1. Intellectual Property & Biotechnology Drew L. Kershen Earl Sneed Centennial Professor Univ. of Oklahoma Law Center Copyright 2003, Drew L. Kershen, all rights reserved

2. Legal Foundation -- Fundamentals U.S. Const. Art. I, Sec. 8: “The Congress shall have the Power [cl. 8] To promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to the respective Writings and Discoveries.” Copyrights, Trademarks, Patents, Plant Variety Certificates – Trade Secrets – Geographical Designations Utility Patents (1791/1952); Plant Patents (asexual, 1930); Plant Variety Certificates (1970/1994) Diamond v. Chakrabarty (1980) (bacteria); J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l Inc. (2001) (inbred & hybrid corn) – utility patents Patents on living organisms Canada, European Union, UPOV (1961/1991), TRIPs/GATT of the World Trade Organization (WTO)

3. Policy Considerations IP provides incentive for private creativity and private investment Limited time – 20 yr for patent – to reward creativity and recoup research, development, commercialization costs Increase in public knowledge Monopoly – exclusive control, premium price Public research – public good, public knowledge – basic research - difficulties with funding, scope of creativity, commercialization Bayh-Dole Act (1980) – patents for publicly-funded research Univ. of California, Berkeley; Cornell Foundation Private-public partnerships – setting research agendas Trade Secrets – hybrids – confidential business information Legal system that protects property rights – clarity, security, enforcement – transforms paper rights into real world consequences

4. The IP Requirements for Plants Patent Act – novel, useful, non-obvious (prior art), enablement (written description understandable by skilled person) Process patents, product patents Product of nature; physical laws – contrast Chakrabarty’s bacteria Plant Variety Protection Act – new, distinct, uniform, stable, deposit of seed Research exception Farmer saved-seed exception

5. The IP System for Plants Patents are domestic law – no international patents – Patent Convention Treaty to protect date of application, to freeze prior art, to register intent – World Intellectual Property Organization, Geneva (WIPO) Market importance – Technological capacity Weak or non-existence IP laws and legal system Import limitations in the country granting the patent Regional treaties – EU, NAFTA Patent application to a Patent Examiner and Patent Appeals Timing of disclosure of application Protest of the patent – Interference Determination about subject matter and requirements Issuance of the patent –time extension for regulatory approval Patent presumption of validity but subject to private enforcement – right to sue for infringement – private litigation

6. Plant Research Intellectual Property component Identification of processes, products under non-expired patents Identification of owners/assignees Permission to use – licenses, royalties Tangible Property component Origin of the material being used or to be used -- Material Transfer Agreements (MTA) – permission, restrictions by contract Convention on Plant Genetic Resources – FAO Genetic resources are sovereign property – bio-piracy Prior informed consent Participation of affected stakeholders – indigenous knowledge Benefit sharing – monetary, technology transfer, capacity building Seed banks – CGIAR trust Freedom to Operate opinion Risk management – risk of infringement of IP Compliance with MTAs and CPGR

7. Infringement Actions As of November 15, 2003, eleven reported cases relating to utility patents and plants Nine involve Monsanto Co. – 8 U.S.; 1 Canada (Schmeiser) Two involve Pioneer Hi-bred Int’l Inc. Nov. 2003 -- Monsanto Co. reported approx. twenty-five lawsuits total -- Canada (2) and U.S. (23) – decisions, settlements, pending Allegation in Higginbotham v. Monsanto Co., an anti-trust lawsuit in Missouri that 475 lawsuits exist – no verification – Monsanto says has written approx. 500 letters Infringement actions PVPA infringement actions – Delta and Pine Land Co., Syngenta Plant Patent Act infringement actions Utility patents in non-biotechnology plants

