ISIS Press Release 17/07/04
Questions over Schmeiser’s Ruling
Percy Schmeiser’s battle with the GM giant Monsanto came to an
end with the recent Supreme Court ruling, but what does it really mean?
Lim Li Ching raises key
questions
The
sources for this
article are posted on ISIS members’ website.
Details here.
Schmeiser vs Monsanto
The Supreme Court of Canada has upheld the lower courts’ rulings
that Percy Schmeiser infringed Monsanto’s patent on the transgene that
confers resistance to glyphosate herbicides such as Roundup. The judgement, by
a narrow 5-4 margin in favour, was given on 21 May 2004. It marked the end of
an uphill legal battle for the Saskatchewan farmer.
In 1998, Monsanto brought Schmeiser to court, alleging that he had
planted and reproduced canola seeds and plants containing genes and cells
claimed in its patent, and had sold the harvest, without consent or licence
(see "Schmeiser’s battle for the seed",
SiS 19).
Schmeiser, a seed developer and seed saver, argued in his defence that he had
merely planted his fields with seed saved from the previous year, and that his
crops must have been contaminated by Roundup transgenes.
The judge ruled in Monsanto’s favour in March 2001, finding that
Schmeiser had in 1998, planted without licence, canola fields with seed saved
from the 1997 crop, which "he knew, or ought to have known", was Roundup
tolerant. The crop, when tested, did contain the gene and cells claimed in
Monsanto’s patent. But, "the source of the Roundup resistant canola…
is really not significant for the resolution of… infringement". Thus, a
farmer whose field contains seed or plants originating from seed spilled or
blown into them, in swaths from a neighbour’s land or from germination by
pollen carried by insects, birds or wind, does not have the right to use the
patented gene, or the seed or plant it is in, the judge said.
Schmeiser was ordered to pay Monsanto its court costs and the profit
from his 1998 canola crop, amounting to approximately Canadian $175,000.
Schmeiser appealed, but all three judges of the Federal Court of Appeal ruled
against him in May 2002.
Split decision
This latest appeal, brought to the highest court in Canada, resulted in
a split decision: five to four. While the judges agreed that higher life forms,
including plants, cannot be patented, the majority (by one) found Schmeiser
guilty of patent infringement, but the minority held that patented genes should
not grant exclusive rights over the plant in which it occurs.
The judges unanimously set aside the crop profits that Schmeiser had
been earlier ordered to pay Monsanto. This was because his profits were
"precisely what they would have been had [he] planted and harvested ordinary
canola". Nor did he gain any advantage from the herbicide resistant nature of
the crop, as he didn’t spray Roundup to reduce weeds.
Furthermore, the judges concluded that he should not pay Monsanto’s
legal bills, a considerable sum accumulated over the years. The
‘loser’ of a case is usually obliged to absorb the legal costs of the
‘winner’. In this case, each party had to bear their own costs.
These findings were a personal victory for Schmeiser and his wife, who
had spent the last seven years and much of their own resources to fight their
case.
‘Expansive’ patent
Five of the nine judges said that Monsanto’s patent was valid
irrespective of whether protection for the gene and cells extends to activities
involving the plant. Although Monsanto only claims protection for the genes and
cells, "a purposive construction of the patent claims recognizes that the
invention will be practised in plants regenerated from the patented
cells…"
As the trial judge’s findings that Schmeiser saved, planted,
harvested and sold the crop containing the patented gene and cells were
uncontested (although the original plants came onto his land without his
intervention), the issue was whether this amounted to "use" of patented
material. According to the five judges who found Schmeiser guilty of infringing
Monsanto’s patent, the acts of saving and planting the seed, then
harvesting and selling plants containing the patented cells and genes,
constituted "utilization" of the patented material.
Furthermore, by cultivating the canola without license, Schmeiser was
deemed to have "deprived [Monsanto] of the full enjoyment of the monopoly".
The five judges maintained that infringement does not require use of the
gene or cell in isolation. They also said that Schmeiser had failed to rebut
the presumption of use, as he had actively cultivated Roundup Ready canola as
part of his business operations. They maintained that infringement does not
require the use of Roundup, to account for the "stand-by" utility of the
herbicide tolerant trait (i.e. whether or not a farmer sprays Roundup,
cultivating Roundup Ready canola means that the farmer may in future
spray and benefit).
