Article By Neil Arney and David Barnard of Lathrop & Gage

A recent ruling eliminates any doubt about plant patent validity, and means farmers can expect to see more vigorous enforcement of patent rights, including infringement lawsuits.

The United States Supreme Court settled a longstanding debate about the enforceability of utility patents issued on plants in a landmark decision issued Dec. 10, 2001. The case was J.E.M. AG Supply Inc., d/b/a Farm Advantage Inc. et al. v. Pioneer Hi-Bred International Inc.

Pioneer holds utility patents covering several of its corn seed products, and places specific limitations on using its patented seed on license agreements attached as a tag to each seed bag

Pioneer sued J.E.M., its distributors and customers for patent infringement, based on J.E.M.’s unauthorized re-sale of Pioneer seed. J.E.M. countersued, alleging that Pioneer’s utility patents were all invalid because sexually reproducing plants are not patentable under the general utility patent statute.

The district court entered summary judgment for Pioneer, holding that patents were valid, and the Court of Appeals for the Federal Circuit affirmed. The Supreme Court also sided with Pioneer.

Both the Plant Patent Act of 1930 (PPA) and the Plant Variety Protection Act (PVPA) provide some protection for proprietary plants, but neither provides utility patents’ broad scope and remedies. The Pioneer decision will impact how farmers do business in several ways.

Prior to that decision, some argued that the PPA’s and PVPA’s plant-specific remedies indicated Congress did not intend to provide protection for plants under the general utility patent statute. Since 1985, however, the United States’ Patent and Trademark Office (PTO) has permitted utility patents on plants, issuing more than 1,800.
Anticipating the upholding of these plant patents, agricultural and biotech powerhouse Monsanto took a strong stance in recent years, pursuing more than 475 farmers for patent infringement. Forms of infringement included the violation of technology user agreements by saving seed, and unauthorized selling and trading of seed with other farmers.

The Supreme Court’s Pioneer decision confirms that plant utility patents are valid and enforceable. The ruling paves the way for further patent enforcement actions against infringing farmers.

Pioneer’s validation of plant utility patents closes several key loopholes available under the PPA. Though the PPA applies only to asexually reproduced plants, the Supreme Court has made clear that sexually and asexually reproducing plants may be protected with a utility patent.

The PVPA also contains several frequently relied-upon loopholes not applicable to utility patents:

  • There are exemptions for research and developing new hybrids.
  • The seed-saving provision is the most important PVPA exemption for many farmers. It allows farmers who grow protected varieties of seeds they have purchased to save some of what they grow for replanting without infringement.

None of these PVPA exemptions, however, apply to utility patents.

Farmers accustomed to saving seed or conducting cross-breeding research under PPA and PVPA exemptions now need to confirm that there is not a utility patent covering the seeds. They must be cognizant of potential liability risks from cross-pollination.

The prevalence of cross-pollination was publicized recently by incidents involving StarLink (R), a genetically engineered corn that has not been approved for human consumption. Many farmers indicated that their food crops were inadvertently contaminated with StarLink pollen from adjacent fields. Applying the StarLink scenario here, patent-protected pollen could contaminate non-patented crops, creating a risk of accidental infringement. Therefore, the safest practice will be to plant a licensed, protected variety to avoid patent-related concerns.

Farmers also will need to devote more attention to the review of licenses and technology user agreements issued by seed companies selling patented seeds. Some of these agreements contain exclusive venue provisions, which subject farmers to being sued in distant courts, typically the home forum of the patent owner.

Other provisions require binding arbitration as the sole method of dispute resolution, waiving the parties’ right to a jury trial. They also must give attention to limited warranty provisions, disclaimers, liability shifting provisions, etc., making the retention of skilled legal counsel advisable.

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