On September 4, 2002, the Federal Court of Appeal delivered its judgment in Percy Schmeiser and Schmeiser Enterprises Ltd. v. Monsanto Canada Inc. and Monsanto Company (Neutral Citation 2002 FCA 309). This judgment, affirming the judgment of the Trial Division of the Federal Court, is an important early indication of how biotechnology patents will be interpreted by the Canadian courts, particularly patents concerning plant biotechnology.
This case involved an action for patent infringement brought by Monsanto against Percy Schmeiser, a Saskatchewan canola farmer, for infringement of Monsanto's Canadian Patent No. 1,313,830 entitled "Glyphosate-Resistant Plants" (the "'830 patent").
For many years, Monsanto has sold glyphosate herbicides under the trademark "Roundup." The '830 patent concerns a technology wherein a chimeric glyphosate resistance gene is introduced into plant cells, with the result that plants grown from such cells are resistant to glyphosate herbicides such as Roundup. Monsanto identifies such glyphosate resistant plants and their seeds with the trademark "Roundup Ready." Crops of Roundup Ready plants, such as canola, may be safely sprayed with Roundup herbicide after the crop has emerged, so that non-glyphosate resistant plants such as weeds are killed, without harming the crop of interest. The '830 patent contains claims directed to chimeric plant genes encoding a polypeptide that enhances glyphosate resistance in a plant, and claims drawn to glyphosate-resistant plant cells containing these chimeric plant genes.
In 1997, Mr. Schmeiser sprayed Roundup herbicide around power poles and in ditches bordering his canola fields, with a view to killing weeds and volunteer canola plants. Several days after spraying, it was noticed that many of the canola plants had survived the spraying. In an attempt to determine why the plants had survived, Mr. Schmeiser sprayed approximately three acres of one of his canola fields with Roundup, and found that about 60% of the plants survived. Seed from these Roundup tolerant canola plants was combined with other canola seed, and used by Mr. Schmeiser to plant his entire 1998 canola crop.
At trial, it was held that the growing and selling of the 1998 Roundup tolerant canola crop constituted infringement of the '830 patent. The Court awarded Monsanto typical remedies for patent infringement, including an accounting for profits made by Mr. Schmeiser, an injunction and an order for delivery up to Monsanto of infringing plants and seeds.
On appeal, the Federal Court of Appeal affirmed the judgment and remedies granted at trial, and addressed various arguments raised by Mr. Schmeiser.
Mr. Schmeiser argued that the '830 patent was only infringed if the Roundup Ready crop actually was sprayed with the Roundup herbicide, which Mr. Schmeiser had not done. The Court of Appeal found that the claims contained no limitation requiring the use of a glyphosate herbicide such as Roundup, and that this step was not a requirement of the claims.
Mr. Schmeiser also argued that Monsanto, by permitting farmers to plant Roundup Ready canola without taking steps to prevent the Roundup Ready canola from escaping and contaminating other farmers' fields (e.g. by the movement of pollen or accidental spillage of seed), had waived its rights under the '830 patent. This argument was rejected. The trial judge found, and the Court of Appeal affirmed, that Monsanto, through its licensing arrangements and monitoring efforts, had taken various measures to control the unwanted spread of Roundup Ready canola. The Court of Appeal therefore found that there was no express waiver by Monsanto of its patent rights, and none could be implied from the company's conduct.
Mr. Schmeiser's most compelling arguments were that the Roundup Ready canola had come onto his property without his knowledge or agreement and therefore no infringement could be found because he had taken no steps to cause glyphosate resistant canola plants to grow on or adjacent to his property. These arguments were rejected on the evidence regarding Mr. Schmeiser's identification of Roundup Ready canola in 1997, deliberately saving seed from it, and using that seed to plant his crop for 1998. On these facts, there was no question of lack of intent, or any possible "innocent infringer" defense.
However, the Federal Court of Appeal did, in what must be considered obiter dicta, find some merit in Mr. Schmeiser's arguments, even though they were not applicable to the facts of the case. The Court acknowledged that it has often been stated that intention is not material to a finding of infringement. But the Court suggested that the invention claimed in Monsanto's '830 patent fell into a novel category, on the basis that a patented invention in a living plant is self-propagating without human intervention. Such plants could come onto a person's land and be propagated there without his knowledge. Moreover, that person could become aware of the properties of the plant, and tolerate its continued presence on his land, without doing anything to cause or promote the propagation of the plant or its progeny. The Court considered that the lack of intention of the alleged infringer in such circumstances might be relevant.
The Court of Appeal was unpersuaded by Mr. Schmeiser's additional argument that as the owner of real property, he had legal title to plants found growing on his land, the right to save seed from such a plant, and to harvest the seed for profit in subsequent years. The Court found that property rights do not displace patent rights.
It seems that throughout this litigation, Mr. Schmeiser's arguments went largely to broad questions of fairness, and were not confined to the typical defenses in a patent infringement action. These arguments proved to be unsustainable on the facts, the Court finding, both at trial and on appeal, that Mr. Schmeiser had knowingly saved Roundup Ready canola seed, planted it the following year, and subsequently sold the resulting crop.