDF) does not allow patents to issue on plants but does provide protection for plant varieties. Articles 189 et seq. set out the requirements: “a variety shall be new, distinct, uniform, stable and shall be subject of a denomination”. Protection lasts 20 years for crops other than trees and vines and gives the owner the exclusive right to commercial exploitation. Third parties (e.g., farmers) are allowed “non-commercial activities and use of the result of propagation material, by farmers on their own holdings for private propagating purposes.” In other words, farmers may save seed to replant for their own consumption. This exception is sometimes called “farmers privilege”. In addition, third parties may use the protected variety in breeding, cross-breeding and selection for the “purpose of breeding new varieties.” Curiously, protection lapses if the protected variety is offered by the owner outside Egypt. Other provisions require disclosure of the genetic source relied on to develop the variety, and moreover, assurance that the breeder acquired that source by legal means under Egyptian law.

Against this background, let’s examine some of the comments reported by IP Watch.

“This means, said Tarek Saif, biotechnologist at Egypt’s National Institute of Oceanography and Fisheries, Egypt’s collaboration with Monsanto started with the word “partnership” to pave the way for public acceptance of GM plant and ended with “ownership” for Monsanto. “How did an Egyptian variety become owned by Monsanto just as a result of crossing it with its line?” Saif asked.”

Egypt has a history of open access to its germplasm and is a signatory of the FAO International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA). The treaty fosters open exchange of genetic resources in the interest of food security. Generally, when there is open access the restrictions on protecting varieties are confined to the original variety and not to derived varieties. The new Aljeeb-YG variety was developed by Monsanto and would have been the result of more than a simple cross. Varieties with introgressed traits are the result of an initial cross followed by many backcrosses, always selecting for the introduced trait. Furthermore, it is unclear whether or not Monsanto has applied for protection for this variety. (No database of plant variety certificates could be found on the internet.)

Nagib Nassar, Egyptian professor of genetics and plant breeding at University of Brazil, believes that the new Bt corn variety will have a “heavy economic cost on the shoulder of [the] small farmer.” He cites as a reason: a possible Technology Use Agreement that will prohibit seed saving and “poor farmers … obligated to destroy any seed for future plantation.”

In the United States, Technology Use Agreements (TUA) have been used to prohibit replanting patented seed by farmers. So far, there is not any indication that Fine Seeds International will be selling seed under a TUA. Furthermore, according to a report posted at the FAO website, the vast majority of farmers in Egypt have very small farms (less than 2 acres), making enforcement of a TUA a more difficult issue than in the United States where farm land holdings are typically quite large and accessible. In addition, it is unclear whether a TUA would be upheld by an Egyptian court. Until more information is available, this criticism is unfounded. Certainly without a TUA, farmers are able to save and use seed for their own consumption.

In summary, Egyptian plant variety protection law does not put farmers at the mercy of private industry commercializers, be they multi-national companies or domestic companies. Besides, farmers have the ultimate decision whether or not to spend their money on this new variety.

The infamous Nap Hal patent has been revoked.  Despite Greenpeace’s claim of victory (see their October 2004 press release), Greenpeace had very little, if anything, to do with the patent revocation.  In fact, Monsanto had sold their entire European wheat and barley business, including the rights to Nap Hal,  to the French seed company RAGT Genetique in May 2004.  Moreover, RAGT Genetique voluntarily withdrew the patent, citing commercial reasons, i.e., they weren’t going to make any money on the seed so why fight the patent. 

Read an excellent article about the Nap Hal patent and Greenpeace’s boasting de-bunked at reason online.  See also my earlier posts here and here. 

In November 2004, I reported the conclusion of a long running dispute in the U.S. Patent Office on who first invented Agrobacterium-mediated transformation technology (previous post).  A few weeks ago, a joint press release from Bayer CropScience, Max Planck Society, and Monsanto announced that the interference ended by settlement among these parties.  Under the agreement, the organizations will cross-license their respective Agrobacterium-mediated transformation technologies; Bayer (the exclusive licensee of Max Planck’s technology) and Monsanto will provide each other non-exclusive licenses related to R&D and sale of transgenic crops; Monsanto will give Max Planck a license in the U.S. for research purposes.  No other details of the agreement are disclosed.

The chutzpah of the parties is revealed. 

From Bayer CropScience:  "This agreement secures freedom for the involved parties in the field of Agrobacterium-mediated transformation technology, thereby ensuring present and future market access for their respective technologies in the United States and Canada,"

From Monsanto:  "This is a positive development for agricultural biotechnology as a whole. This agreement enables their [MaxPlanck and Monsanto] respective agricultural innovations to reach consumers and farmers without hindrance."

If the technology is not licensed to anyone else - neither of these companies is known to widely license technology - then they are able to effectively stifle other companies from entering the transgenic plant field.  Agrobacterium is the most widely used method for transforming plants; there are very few other means of transformation, only bombardment (owned by Cornell and licensed to duPont) is frequently used.  With luck new transformation technology developed at CAMBIA using non-Agrobacterium strains will break the stranglehold. 

One form of legal protection for biotechnology inventions, which is not often used, is trade secrecy. This right, in contrast to patents and copyrights, is not registered and is of unlimited duration, as long as the holder of the trade secret makes reasonable efforts to maintain secrecy. With regard to keeping parental lines of hybrid seed as a trade secret, for example, identification by private code of fields of inbred parent lines of corn has been deemed, in the 1994 Iowa case Pioneer Hi-Bred v. Holden Foundation Seeds, sufficient to constitute a reasonable effort to maintain secrecy, even though the corn was grown outdoors and subject to misappropriation by informed “flashlight breeders.”  Furthermore, acquisition of the viable parent seeds that occasionally appear in bags of hybrid seeds is not antithetical to trade secrecy. But what if the parental lines are protected by Plant Variety Certificates (akin to plant breeder’s rights)?  One might think that the disclosure requirement to register a plant variety would destroy the secrecy necessary for maintaining the lines as trade secrets. 

The short answer from the District Court of the Western District of Wisconsin is NO, registration does not extinguish trade secrecy. 

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Yours truly, along with two agricultural economists (Phil Pardey of University of Minnesota and Bonwoo Koo of IFPRI), have published an article in this week’s Science journal.  If you have an account, you can view the article on-line.  Because journals hold the copyrights, I will ask for permission to post a copy here.

Summary:  Much of the debate on the implications of intellectual property (IP) for protecting plant varieties occurs in the absence of an understanding of the specifics of the rights in particular jurisdictions, a practical sense of the rights claimed or granted, and their evolution over time. Moreover, existing information highlights rich-country developments, with little attention to developing countries. This Policy Forum reviews the approaches to plant-related IP protection worldwide, with data on the applications of plant breeders’ rights, and discusses possible implications of IP protection for food production and human health.