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page 58 Lab Times Biobusiness 5-2010 Putting a Damper on Monsanto After a patent infringement lawsuit between Monsanto and several seed importers, the European Court of Justice has limited Monsanto’s patent rights over glyphosate tolerant plants. The judges argued that a patented DNA sequence which is presently incapable of performing the function for which it was patented is not protected. T he US-based biotechnology company Monsanto (St. Louis, Missouri) is not only well-known for its genetically engineered seeds, but also for its aggressive commercialization and trigger-finger approach to litigation. Monsanto has filed patent infringement lawsuits against many farmers in Canada and the USA, often because of the farmers’ sale of seed containing Monsanto’s patented genes. A very wellknown case was the “Monsanto Canada Inc. vs. Schmeiser” incident, dealing with putative patent infringement and the question of whether it is legal that farmers sell seed containing Monsanto’s patented genes. This issue was ruled in favor of Monsanto in 2004 by the Canadian Supreme Court, emphasising that, “cultivating a plant containing a patented gene and composed of patented cells without license” is not allowed (in 2008, Monsanto and the same farmer, Percy Schmeiser, settled amicably in a “follow-up” lawsuit, arranging that the US group has to remove unwanted genetically engineered (GE) seed from farmers’ fields). herbicidal action of glyphosate is based on an inhibition of the plant enzyme 5-enolpyruvylshikimate-3-phosphate synthetase (EPSPS), which is involved in the biosynthesis of the aromatic amino acids phenylalanine, tryptophan and tyrosine via the so-called shikimate pathway. This glyphosate action is lethal for plants. However, animals do not have the shikimate pathway, so the direct toxicity of glyphosate to them is relatively low. Some microorganisms such as the Agrobacterium strain CP4 have a version of EPSPS that is resistant to glyphosate inhibition. On the basis of the isolated and cloned genes coding such glyphosate resistant EPSPS, Monsanto developed and patented genetically engineered crops which are glyphosate tolerant. The seed of these crops grow into “Roundup Ready” crops, i.e. crops which allow farmers to apply glyphosate as a so-called post-emergence herbicide without killing the crops. Post emergent weed control is a herbicide used to kill weeds after they have germinated or emerged from the soil. To do this, the weed must be actively growing and not just green. Aggressive behaviour Monsanto’s frequent involvement in high profile lawsuits with other well-known companies, such as Syngenta, and even the US government, and a recent investigation into its business behavior by the US Department of Justice has made the company controversial around the world and a primary target of environmental activists. Monsanto is the world’s leading manufacturer of the broad-spectrum systemic herbicide glyphosate (IUPAC name: N-(phosphonomethyl) glycine), which Monsanto developed and patented in the 1970s. Glyphosate is sold under the trademark „Roundup“ and appears to be the most used herbicide in the world. The Profitable package deal Current Roundup Ready crops include, for example, canola, cotton, maize and soy. For Monsanto the “package deal” of selling Roundup Ready crops in combination with the Roundup herbicide is very profitable, and all the more so since Monsanto’s licensing agreements forbid seed-saving, the old farming practice of keeping seed from one crop to plant another. Thus, farmers are forced to buy new genetically modified seed for the next spring’s sowing. With its decision number C-428/08 the European Court of Justice has now put a damper on Monsanto’s genetically modified seed exploitation and enforcement tactics. Since 1996 Monsanto has owned European patent EP 0 546 090, essentially claiming a gene that encodes a new class of glyphosate tolerant and highly efficient EPSPS enzymes from special Agrobacterium, Achromobacter and Pseudomonas strains. The patent also protects glyphosate tolerant plant cells containing said gene. Monsanto has inter alia introduced this gene into the genome of soybean plants where it encodes the glyphosate resistant EPSPS enzyme and makes the soybeans tolerant of the Roundup herbicide. “Roundup Ready” soybeans are cultivated on a very large scale in Argentina, where Monsanto has no patent protection. Moreover, Argentina is one of the world’s leading soybean exporters, and the European Union, particularly the Netherlands, is one of the biggest importers. So a billion dollar business is at stake. A billion dollar business at stake The Dutch companies Cefetra BV, Cefetra Feed Service BV, Cefetra Future BV and the German company Alfred C. Toepfer International GmbH trade in soybean flour. In 2005 and 2006 three shipments of soybean flour arrived at Amsterdam harbour. The customs formalities were managed by Dutch company Vopak Agencies Rotterdam BV. Based on European Council Regulation (EC) No 1383/2003, “concerning customs action against goods suspected of infringing certain intellectual property rights and measures to be taken against goods found to have infringed such rights” Monsanto requested that customs suspend the release of the three shipments and to take samples for analysis. After investigation, DNA