report future of seed en

8/6/2019 Report Future of Seed En

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The future of seeds and food

under the growing threat ofpatents andmarket concentration

Christoph Then & Ruth Tippe, April 2009

Written for the international coalition of no patents on seeds, www.no-patents-on-seeds.org

In collaboration with: Tina Goethe, Francois Meienberg, TeshomeHunduma, Mute Schimpf, Bell Batta Thorheim

Editing: Alejandra Gochez, Layout: Berne Declaration

This report was published by:


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ContentsContents ________________________________________________________________________2

Summary ________________________________________________________________________3

1. Introduction: history and evolution of patents at the EPO ________________________5

2. Concentration of the seed market_______________________________________________7

2.1 Effects of seed market concentration on pricing _____________________________________ 7

2.2 Impacts on farmers_______________________________________________________________ 8

2.3 Monsanto in antitrust procedures_________________________________________________ 11

3. Patents in conventional plant breeding _________________________________________14

3.1 Overall trends in plant breeding __________________________________________________ 14

3.2 An overview of patent applications in conventional breeding________________________ 15

3.3 Categories of patent applications and technologies used_____________________________ 16

3.4 An overview on granted patents __________________________________________________ 17

3.5 Some possible impacts of patents on traditional breeding ___________________________ 18

4. Examples of patents __________________________________________________________20

4.1 Basic methods in breeding _______________________________________________________ 20

4.1.1 Patent applications on basic breeding methods_________________________________ 20

4.1.2 European patents granted on basic methods in breeding ________________________ 22

4.2 Strategies of biopiracy and theft of seeds __________________________________________ 23

4.3 Controlling the chain of food production __________________________________________ 24

5. Legal situation in Europe ______________________________________________________26

5.1 Plant varieties and genetically engineered plants at the EPO _________________________ 26

5.2 Conventional breeding___________________________________________________________ 26

5.3 Scope of patents ________________________________________________________________ 27

5.4 How to patent something that already existed ______________________________________ 27

5.5 European patent system in conflict with international obligations ____________________ 28

6. Some conclusions and political demands_______________________________________29

References______________________________________________________________________31


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SummaryThis report was written against the backdrop ofa pending decision at the European PatentOffice (EPO) that will have a major impact onthe international market for seeds and food,and, consequently, on global food security. Thepending decision will encompass two patents:one patent claiming plants, seeds and the edibleparts of broccoli (EP 1069819, named thepatent on broccoliin this report); and the otherinvolving tomatoes with reduced water content(EP 1211926, named the patent on wrinkledtomatoes in this report). The most importantissue in these two cases is that both plants arederived from conventional breeding and, untilnow, conventional breeding has been exempted

from patentability by the wording of theEuropean Patent Convention (EPC). It isexpected that the EPO's Enlarged Board ofAppeal, the highest tribunal at the EPO, willtake a decision on these cases (registered asG2/07 and G1/08, respectively) in 2009. Thedecision will set precedent on whether patentscan be granted on conventional breedingprocesses involving plants and animals inEurope or not.

Under European patent law (EPC) there is an

exemption for essentially biological processesfor the production of plants or animals (Art.53b, EPC). The pending decision will likelyinterpret this prohibition, thereby having far-reaching impacts on the patentability ofprocesses in conventional breeding. It will bethe first time that a patent office will deal withthis specific question in detail.

To illustrate the severe consequences created byexcessive seed patenting this report willdescribe the situation of farmers in the UnitedStates, where patents on seeds have beenallowed for several decades. One can observethat in the United States a single company,Monsanto, has gained a dominant marketposition in genetically engineered (GE) seeds. Inturn, the freedom to patent seeds combinedwith the high concentration of seed patents inone company has led to harmful results, such asthe increase of seed prices and decrease of seedchoices for farmers.

This report will also present the results of new,detailed research on patents in the field of

conventional breeding. The patents researched

for this report are either pending as applicationsor have been granted at the EPO. The number ofpatent application in the field of conventionalbreeding has been steadily increasing for years.Currently, about 500 patent applicationsinvolving conventional breeding methodsnearly 25% of all patent applications on plantsand seeds filed in 2008are pending at theEPO. In the years 2000 to 2002 this figure wasbelow 5%. It is expected that the recent growthof these kinds of patents represents a trend thatwill continue to gain importance in the next fewyears.

These figures reflect an actual shift in plant

breeding trends driven by recent successes inconventional breeding with traits such as yieldand resistance against environmental stress andpests. These successes have shown thattraditional breeding is generally superior togenetic engineering for improving morecomplex genetic characteristics in plants. Thisdevelopment is highly relevant for companiessuch as Monsanto, Dupont and Syngenta, themain drivers in genetically engineered seeds.These companies have access to a broad rangeof high quality genetic material that was owned

by the seed companies that they acquiredwithin the last few years. Considering thesuccesses in conventional breeding and a trendshift toward traditional breeding thesecompanies are highly interested in extendingtheir patent monopolies into this area. So theyhave started inventing inventions in the areaof traditional breeding by claiming that the useof trivial technical tools in breeding should besufficient to turn the whole process of plantbreeding into a patent monopoly.

