Before 1980, the idea of patenting living organisms was unfamiliar. However, the advent of biotechnology has promoted interest in patenting life forms. In 1980, the United States Supreme Court ruled that a genetically modified bacterium is patentable, and the Canadian Patent Office followed suit in 1982 in a case dealing with a microbial culture system composed of different forms of yeasts. The scope of living organisms protectable under the patent scheme has been expanded since then.
Many countries, including the United States, now allow patent protections to genetically modified plants and seeds (“GM plants”). Cultivation of GM plants has been widely adopted by farmers, mainly due to its convenience and cost-effectiveness.
GM plants have been grown commercially since 1996, and the global area of their cultivation has continued to increase at an annual rate of about 8 per cent, reaching 160 million hectares (or 395 million acres) in 2011. In other words, more than 7 per cent of the total cultivated land area of the earth is now covered by GM plants. Their estimated market value was about US$13.3 billion in 2011, which is relatively large when compared to the estimated value of the global crop protection market of US$59.6 billion in the same year.
Genetically engineered soybeans with herbicide resistance have been the most widely and rapidly adopted GM plants, followed by insect-resistant corn and cotton. Revenues from the sale of seeds of these three major crops were estimated at over US$6 billion in the U.S. alone in 2008. As such, the stakes in protecting the rights to new plant varieties or related technology under the patent law scheme have become very high.
In a recent case in the U.S., Monsanto and DuPont, the two giants in the seed industry, argued over Monsanto’s U.S. patent concerning a herbicide resistance trait. In the result, Monsanto was awarded $1 billion, resulting in an increase in Monsanto’s share price on the stock market.
Monsanto owned the so-called “Roundup Ready technology” based on a herbicide-resistant trait that constituted subject matter of the U.S. patent in question. GM plants to which the technology was applied could tolerate spraying a non-selective herbicide, glyphosate, which was originally developed by Monsanto. In a contract, Monsanto gave the right to use its patented trait to DuPont. DuPont used the trait, in combination with other genetic traits such as an insect resistance, in the development of new varieties of soybeans and corn. The U.S. court found that use of Monsanto’s patented trait in such a “stacking” manner was impliedly prohibited by the contract, leading to the US$1 billion verdict.
The decision has implications not only in the U.S. but also in Canada. Over 90 per cent of world’s GM plants are grown in five major countries, and Canada is one of them together with the U.S., Argentina, Brazil and India. Considering the fact that 82% of cotton, 75% of soybeans, 32% of corn, and 26% of canola planted globally were reportedly GM plants in 2011, the importance of protecting rights for new plant varieties in Canada, one of the largest producers of GM plants, is self-evident. It is noteworthy that about 70 per cent of food sold in Canada is said to include genetically modified ingredients from such common crops as corn, soybean, and canola.
The market potential is only growing. With new technologies emerging, a further market expansion in the area of GM plants is expected. For example, commercialization of drought-tolerant corn is expected in 2013 and so-called “Golden Rice” (nutrient-enriched rice) in 2013 or 2014.
However, GM plants are not patentable per se in Canada. The Canadian Patent Office takes the position that while “lower life forms” such as a single cells, cell clusters (e.g., molds, yeasts) and cell lines (e.g., hybridomas) are patentable, “higher life forms” such as plants are not. In Canada, plant varieties that are distinct, uniform and stable may instead be protected under the Plant Breeders' Rights Act administered by the Canadian Food Inspection Agency. This is different from the approach in the U.S., where intact plants are patentable.
Nevertheless, there are ways to take advantage of patent protection to higher life forms such as plants in Canada.
In 1985, Harvard College filed a Canadian patent application relating to a transgenic mouse predisposed to develop cancerous tumors. The Supreme Court of Canada ruled in 2002 that the transgenic mouse, a higher life form, was not patentable. However, the Court allowed claims directed to the method of genetic modification employed to produce the mouse, which involved modern molecular biology techniques.
Therefore, processes or methods used to produce a new plant may be patentable, such that a new plant variety can be protected by a patent protecting methods for its production. It should be noted, however, that the Patent Office routinely declines patent applications for methods for traditional (i.e., non biotechnological) cross-breeding.
Also, the Court allowed a claim directed to the use of the genetically modified mouse for testing materials suspected of being carcinogens. Therefore, the use of a new plant variety or its seeds may be patentable. The holder of a patent directed to the use of a plant variety may be able to effectively secure exclusive rights with regard to that plant variety, as the “use” could possibly include any use, such as growing, harvesting or distributing the seeds or the plant.
In 2004, the Supreme Court of Canada ruled in another case that canola farmer Percy Schmeiser infringed Monsanto’s patent for genetically modified plant genes and for cells containing the genes by collecting, saving and planting seeds containing the genes and cells. The Court concluded that although Schmeiser had not made the gene or the cell, he had nevertheless used the claimed subject matter.
As a patent for a plant cell or a gene can prevent a third party from growing, harvesting or distributing the seeds or plants containing the protected cell or gene, the effect of the decision is that a patent to a gene or a cell can be akin to providing patent protection for the plant itself.
In summary, even though the Supreme Court of Canada has held that a “higher life form” is not patentable, it has nevertheless opened up several indirect routes to protecting new plant varieties: through claims directed to methods for producing such plants, claims directed to the use of such plants, or claims directed to the genetically modified genes or cells. Early patent applications in Canada in relation with new plant varieties would help leverage the forthcoming market opportunity.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.