traces were found which are characteristic of the patented Roundup Ready soybeans, proving that the flour was produced from this type of protected bean. Image: MirekP/istockphoto “Protecting” DNA sequences Monsanto then filed a patent infringement lawsuit against the importers with the Rechtbank’s Gravenhage, a first instance court in The Hague, Netherlands. The political ramifications of this case were reflected by the official intervention of the State of Argentina on the side of the defendants. Monsanto argued that their product claims directed to a DNA sequence or gene confer “absolute protection”. This means that any unauthorized use, including the making, stocking, offering, selling or importing of the patented product is prohibited. This is a general regulation found in the patent law of many European countries and also in the Dutch Patent Act. Accordingly, in Monsanto’s view, the import of processed soybean flour comprising the patented DNA sequence would be patent infringement. Conferring absolute protection? On the other side, the defendants argued that Article 9 of the EU Biotech Directive (Directive 98/44/EC of the European Parliament and of the Council of 6th July 1998 on the legal protection of biotechnological inventions), which has been implemented into Dutch patent law, states that, “the protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material ... in which the product is incorporated and in which the genetic information is contained and performs its function.” This provision of the EU Biotech Directive would be lex specialis, i.e. governing a specific subject matter and therefore, as doctrine dictates, superseding general national provisions. The EU Biotech Directive was intended to harmonize the laws of EU member states regarding the patentability of biotechnological inventions. The defendants argued that, since soybean flour is inviable material after its processing, the patented DNA sequence present in the soybean flour is incapable of expressing the EPSPS enzyme for conferring glyphosate tolerance to plants, and is thus unprotectable under Article 9. Monsanto countered that the EU Biotech Directive is not intended to limit the scope of protection for biotechnological inventions, and that it is sufficient that the patented DNA sequence has exercised its function (namely coding glyphosate resistant EPSPS enzyme in the soybean plant) or that the DNA sequence, should it be isolated from the soybean flour, can be incorporated into the cells of a soybean plant and can then once again exercise its function. 5-2010 The Dutch court found this Article 9 argument important, and referred the question to the European Court of Justice, the highest judicial body of the European Union, for a preliminary ruling on whether import into Europe of soybean flour containing the patent protected DNA sequence constitutes an infringement of Monsanto’s European patent. “A mere sequence is not patentable” Lab Times page 59 to patents predating the EU’s adoption of the Directive in 1998 (Monsanto’s patent was granted in 1996). This means that the above limitations of the Biotech Directive regarding the scope of protection of patented DNA sequences are applicable to all patents, regardless of when they were granted. And since the European Court of Justice is the highest court of the European Union, the decision cannot be appealed. So the last word on this subject has been spoken. The decision will have significant consequences for businesses dealing in genetically modified plants. It will be possible to grow genetically modified crops in a country where the respective gene is not protected. If the crops are then imported into the EU in a processed inviable form so that the gene cannot perform its patented function, such import would not constitute a patent infringement. Monsanto, the Cefetra companies and Alfred C. Toepfer International finally reached an out of court settlement. Michael Schneider In brief, the European Court of Justice held that the EU Biotech Directive provides that a mere DNA sequence without indication of a function does not contain any technical information. Therefore, it is not a patentable invention. In addition, the Directive provides under Article 9 that the protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material in which the product is incorporated and in which the genetic information is contained and performs its function. From this, the Court concluded that a patented DNA sequence which is presently incapable of performing the function for which it was patented is not protected. Since Monsanto’s patented DNA sequence is contained in soybean flour, which is inviable material after its processing, and therefore presently cannot confer glyphosate (Roundup) resistance upon a plant, it is not protected. Thus, the Court followed the arguments of the defendants, and the similar final submissions of Attorney General Paolo Mengozzi. The Court further held that the EU Biotech Directive takes priority over national The European law, so that individual Court of Justice has EU member states canlimited Monsanto’s not permit patenting rights on patented of any DNA sequences DNA sequences. per se in their national legislation. It also held that the Directive’s provisions against patenting DNA sequences per se applies retroactively Photo: zxcynosure/istockphoto Biobusiness