© J. Straus 2002

Measures Necessary for the Balanced Co-Existence of Patents and Plant Breeders‘ Rights

- From a European Perspective –

Joseph Straus, Munich

WIPO-UPOV Symposium on the Co-Existence of Patents and PlantBreeders‘ Rights in the Promotion of Biotechnological Developments

Geneva, October 25, 2002

• Factual & Legal Anomaly of the Interface Issue in Europe

• Remarks on Patentability of Plants, Scope of Patent Protection

and its Limitations

• Measures for the „Balanced Co-Existence“ of Patents & PBRs

• Some Reflections on the Necessary Balance

© J. Straus 2002

© J. Straus 2002

EU VC investments in the Life Sciences sectors

0

500

1000

1500

2000

2500

3000

1995 1996 1997 1998 1999 2000 H1 2001

YEAR

mil

lio

ns

of

eu

ro

Biotechnology Medical/Health Agriculture

Fig. 2: Venture capital investments in the life sciences sectors in Europe.

VC investments in biotechnology and medical health increased steadily in recent years and are now at 3,5% and 5% of total investment respectively. The VC investments in the agri sector have strongly decreased from the mid 90s (2% of total VC investment) and now represent only 0.25% of total VC investment.

© J. Straus 2002

US „Experimental Use Defense“

“..., regardless of whether a particular institution or entity is

engaged in an endeavour for commercial gain, so long as the act

is in furtherance of the alleged infringer‘s legitimate business and

it is not solely for amusement, to satisfy idle curiosity, or for

strictly philosophical inquiry, the act does not qualify for the very

narrow and strictly limited experimental use defense. Moreover,

the profit or non-profit status of the user is not determinative.“

[US CAFC of October 3, 2002 – John M.J. Madey v. Duke University]

© J. Straus 2002

China a global leader in the field?

• Research work on over 50 plant species and more than 120 functional genes

• On some 700.000 hectars - compared with 2000 in 1997

• 90 % of field trials target insect and disease resistance

• Approved for commercialisation

– Cotton: insect resistance – reduced pesticide use by ~ 13 spraying (49.9kg/per hectare/season (i.e. $ 762 hectare/season))

– Tomato: virus resistance; Shelf-life altered

– Sweet pepper: virus resistance

– Petunia: colour altered

• Total benefits from the adoption of BT cotton in 1999 - $ 334 million

Huang et al., 295 Science 675 (2002)

© J. Straus 2002

Fig. 1: Field trials in Europe 1995-2001 E. Magnien

Annex 1: The agricultural sector in Europe: Field trials and venture capital investment between 1995-2001

© J. Straus 2002

International Mandatory Standards for Protecting Inventions in Plants

under TRIPS Agreement

• Patents must be available for inventions whether products (also

foodstuff, pharmaceuticals, etc.) or processes in all fields of

technology, provided the usual patentability requirements are met

• Members may exclude from patentability plants and essentially

biological processes for their production other than non-

biological and microbiological processes

• Members have to protect plant varieties either by patents or by an

effective sui generis system or by any combination thereof

• However: Plants have to be protected as direct products of

patented non-biological and microbiological processes.

© J. Straus 2002

Patentable under EU Directive 98/44 of July 98 –

New EPC Rules

• Biological material, i.e. material containing genetic information

and capable of self replication, or reproduction in a biological

system, isolated from its natural environment or produced by

means of a technical process even it it previously occurred in

nature

• Plants, if the technical feasibility of the invention is not confined

to a particular plant variety (plant varieties generally excluded)

© J. Straus 2002

EU Directive 98/44/EC - Scope of Protection

• Product protection on a biological material extends to:

– Any biological material derived from the patented one through propagation or multiplication in an identical or divergent form and possessing those same characteristics.

• Protection of a product containing/consisting of genetic information extends to

– All material in which the product (e.g. DNA sequence) is incorporated and in which the genetic information is contained and performs its function.

• Process protection extends to:

– Biological material directly obtained through that process

– To any other biological material derived from the directly obtained one through propagation or multiplication in an identical or divergent form and possessing those same characteristics

© J. Straus 2002

Limits of the Scope of Protection

Statutory Research Exemption Based on Article 27 (b) CPC

• Covers any use of patented material for its further development,

improvements, detection of further uses, etc. – even if in pursuit

of commercial interests [UK Court of Appeals – Monsanto v. Stauffer; BGH -

Clinical Trials I & II, confirmed by Federal Constitutional Court]

• Access to patented plant material secured through deposits in

publicly accessible depository institutions

© J. Straus 2002

Compulsory Cross-licensing

(EU Directive 98/44)

• If unsuccessfully applied for a contractual one,

• If the variety constitutes significant technical progress and if of

considerable economic interest

• Payment of an appropriate royalty

© J. Straus 2002

Balancing Measures to be Attempted

• In the U.S. and other laws without statutory „research exemption“

– introduction of such exemption clearly covering R & D activities

for developing new varieties of plants and plant germplasm in

general should be considered

• In Europe – with its not yet tested regime in practice – respective

clarifications should be envisaged

• In both systems rules of compulsory cross-licensing – i.e. of

patents and PBRs – either do not exist or are inadequate –

therefore in need of careful review based on empirical evidence

© J. Straus 2002

Some Reflections on the Necessary Balance

• Abelson‘s vision:

„Ultimately, the world will obtain most of its food, fuel, fibre, chemical feed stocks and some of its pharmaceuticals from genetically altered vegetation and trees.“ [279 Science 219 (1998)] requires:

• Equal treatment of those contributing generic inventions in plants and those breeding new varieties of plants

• Both groups necessitate and should have free access to protected germplasm for R & D activities for the production of new plant material and new varieties of plants

• All contributing must get a fair share in resulting benefits – free riding at the expense of others not tolerable and counter productive