The supposed technical and inventive parts ofthe abovementioned patents involve a broadrange of methods used in conventional breeding, such as marker assisted breeding,genetic fingerprinting, description ofcompounds (such as oil or protein), orassessment of plant qualities such as yield orpest resistance. In most cases the technicalinput required in these cases is relatively minoror even trivial and can hardly be seen asinventive. Nevertheless, more than 70 patentson conventional breeding have already beengranted in Europe.


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The scope of the patents analysed for this reportwas not restricted to the use of specifictechnical processes, but also covered plantgenetic resources, seeds, plants and evenharvests and their use in food and biomassproduction. Further, because of the way many ofthese patents have been phrased, they can cover

the use of the patented plants in latergenerations and after further crossings. And thepatents also have the potential to accumulatewithin seeds after further crossings.

The strategy behind these patents is evident inseveral respects. For one, competitors arehampered by legal uncertainty for the timeduring which a patent is pending. Then, as soonas the patent is granted, access to technologyand resources can be denied. Thus, a patentapplication may thwart competitors while it is

in process and then, if granted, can denycompetitors access to technology.

In addition, in some cases companies have beenknown to combine seeds derived fromconventional breeding with patented GE traits(like herbicide resistance) to assure that theycan raise an additional technology fee andhamper the choice between GE and traditionalseeds.

Many of the patents analyzed for this report areof specially high relevance to developing

countries and centres of biological diversity.Methods like marker assisted breeding, geneticfingerprinting, or the description of specificcompounds can be applied to systematicallyscreen for the most interesting regional andlocal varieties and can then be used as a tool forlarge-scale biopiracy.

In sum, the report shows a threatening scenario.It describes the potential takeover of plantsgenetic resources by international companies,which would then be able to control access to

the most important resources for conventional breeding and the whole food chain. Seeds,plants and food patents granted on a grand scalecould significantly impact food prices andavailability, and could become an additional

factor contributing to upcoming global foodcrises. Furthermore, because small-scaleproducers in developing countries rely on theright to save seeds from their harvest and toexchange them with other communities, thefreedom to do this is crucial for the future offood security.

In order to halt these threatening developmentsit is not enough to wait for patent offices toreject single patent applications or to file moreindividual oppositions in this field. What isneeded most is a clear legal ruling that exemptsseeds and farm animals from patent protection.The pending decision at the EPO could becomethe starting point for a new approach on thisissue if the EPO denies the patent on broccoliand the patent on wrinkled tomatoes.

A patent is the exclusive right to commerciallyexploit a new invention for a limited period oftime. Patents on plants, animals and genes givecompanies significant control over foodproduction. This temporary monopoly grantscompanies the exclusive right to sell the seedsand allows them to charge higher prices for theseeds. As applied in most countries patentsprohibit farmers from saving seeds from theirown harvest; so they must either buy new seedseach year or pay for a license to use patentedseeds they have saved. Other companies andplant breeders who want to conduct research onthe patented material must generally apply forpermission from the patent holder. Patents arean important tool for the big actors in the seedmarket because only they can afford to apply fora patent and also have the resources to thenenforce it. Moreover, patents exacerbate geneticerosion as they promote monoculture byhindering the development of new seedvarieties. In sum, the possible, longtermconsequences of patents are control of thewhole food chain by a few companies andestablishment of unsustainable agriculture

through monoculture and other factors.


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5

1. Introduction: history and evolution ofpatents at the EPOIn 2007, the EPO celebrated its 30th anniversary

and proudly presented itself as one of thelargest patent offices in the world. At the sametime, however, alarm bells rang out loudly forthe future. The EPO was and is caught in asituation that has been described by severalobservers as a patent bubble. It is faced withthe enormous burden of deciding on hundredsof thousands of pending patent applications, butwithin this steadily rising number of patentapplications there is a remarkable erosion ofinventiveness.

In light of this situation, the EPO addressed thepublic around the time of its anniversary with aclear message: it would have to undergosubstantial changes to fulfil its function andgain the legitimacy necessary for its futurework. To our knowledge, this was the first timethat a patent office in the industrialised worldopenly admitted that there is an emerging crisisin the system.

