Monthly Archives: May 2013

The Drift of Genetically Engineered Seeds

Assume for instance that a farmer buys, say, a mix of “soya seeds” from a local grain elevator, and sow them. Later, it turns out that, the undifferentiated mix of seeds also contained “Patented Genetically Engineered (GE) seeds”.

Will it be an act of infringement???

For centuries, farmers have saved seeds from season to season and re-planted the saved seeds later in the season. An American company Monsanto has challenged this ancient practice.

Biotech Industry Giant, Monsanto, had developed GE seeds that are resistant to its own herbicide (roundup), which farmers spray on fields to control weeds while their crops are protected from the death-dealing effects of a tiny, patented gene. Monsanto was allowed to patent the seeds. So now the giant has control over both the crops and the weed killers. Till 1980, The United states patent and Trademark office had refused to grant patents on seeds, viewing them as life forms with too many variables to be patented. Then USPTO granted patent to a live human made micro organism (Pseudomonas bacterium) developed by a General electric scientist to clean up oil spills. Monsanto applied taking advantage of the development and applied common sense for patenting life forms based on minor changes in genetic structure and took over 70-90% of the global seed market. He then applied prohibitions for the re-use of “now patented technology” for further commercial use.

Monsanto filed 144 lawsuits against family farmers and settled 700 cases out of court between 1997 and 2010. The Lawsuits target farmers who used Monsanto seed but violated the licensing agreement, and also those farmers who never had intension of growing GE plants. This answerers the above question. So, now for the first time in history, if a pollen grain or seed of GE crop, trespasses on to a farmers property, due to blow of a wind or a truck passing by in high speed, would lead to “genetic (GE) contamination”!!

OSGATA et al. vs Monsanto deals with the “GE contamination” and represents 31 farmers, 13 seed selling businesses and 31 agricultural organizations that represent more than 30,000 individuals and 4,500 farms. They had originally filed the case on March 29, 2011 and after the dismal of their case by the District court of New York in February 2012, they appealed in the Appellate Court, Washington DC. The Oral argument was herd in January 10 2013.

The conventional farmers are scared for even planting the crops which are also genetically modified by the biotech firm, as if found contaminated would be sued for infringement.

But what is causing Monsanto of this exploitation??  The cause may be the selling of GE products not labeled. Monsanto learned their lesson in Europe and Asia that customers won’t buy their GE crops when labeled. In America the company and their allies have spent millions to defeat the local labeling initiatives. So, when conventional farmers are out of the way, America has no choice to buy labeled products or unlabeled products. Monsanto was under investigation by the Department of justice for violating anti-trust laws by practicing anti-competitive activities towards other biotech companies, but the investigation was quietly closed by the end of the year 2012.

All this leads to one solution it seems: People of America should boycott any product made with corn, soya, sugar, canola, cotton or alfalfa (including milk as diary cow’s eat alfalfa) unless there is a certainty that it was made without any genetically modified seed (as the GE products are labeled in America). Second, a set of a term for licensing or assignment for the allowing re-use of patented GE seeds with some agreed royalties should be applied rather than buying the fresh patented seeds by farmers again and again.

The GE crops have also affected the Indian farmers. Various NGOs are blaming the suicides of   Indian farmers to be due to the indebt by Monsanto’s GE seeds. Recent update being that Monsanto is controlling 95% of GE Cotton seeds supply, which are sold by the firm by the name of BT Cotton seeds. Due to which the price have jumped almost 80 percent.

India has been among the first countries in the world to pass a unique law to protect both the rights of breeders and farmers, by passing the legislation granting farmers right in the form of Protection of Plant Varieties and Farmers’ Rights Act, 2001. As per under section 3.5 of the Plant Variety and Farmers’ Rights Act, 2001 of India, the farmers have the Rights to seed. India’s Act aims to give farmers the right to save, use, exchange or sell seed in the same manner he/she was entitled to before the Act. However, the right to sell seed is restricted in that the farmer cannot sell seed in a packaged form labeled with the registered name.

But the difference between a genetically modified crop to the crop modified due to breeding has not been applied or understood. Genetically modified crops are plants, with DNA that has been modified using genetic engineering technique, which are then used in agriculture, whereas, selective breeding is less scientific and a much older technique where a breeder nurtures the useful traits in crops. They are completely different and should be dealt differently too.

About the Author: Ms. Shailee Gupta, Woman Scientist, TIFAC Trainee at Khurana & Khurana and can be reached at: shailee@khuranaandkhurana.com

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VERNON HUGH BOWMANv/s MONSANTO COMPANY et al. (US No. 11-796, 2013) Case of Patent Exhaustion

Gajendra Khichi, an intern at Khurana and Khurana talks about case of patent exhaustion or doctrine of exhaustion. Through this post, he gives special emphasis on the recent case of Vernon Hugh Bowman v/s Monsanto Company et al., which created quite a stir regarding patentability of seeds and plants.

Today, when you acquire a new patented machine, you gain certain rights which you attain by paying for that machine. So you can sell it, use it or lend it to someone. But what if you somehow come to know about the method to make the machine and now you want to produce new copies of this patented machine? Unfortunately, this is not permissible and doctrine of exhaustion does not provide any exception to this.

