FAR BEYOND the farm fields, high-stakes battles in the seed industry are taking place in courtrooms. High-profile legal filings between industry heavyweights put a new spotlight on ownership of valuable trait technologies.
Earlier this year, DuPont and BASF filed separate lawsuits on the same day, each accusing the other of patent infringement relating to herbicide tolerance technology. And Bayer and DuPont resolved outstanding legal and patent disputes between the two companies with the signing of a series of business agreements.
Also making headlines is a dispute between Monsanto and DuPont that centers on Pioneer's use of Monsanto's Roundup Ready trait. At issue is the use of the Roundup Ready trait in Pioneer's Optimum GAT trait. DuPont has stacked the Roundup Ready 1 trait in its forthcoming Optimum GAT soybeans. Monsanto contends that DuPont does not have the right to stack the two traits.
While the basic arguments may be over the specific language within a contract, other areas of law come into play.
“What these disputes come down to is an interpretation of patent law,” says Roger McEowen, professor of agricultural law at Iowa State University.
McEowen explains that the issue dates back to 1980, when the U.S. Supreme Court ruled that living things could be patented under general patent law so long as they satisfied the statutory criteria. The Court's language was sufficiently broad to suggest that even plants that could be protected under the Plant Patent Act or the Plant Variety Protection Act could be the object of a general utility patent. So seed companies do not have to solely rely on the Plant Patent Act or the Plant Variety Protection Act.
“But it has been a struggle for the courts to apply general utility patent law to plants. There are all kinds of litigation, all claiming that a patented product is not protected, or [the patent is] unenforceable, because it does not squarely fit under the statutory requirements of general utility patent law,” McEowen says. “And this argument plays into contract disputes because if there is a dispute regarding the use of licensed seed technology that is patented, the contract's language is also up for debate.”
There is a tremendous amount of money at stake, and each company wants to protect its position.
Phil Miller, vice president of U.S. product management for Monsanto, says no company wants to go to court. “It's costly and time-consuming. But in order to justify the substantial investment necessary to continue to bring farmers innovative products, companies like Monsanto need to protect their inventions by enforcing their contract agreements and patents.”
Court battles among the various trait providers seeking to protect their intellectual property rights are nothing new. “There has been litigation for several years,” says Ben Kaehler, commercial leader, Seed Affiliates and Trait Licensing for Dow AgroSciences. “But there will also continue to be cross-licensing, codevelopment and other cooperative technology arrangements that bring growers valuable innovations if there is mutual benefit.”
Where the law struggles, McEowen says, is with the definition of “invention” when it comes to plants. “When you talk about hybrid lines, breeding processes, and living organisms, these things are not the typical man-made invention that tends to fit well within the confines of patent law,” he says. “And the courts have sometimes had a hard time in determining where and how plants and germplasm fit under the statute.”
It may take Congress to specifically define what is patentable and what is not under section 101 of the general patent law.
“What the Monsanto and DuPont issue comes down to is whether DuPont can stack on top of [a] Monsanto [product] using its existing license. It's a very technical question that will be decided by the courts,” McEowen says.
These disputes remain very technical issues that have not yet affected the market. “Until producers see a change at the retail level, it will remain an esoteric issue that lawyers for seed companies will battle out,” McEowen says. “And it's always possible that some sort of settlement will be reached, because it is incredibly expensive to go to court.”