The patent system was created to fosterinnovation and new inventions by renderinglimited monopolies for their commercialutilisation. Through time the system has become distorted by an increase in patentapplications that do not present true inventions but instead aim to obtain patent thickets,enabling patent holders to control markets andhamper competition. The general situation isvery often described as patent inflation, withhundreds of thousands of applications pendingin a backlog and steadily eroding standards ofinventiveness. In a report titled Scenarios forthe Future (EPO, 2007) the office describedsome problems with the current patent system:

The growing use of patents andintellectual property has led toblockages throughout the system ....There are many questions being askedabout todays patent system, but one ofthe key questions we identified waswhether it is and can remain fit forpurpose by supporting innovation forthe benefit of society at large in a post-industrial era. If not, its legitimacy maybe open to question.

There are interest groups that are pushing

heavily for the lowering of patent standards and

the expansion of areas where patents should begranted. The authors of Scenarios for theFuture warn that if these groups prevail in thenext 20 years the patent system could becollapsing under its own weight. As thepresident of the EPO Patent Office hasannounced, the strategy of raising the bar(meaning creating higher standards ofinventiveness)1 might be an approach that could be taken to counteract current developments.Most recently, in 2008, for the first time in itshistory the EPO reported a refusal rate of over

50 % of pending patent applications. Thisindicates that the EPO is trying to follow thestrategy announced by the president in movingtoward patent quality.2

The issue of the patentability of plants, animals,and processes for breeding is highly relevanthere. Since 2007 and 2008, respectively, twoprecedent setting cases are pending at theEnlarged Board of Appeal--the cases of the patent on broccoli(registered as G2/07) andthe patent on wrinkled tomatoes(registered as

G1/08). The decision reached in these two caseswill be decisive for the erosion of standards inpatentability as they relate to conventionalbreeding in plants and animals.3

This report will show that companies areprepared for a global rush on patents in the areaof traditional, conventional breeding; however,allowing the types of patents analysed in thisreport (i.e. patents on conventional breedingand related seeds, plants and derived products)would call into question the legitimacy of thepatent system by contributing to the problem of

erosion in inventiveness. Furthermore, it wouldcreate a global threat to the future of foodproduction by contributing to the market

1http://www.epo.org/about-

us/events/archive/2008/epf2008/forum-1/details2/closing.html

2http://www.ip-watch.org/weblog/2009/03/21/european-

patent-office-patent-applications-slow-as-rejections-

rise/

3 More information at www.no-patents-on-seeds.org


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concentration of seed companies, hamperinginnovation, leading to increases in seed pricesand decreases in choices for farmers, and

hindering the ability of farmers to exchangeseeds and save seeds.


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7

2. Concentration of the seed marketThe seed market has been undergoing apermanent process of concentration andrestructuring for several decades. According tothe expert group ETC4, just ten companiescontrol two thirds of global seed sales.5 Theprocess of concentration has not only led to thetakeover of big seed companies, such as Pioneer,DeKalb, Advanta and Seminis, by other largecompanies, but has also caused many smallercompanies to simply disappear. The followingsubsections will discuss the consequences ofthe concentration of seed businesses into lessand less hands, among these consequences areincreases in seed prices, decreases in choices forfarmers, and antitrust actions.

2.1 Effects of seed market

concentration on pricing

Those companies that are the biggest players inseed markets have undergone drastic changes inrecent years; and, consequently, the prices in

4www.etcgroup.org/

5

http://www.etcgroup.org/en/materials/publication

s.html?pub_id=706

and volume of seed markets have beeninfluenced by their transformation. When wecompare the figures on the total volume of theglobal seed market given by Rabobank in 1996,U.S. Department of Agriculture (USDA) in 2004(Fernandez-Cornejo, 2004) and Kock (affiliatedwith Syngenta) in 2006, it becomes apparentthat the volume of commercially traded seedhas enlarged substantially through time, whilethe overall volume (which is not preciselydefined by these authors) has shown slowergrowth. While the overall seed market volumeincreased from 45 billion U.S. dollars(Rabobank, 1996) to $50 billion (Kock, 2006),commercially traded (purchased) seed doubled

from $15 billion in 1996 (Rabobank) to 25 billion in 2004 (Fernandez-Cornejo) and 30billion in 2006 (Kock, 2006). This data indicatesthat farmers' reuse and free exchange of seedshas fallen substantially in the last few decades6

Graph1:Volumeofinternationalseedmarket

6It is unclear if Kock, 2006, Fernandez-Cornejo 2004,

and Rabobank 1996 really used the same criteria but

the authors are nevertheless convinced that these

figures represent a real trend.