8. Schmeiser v. Monsanto Co. (2001; 2002) Facts In 1997, Schmeiser spayed 3 acres of canola field with Roundup herbicide – 60% survived – separately harvested and stored the sprayed three acres – seed for 1998 crop came from the sprayed three acres Tests of 1998 crop from Monsanto samples, elevator samples, and Schmeiser samples showed 95-98%, 95-95%, 70% patented gene and plant cells from grow-out and DNA testing Legal Issue Source of the seed – Schmeiser contended that the 1997 three acres from pollen flow, spilled seed, or other sources of contamination Ruling – source irrelevant because in 1998 knew or should have know planting Round-up Ready Canola Cannot plant patented seed without permission of patentee

9. Schmeiser v. Monsanto Co Legal Issue Definition of use – Schmeiser did not use Round- up herbicide on 1998 crop – patent violated only if farmer uses Round-up herbicide Ruling – the patent infringement is the growing and selling of plants containing the patented genes and plant cells – the patent has nothing to do with the use or non- use of any particular herbicide Schmeiser case on appeal – Sup. Ct. of Canada Analogy – the straying bull

10. Monsanto Co. v. McFarling (2002) Facts: McFarling purchased Round-up Ready soybeans and signed Technology Use Agreement in 1997 Technology Use Agreement – payment of a license fee per bag – license authorizes crop for one season and prohibits saving seed for replanting or supplying seed to anyone for replanting McFarling did not dispute that he purposefully saved seed and replanted seed for the 1998 and 1999 crop years Legal Issue McFarling argued that prohibition on saved seed was a tying-arrangement prohibited by anti-trust laws Ruling – McFarling not tied to repurchase of RR soybeans – free to purchase any soybean seed – superior performance of RR soybeans resulting in desire to grow again is not tying arrangement

11. Monsanto Co. v. McFarling Legal Issue McFarling argued that contractual prohibition on saving seed violated the doctrines of patent exhaustion and first sale Ruling – Scope of the patent grant allows patentee to license only use of the patented product – patentee by contractual license can condition the authorization – the Technology Use Agreement specifically prohibited saving seed and authorized growth for a single season only for commercial sale as commodity soybeans

12. Monsanto Co. v. Trantham (2001) Facts Trantham purchased cottonseed from cotton gin for planting in 1999 – sprayed the planted cotton with Roundup herbicide – repeated the same process in 2000 – 93% of samples RR cotton Trantham purchased soybeans from an authorized dealer but did not sign the Technology Agreement – 100% of samples RR soybeans Legal Issues Trantham argued that the Technology Agreement violated the Sherman Anti-trust laws prohibiting monopolization and unreasonable restraint of trade Ruling – the technology agreement as a license does not violate the anti-trust laws – patent holders are entitled to a monopoly – technology agreement by itself sets forth legal restrictions Ruling – clauses prohibiting seed saving and charging a technology fee are not unreasonable restraints of trade based on argument that Monsanto markets RR soybeans without the restriction and fee in Argentina – Argentina does not allow patents on plants -- Monsanto’s different marketing strategy responds to different market conditions

13. Conclusion Plant researchers in research universities must be aware of intellectual property issues in their research Intellectual property laws and lawsuits affect and shape research plans and agendas Intellectual property and its impact on economic and social development will continue to be an arena of contested s social policy Ismael Serageldin, former chair CGIAR and VP of World Bank: “… if (patents) were to be stopped approximately 2/3 to 4/5 of the input to the total knowledge base could be lost.” ISB News Report (July 2002), Information Systems for Biotechnology, Virginia Tech

14. References A. Miller & M. Davis, Intellectual Property: Patents, Trademarks, and Copyright (3rd ed. 2000) [Nutshell series, West. Pub. Co.] Kinney & Lange, P.A., Intellectual Property Law for Business Lawyers (West Pub. Co., 1996, annual supp.) R. Schecter & J. Thomas, Hornbook on Intellectual Property: The Law of Copyrights, Patens and Trademarks (West Pub. Co., 2003) Drew Kershen, Of Straying Crops and Patent Rights, 43 Washburn L. J. --- (Summer 2004) (forthcoming) Oklahoma J. of Law & Technology, http://www.law.ou.edu ; click on Law Reviews – biotechnology patent project. http://www.law.ou.edu