For half a century international plant breeders’ rights have brought stability and security to the breeding sector. These rights have protected breeders against unauthorised breeding and marketing of propagation material by third parties while they could still freely use each other’s varieties for hybridisation purposes. However, now it seems that breeding rights are quickly having to make room for patents. These are not so much related to plant varieties as to accurately defined plant characteristics. While the exact impact remains to be seen, currently there is great concern. Supporters and opponents provide opinion and explanation.
The discussion about the advisability of patents on plant varieties or specific characteristics is by no means new. These were already carried out during the 1930s when breeders were looking for methods to protect their intellectual property. The crossing and selection of new varieties took much time and money and therefore it would not be fair for anyone to go ahead and propagate the newly developed varieties without having to pay a reasonable fee.
Even then, the long-existing patent law was a candidate for fulfilling this protection but it also had practical and substantive drawbacks. To skirt around these problems, breeders’ rights were introduced in the Netherlands under the Plant Breeders’ Rights Act of 1941. This gave plant breeders the opportunity to register varieties and for a certain period (in principle 25 years) gave them certain exclusivity in respect to their exploitation and, for agricultural crops, the right to a fee. There was no exclusivity with respect to breeding: Breeders could freely use each other’s varieties for cross-breeding purposes and freely commercialise the new varieties that resulted from that without having to pay a separate fee. Under the current plant breeders rights’ this was referred to as breeders’ or propagators’ exemption.
These plant breeders’ rights met the needs well and found international approval. Since 1961 the rights have been regulated internationally by UPOV (Union Internationale pour la Protection des Obtentions Végétales). The vast majority of countries have ratified the UPOV Convention, a result of which plant variety rights have been embedded into national legislation. Everyone happy, you would assume.
Rise of biotechnology
“The ratification was an important development,” says Niels Louwaars, director of Plantum, the Dutch trade association for breeding companies. “For plant breeding the plant breeders’ rights were and are a solid tool to protect intellectual property and to ensure the continuity of the breeding work. This is of great importance to the global society because plant breeding contributes to productivity and quality of cultivated crops and – via the crossing in of disease resistances and tolerances – to more sustainable production methods. Breeding has made an enormous technological development and has a lot of potential to adapt crops to future demands.”
With the emergence of biotechnology in the vegetable sector in the 1970s – which was derived from microbiological research where no plant breeders’ rights exist – came the urge to patent specific technology and its output, such as marker genes and analysis methods. The breeders’ rights tailored to complete varieties were in this case insufficient. The patent law did offer this possibility and gave specialised biotechnology companies, which do a lot of groundbreaking work, a greater sense of security. Nobody objected to this.
Genetically modified variety
In the late 1980s, the United States granted the first patent on a genetically modified variety of an agricultural crop. More followed but initially European breeders showed little concern. Under the European patent law it explicitly states that plant varieties are not eligible for a patent. In addition genetically modified crops (GMOs) could not enter Europe or many other countries and within this category the patenting of varieties would undoubtedly remain limited. The widely accepted thought was that you could not apply for a patent on natural organisms and their characteristics.
Plant characteristics patentable
“That was a wrong assumption we can conclude with hindsight,” says Louwaars. “In 1998 the European Patent Office Enlarged Board of Appeal made a judgement on the high profile Novartis case. In it was stated that, although plant varieties as such are not patentable, plants with a specific characteristic are. In addition, the characteristic does not have to be completely new, which you would expect from a patent. What was sufficient was a detailed description of the crop in question at genetic level. A company that does this first can in principle establish a patent.”
That has far-reaching consequences and led to a storm of reactions, from both inside and outside the sector. Ben Taks, managing director of breeding company Rijk Zwaan, De Lier, the Netherlands says: “From this ruling it follows that plant characteristics are patentable, also if plant varieties as a result fall under patent protection; the breeders exemption is then undermined because patent law doesn’t recognise such an exemption.”
One of the consequences was that plants or varieties with patented properties are no longer freely available for cross breeding purposes. For the commercialisation of a new variety with such a property a license has to be negotiated with the patent holder, even when the characteristic appears to have already been present in the propagation material held by the breeder. The patent holder can grant or deny a license at its own discretion. The security held for dozens of years was suddenly gone.
The implications of patent rights on plant characteristics and the erosion of breeders’ exemption has been discussed at branch level for many years. The clear supporters include mostly – but not exclusively – the big players in life sciences such as Bayer (Nunhems), Monsanto (including De Ruiter Seeds and Seminis) and Syngenta. Other companies such as Bejo Zaden and Rijk Zwaan emphasize the importance of the wide availability of biological material to all breeders.
“Opinions are divided, but the dividing line is not necessarily between larger and smaller players,” says Louwaars. “The fact remains that the patent law, as it is now interpreted according to the vast majority of our members and numerous organisations within the society, gives the patent holder a lot of influence. Therefore in 2009 Plantum took the standpoint that the breeding exemption should also apply to plants on which there is a patent.”
Various other organisations, such as German BDP and the European ESA, have also been critical and want plants that originate through regular plant breeding (crossing and selection) not to be patentable at all. In March 2015 the European Patent Office Enlarged Board of Appeal revealed that it did not share this view. The ruling confirmed that natural properties introduced by crossing remain in principle patentable.