The factual situation is that Mr Bowman purchased patented Soyabean seeds produced by Monsanto also known as Roundup Ready Seeds. These seeds had special property that they enabled soybean plants to survive exposure to glyphosate (the active ingredient in many herbicides). The seeds were sold under a licensing agreement that the growers could plant seeds only once then they could consume them or sell them. Further the farmer couldn’t save any of the harvested soybeans for replanting, nor could he supply them to anyone else for that purpose.

But next time as he did not want to pay premium price for Monsanto’s seeds, Mr Bowman went to a grain elevator; purchased “commodity soybeans” intended for human or animal consumption; and planted them in his fields for continuous eight crops. He used the commodity seeds with the view that those were probably Monsanto’s seeds grown by other farmers.

This use by Mr Bowman was challenged by Monsanto, interestingly, the defence taken by the Bowman was that such use is protected by doctrine of exhaustion, but the District Court rejected his claim which was affirmed by the Federal Circuit saying that, “right to use” a patented article following an authorized sale, does not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee.”

Arguments

It was argued by Mr Bowman that his use was protected under the doctrine of exhaustion and that, his use was normal use of the seeds, that is planting and exhaustion prevents a patentee from controlling the use of a patented product following an authorized sale.

Another argument made by Mr Bowman was, “seeds are special” according to which, “it was the planted soybean, not Bowman himself, that made replicas of Monsanto’s patented invention.

Judgment

Looking into doctrine of exhaustion, the court observed that the doctrine of patent exhaustion limits a patentee’s right to control what others can do with an article embodying or containing an invention. Under the doctrine, “the initial authorized sale of a patented item terminates all patent rights to that item.”[1] The court stating the purpose of the doctrine enunciated “the purpose of the patent law is fulfilled with respect to any particular article when the patentee has received his reward . . . by the sale of the article”; once that “purpose is realized the patent law affords no basis for restraining the use and enjoyment of the thing sold.”

So, the doctrine restricts a patentee’s rights only as to the “particular article” sold, it leaves untouched the patentee’s ability to prevent a buyer from making new copies of the patented item.

According to the court, the application of the exhaustion has been limited so that the patentee retains an undiminished right to prohibit others from making the thing his patent protects.[2]

If the purchaser is allowed to make copies of patented article then what would patentee be left with? This would imply that the patent would effectively protect the invention for just a single sale!

The patent law provides monopoly right to the holder for a limited time. If anyone who purchases the patented article is allowed to replace it, obviously the competitors would also make copies of the same and there would be no monopoly and thus, no incentive for the creators.

Following J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc.[3] the court stated that seeds and plants are patentable and Plant Variety Protection Act does not repeal the Patent Act’s coverage.

Second argument was also rejected by the court saying that Mr Bowman was not passively watching the seeds growing; he was the one who harvested crop eight times. He devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium.

Decision

The court held that the Mr Bowman, by making replicas of patented seeds of Monsanto, has deprived the company of its reward which patent law provides and patent exhaustion provides no heaven or such conduct.

Analysis

The judgment of the Court is totally on the line of patent law and I agree with the reasoning of the court.

Since, patent rights have been considered as strong monopoly rights as compared to any other intellectual property rights, so some exceptions have been made in public interest to serve the social purposes.

These exceptions ensure that the rights granted are not used prejudicially to the interest of the public. Doctrine of patent exhaustion is one of these exceptions which allow the purchaser to use the purchased article in any manner, but this exception has its own boundaries that the use should not be prejudicial to the interest of the patent owner.

TRIPS Agreement states the three step test where the exceptions are made against the rights of patent holders. The three steps are:

  •  Exceptions are limited.
  •  There should be no unreasonable interference with the normal exploitation of the patent.
  •  There should be no unreasonable prejudice to the legitimate interest of patent owner.

In this case, if Mr. Bowman or any other purchaser would have been allowed to make copy of the patented seeds which were purchased legally, then the right of the Monsanto to “make” under Section 35 U. S. C. §154(a)(1)Patent Act would have been infringed and this would given rise to a situation where nobody would buy seeds from Monsanto since they could grow the seeds, leaving Monsanto with no award for its invention which is the object of patent law.

The court has limited the holding to the facts of the case only as it observed that the doctrine of patent exhaustion would apply in circumstances where the article’s self-replication might get out of purchaser’s control or might be incidental in using the article itself.

If we see this case under the Indian law, the result will be totally different. As a signatory to TRIPS, India has incorporated patent law but as far as plant varieties are concerned Article 27.3 provides that a member state can either make it a patentable subject matter or may protect it under sui generis system. India has opted for sui generis system and has enacted Protection of Plant Varieties and Farmers Right Act, 2001, keeping in mind the economical and social situations of the country. So Indian law provides the two important flexibilities:

–          seeds and plant varieties are not patentable in India.

–          Section 39 of PPVF Act, 2001 provides for “Farmer’s Rights” and allows the farmers to re-sow the seeds.

[1]Quanta Computer, Inc. v. LG Electronics, Inc.,553 U. S. 617, 625 (2008)

[2]Cotton-Tie Co. v. Simmons, 106 U. S. 89, 93-94 (1882)

[3]534 U. S. 124 (2001)

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