The presence of one patented gene thus in effect confers control over
the entire plant, something that Monsanto cannot actually patent. In so
accepting this "expansive" conception of patents, the five judges seem to
contradict their own 2002 decision, which saw the Supreme Court ruling that
higher life forms cannot be patented in Canada (see "Canada rejects patents on
higher life forms", SiS 19). Now, 18
months later, these judges ruled that higher life forms containing a single
patented gene are effectively the property of the owner of the single patented
gene. These two diametrically opposed positions are difficult to reconcile.
Dissenting view
In contrast, the four dissenting judges used the Supreme Court decision
that plants, as higher life forms, are not patentable, to argue that
Monsanto’s patent claims over the transgene and cells, while valid, should
not "grant exclusive rights over the plant and all of its offspring". In short,
they argued that Monsanto’s valid claims should be solely for genetically
modified (GM) genes and cells in the laboratory prior to regeneration, and for
the attendant process for making the GM plant.
Moreover, the Canadian patent explicitly limits protection to the
transgene and the cells containing it. By not including whole plants, seeds or
crops, the dissenting judges said that Monsanto had specifically disclaimed
plants in their patent, i.e. "what is not claimed is considered disclaimed". As
such, one could not reasonably expect patent protection to be "extended to
unpatentable plants and their offspring".
In the opinion of the minority, the appropriate test for determining
"use" is whether the patentee has been deprived of monopoly over the use of the
invention as construed in the claims, rather than whether the patentee
was deprived of the commercial benefits flowing from the invention. Applied
here, the question is whether Schmeiser had used Monsanto’s GM cells and
genes as they existed in the laboratory prior to differentiation and
propagation, or the GM process. Their answer was "no".
The dissenting judges said that the lower courts had erred not only in
construing the claims to extend to plants and seed, but also in construing
"use" to include the use of the plant, which is explicitly disclaimed by
Monsanto. Accordingly, they argued that cultivation of plants containing the
patented gene and cell does not constitute infringement, neither do those
plants have "stand-by" utility. To conclude otherwise would, in effect, confer
patent protection on the plant.
Uncertain implications
The court, while confirming the validity of Monsanto’s patent on
the transgene and modified cells, did not rule on the validity of patents on
life forms, or whether it is right or wise to genetically modify plants.
Neither did it answer the difficult questions about how GMOs can be controlled
once released. These issues will have to be addressed by Parliament.
The 2002 Supreme Court decision that higher life forms, such as plants,
are unpatentable still stands. Monsanto did not claim patent protection over a
GM plant, only the modified genes and cells and the process for making them.
However, the effect of this judgment is that Monsanto’s rights on a
patented gene and cells extend to the (unpatentable) plant in which it is
found, if the alleged infringer is judged to have used the patent; in
Schmeiser’s case, by saving, planting, harvesting and selling in a
commercial context.
A Canadian farmer’s right to save and use seeds generally should
not be inherently jeopardised by the decision. Even plant varieties protected
under the Plant Breeders’ Rights Act have an exemption, in that a
"farmers’ privilege" applies, allowing farmers to save and replant seeds
from a protected variety, on their own farm. (However, it does not allow
farmers to exchange or sell seeds of a protected variety.)
But how the Plant Breeders’ Rights Act interfaces with the Patent
Act in the light of this decision is unclear. Canada has ratified the 1978 Act
of the International Union for the Protection of New Varieties of Plants
(UPOV), which accepts that granting a plant breeders’ right on a given
variety implies that no patent can be granted to the same variety. What happens
when a patented gene inadvertently lands in (or is present in) a variety
protected under the Plant Breeders’ Rights Act, which allows farmers to
save seeds from that protected variety?
As canola pollen and seed are uncontainable, Monsanto could accuse
virtually any farmer of ‘infringement’, simply because virtually
every field is likely to inadvertently have plants bearing its patented genes.
However, contamination of plants by patented genes, by itself, will not
automatically be patent infringement in Canada. For the issue in
Schmeiser’s case was not the adventitious arrival of Monsanto’s GM
canola on his land. (The majority emphasized they were not considering the
innocent discovery by farmers of "blow-by" plants.) Rather, what were pivotal
were the acts of sowing and cultivation, so the conduct of farmers on
discovering unwanted GM crops in their fields will be crucial.
Will saving and planting seed containing a patented gene without
authorisation then be illegal? Perhaps, yes, if a farmer saves and reuses seed
they know to be contaminated by a patented gene, instead of informing the
company. Perhaps, no, if a farmer is able to rebut the presumption of use
arising from possession by showing that they never intended to cultivate plants
containing the patented material (e.g. quickly arranging for its removal). They
could prove that the presence of patented genes was accidental, by showing that
its concentration is consistent with that expected from unsolicited "blow-by"
plants.