‘Patent offers clarity’
It seems the cards have been dealt and that the supporters of a wide-operating patent law have the wind in their sails. According to Rolf Folkertsma and Daniël Engelmoer of Monsanto (De Ruiter Seeds) the actual and alleged consequences of the patent law should not be exaggerated. Patent scientist and evolutionary biologist Engelmoer crosses a bridge for the division in Europe between the geneticists who describe the properties and the lawyers that supervise the patent applications.
“We see clear benefits in the patenting of plant characteristics,” says Folkertsma. “Not only for ourselves, but also for the breeding sector as a whole.”
One important advantage, he points out, is that a patent on a characteristic, compared to breeders’ rights on a variety, offers much greater and faster clarity on an innovation. As soon as an application is filed the Patent Office makes it public. “This gives fellow businesses the chance to assess on time whether the innovation is also interesting for them,” says the plant pathologist. “If so, then in most cases you can take out a license and get started. Monsanto has built up a very good track record worldwide by both issuing as well as acquiring such licenses. We have absolutely no interest in systematically excluding other companies or to be excluded by others. Besides, an accurately described characteristic offers every company clues with which to develop similar alternatives outside the patent. We see that happening for example with ‘easy harvest broccoli’. It can occur that one of the competing programs ends up being more successful that our own. This happens over and over again and that is fine.”
Is a license required or not?
Colleague Engelmoer says that if the characteristic is already present in commercial material and therefore publicly available before a patent was applied for, even if the breeder did not know it, then no license needs to be issued.
“In fact, then the patent is probably invalid because the innovation is not new,” he says. “In the worst case he can use his breeding material that contains the characteristic so long as he doesn’t actively select for the characteristic which is described in the patent. If this characteristic was not publicly available at the time the patent was applied for then the breeder probably does need a license but this also depends on the conclusions of the patent.”
Success not guaranteed
A patent application is still no guarantee of success. The European Patent Office tests candidates critically and not every request is granted. Also anyone is free to challenge a request. In addition, the term of any patent – typically 20 years – starts at the time the application is submitted, emphasizes Folkertsma. He notes that the advancing technology and increasing capital investment go hand in hand with longer payback periods, while the product life cycle of varieties is becoming shorter rather than longer. “Patents and licenses offer more certainly over income than pure breeders’ rights and it is quite significant. However, you should also not overestimate this aspect. When a patented variety becomes commercial, sometimes the duration of the patent has already half expired.”
Even though the regulations are less severe than initially imagined, managing director Tax, of Rijk Zwaan, was and is against limiting the availability of biological material in the breeding sector. That does not mean that his company, like many supporters, has many named patents and has submitted many requests.
“Patents on plant characteristics are possible and it is asking for problems of continuity if the bigger players don’t build up their own position on patents,” he says. “It is up to the politicians to make a judgement on the European patent law which regulates. Business can take its own responsibility within the legal frameworks in the important sector of food supply to make sure there is open innovation.”
International Licensing Platform
In order to promote open innovation within the new reality imposed by the patent law, the International Licensing Platform (ILP) was founded recently by 11 vegetable breeding companies from Switzerland, Germany, Japan, France and the Netherlands. And yes – it included a number of renowned advocates of patent law.
“Actually Monsanto is the only player of note which eventually did not join, after long being part of the discussion,” says Tax, who is one of the driving forces behind its creation and who currently chairs the ILP-board. “We worked for four years on a functional system for supporters of open innovation in the vegetable sector. The associated companies have made a commitment and will not refuse to grant a license to each other on patents that protect biological material and will not ask more than a reasonable fee for these licenses. Any differences in opinion will be submitted to an Arbitration Commission. It is a voluntary system but it is not without obligations. Any breeding company may join and I’m glad we could welcome a new member last spring.”
It is too early to say if the ILP will live up to the expectations, recognises Tax. There is no particular reason why Monsanto remains for the time being on the sideline, says Folkertsma. “We see too few advantages compared with our current method of working,” he says. “The patent law also contains rules regarding misuse so there is no point in making unrealistic demands regarding the level of licenses.”
Plantum director Louwaars thinks that the market players, via the creation of the ILP, are demonstrating their responsibility. “Breeders have always needed more licenses than they can issue themselves. The ILP facilitates this because the mutual agreements prevent the abuse of dominant positions. But for a good balance between patent law and the needs of breeders two parties are needed. On one hand, you have the patent offices, which after an initial period of fast growth should raise the quality of patents that are granted. That can be achieved by making them more specific and narrower. On the other hand, the legislator has a big influence. When the balance still appears to be disturbed or when new insights arise on the grounds of ethical considerations, then it’s over to the politicians again.”
According to a decision by the European Patent Office, it remains possible to issue a patent on a plant characteristic that has been inbred through natural means. As a result such material can no longer be used freely for breeding purposes, which was previously possible based on the exemption for breeders. To achieve wider availability and to prevent the possible abuse of power by patent holders, a large number of vegetable breeders have made mutual agreements within the International Licensing Platform.
Text/photos: Jan van Staalduinen