But, what concentrations are judged as attributable to "blow-by" plants?
The decision is silent on this. Why does the burden of monitoring and reporting
fall on the farmer? The judgement forces everyone who does not sign a
technology-use agreement to accept responsibility for identifying contaminants
and reporting them. Failure to do so incurs liability, as it did for Schmeiser.
What about a plant that has more than one inadvertent patented gene? Such
plants already exist. Will farmers now have to report for every crop, every
company and every patented gene?
Furthermore, as the dissenting judges point out, it would be difficult
for a farmer to rebut the presumption of use once they become aware that a
plant containing patented genes was present - or likely to be present - on
their land and continued to practice traditional farming methods, such as
saving seed (as Schmeiser had done). They recommended that the complexities and
nuances of "innocent bystander protection" in the context of GM crops be
urgently considered by Parliament.
If a single contamination event contaminates self-saved seed, does this
make the seed saver a permanent infringer? Prof. Ann Clark of Guelph University
proposes that the only way to resolve this liability may be to destroy all the
seed as one cannot distinguish contaminated from uncontaminated seed without
spraying Roundup (in the case of herbicide tolerant genes), which itself kills
uncontaminated seed. But then, who should bear the costs?
What about contaminated certified seed? Companies already recognize that
it is impossible to segregate GM from non-GM seed and contamination has been
found in certified seed stocks. Who is liable when GM seed arrives in a bag of
non-GM seed?
What about patented genes and marker genes that are not genetically
modified? Marker-assisted breeding could identify genes for various traits, for
example, drought or salt tolerance, which exist naturally in local varieties.
And once identified, these markers could be patented. Does the Schmeiser
judgement mean that local varieties, selected through conventional plant
breeding and including the work of generations of farmers and seed savers,
would also come under the control of the patent holder of a gene, genetically
modified or otherwise?
The flip side, Monsanto’s responsibility for its uncontainable
technology, was not considered. Is Monsanto liable for contaminating the
farmers’ fields? Can the companies be held accountable for their
technology? The decision says nothing about these issues.
Already the Saskatchewan Organic Directorate’s Organic Agriculture
Protection Fund has supported certified organic farmers in taking legal action
to impose responsibility and hold biotech companies liable, for their patented
genes. They are seeking compensation for damages caused by contamination of
certified organic crops by Monsanto’s and Bayer’s herbicide tolerant
canola, clean-up costs, and an injunction to prevent commercialization of
Roundup Ready wheat if Monsanto tries to reintroduce it. This case is pending.
It seems that the Schmeiser judgement has raised more questions than it
answers, and by not addressing the full implications of the uncontainability of
patented genes, the judges have missed the point, and proliferated more
confusion.
Some positives
The fact that the court found that Monsanto was owed none of the value
of Schmeiser’s crop may, however, be an important counter to the finding
of patent infringement. Growing and re-growing contaminated seed may not oblige
a farmer to pay Monsanto anything, presuming that they are not benefiting from
the herbicide tolerant gene by spraying Roundup. The company now has nothing to
gain by taking such a farmer to court, so in effect, Monsanto’s
‘expansive’ patent may have lost some teeth against seed savers.
Monsanto had, in the past, threatened financial reprisals against
farmers for alleged patent infringement. Knowing that contamination is
unavoidable, wary farmers might have been persuaded to buy Monsanto’s seed
to avoid such charges. The present ruling that the company was owed nothing of
Schmeiser’s crop might make Monsanto think again before using such a
strategy of intimidation to expand its market.
Significantly, the case has exposed Monsanto’s unacceptable and
unnecessary behaviour toward Schmeiser and other farmers. As Ann Clark points
out, the other two companies (Bayer and Pioneer) that market herbicide tolerant
canola in Canada do not resort to the Patent Act to protect their intellectual
property nor prosecute farmers whose fields are inadvertently contaminated with
their patented genes. The dissenting judges also noted that Monsanto in any
case licenses the sale of seeds produced from the patented invention and
imposes contractual obligations (e.g. prohibiting seed saving) on the licensee.
Schmeiser raised awareness globally on many issues – GM crop
contamination, patents over living organisms, the need to protect farmers’
rights, and corporate control of our food and agriculture. He says, "This
ruling is an injustice", and many agree with him. The struggle now moves from
the courts to the political arena. The tide may yet turn.
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