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When looking at recent figures on thedevelopment of seed prices in the United States,one can see that drastic changes have occurredsince 1996 and 1997, with seed prices rising,especially in seeds where geneticallyengineered varieties entered the market, such ascotton, corn and soy. For example, the price for

soy and corn seeds more or less doubledbetween 1996 (when GE seeds were introduced)and 2007. In comparison the prices of seeds forwheat and rice (for which geneticallyengineered seeds are not prevalent) wereincreasing much more slowly during that timeperiod of time. Graph 2 shows selected seedprices from 1975 to 2007 for wheat, soy andmaize taken from official USDA figures.7

Graph2:Comparisonofpricesforseedsinsoy,maizeandwheat(U.S.dollars,perplantedacre),United

States,19752007.Source:USDAEconomicResearch

Service(graphadoptedfromThen&Lorch,2009)

Notably, in the period of time when seed pricesfor these crops increased dramatically, yieldsfrom these crop species did not increaseproportionally. While all three crops showedsimilar developments related to yield, there wasan increasing gap between slowly growingyields and much faster increasing prices inthose species where GE varieties wereintroduced. This becomes evident when

comparing developments in maize, soy, cotton,rice and wheat, as illustrated in Graph 3.

7United States Department of Agriculture (USDA)

Economic Research Service 2009,

http://www.ers.usda.gov/Data/CostsAndReturns/testpic

k.htm

Graph3:Correlationbetweenpricesofseedsand

yield,UnitedStates,from19752007,transformedby

multiplicationfactors(factor2=100%increase).

Source:USDA,EconomicResearchService(graph

adoptedfromThen&Lorch,2009)

Further, the proportion between costs for seedand total operating costs is much better inwheat and rice, where GE seeds are notprevalent, compared to cotton, maize and soy,where GE seeds are prevalent. While in theUnited States price for seed is responsible forabout 10 % of the total operating (year 2007)costs in wheat and rice, it is about 17% incotton, 21% in maize, and 37 % in soy. Thiseffect is not caused by sinking in overalloperation costs in genetically engineered seeds,

as operating costs are also steadily increasing.(Since 1990 the costs for chemicals only wentdown for soy beans, but this economic effectwas much smaller than the one caused by risingcosts for soy seeds.) On the contrary, the highcost of seeds for crops where GE seeds areprevalent is attributable to the high cost of theseeds themselvesseeds that do not provideyields proportionate to their higher costs.

In sum, this data shows that in the newlyconcentrated seed market farmers are less and

less able to rely on the reuse and free exchangeof seeds and must pay ever increasing prices forseeds that do not provide proportionally higheryields in crops where GE seeds are prevalent.

2.2 Impacts on farmers

This section will look at the impacts thatpatents on seeds and related products arehaving on farmers, specially farmers in theUnited States, where the issue of seed patents isspecially widespread. It will analyze legalissues and cost issues confronted by farmers.


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Several reports show that in North America,where many GMOs are grown and patent law onseeds is enforced, the legal situation can becomedifficult for a farmer if a company starts suingfor unauthorised use of seeds. A report from theCenter for Food Safety in the United Statesdocuments over 100 cases in which farmers

were accused of infringing the patent rights ofthe Monsanto seed company (Center for FoodSafety, 2005).8 A very well known case is that ofPercy Schmeiser, a case that was taken to courtin Canada after Mr. Schmeiser was accused ofillegally using Monsantos seeds.9

Farmers in the United States are not onlyconcerned with direct legal conflicts withpatent holders, due to the introduction ofgenetically engineered seeds by a singlecompany (Monsanto) with a dominant market

position, the more generalised problem ofexclusive seed monopolies has surfaced.

In addition to legal issues, farmers are facingsoaring seed prices and a reduction in choice ofproducts. Although seed prices are not yetamong the most important economic factors forfarmers in the United States, it appears that theyare about to become a bigger issue. For instance,in 2008, when Monsanto announced a newround of higher prices in maize, farmers voicedcomplaints about high seed prices.1011 Although

8http://www.vanityfair.com/politics/features/

2008/05/monsanto200805?printable=true

&currentPage=all

9www.percyschmeiser.com

10http://www.dtnprogressivefarmer.com/

dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=business&blogEntryId=8a82c0

bc1ae0f224011ae9296a9e005f

11http://www.competitivemarkets.com/

index.php?option=com_content&task=view&id=265&It

emid=80

the company pushed up prices with the promiseof higher yields and new technologicalfeatures,12 experts are concerned that theincrease in seed prices has nothing to do withhigher yields, but is instead a product of thehigh concentration of seed companies andresulting lack of competition in the U.S. seed

market. This market does not provide sufficientchoice for the farmers and in a sense forcesthem to purchase seeds at increasing prices.

In response to this problem, the Organizationfor Competitive Markets (OCM)13 is running aninitiative to increase choice in the seed marketby holding Monsanto responsible for abusing itsnumber one position in the seed business.According to OCM's figures, Monsantomaintains an extremely strong position,especially in genetically engineered seeds (see

Graph 4).

Graph4:PercentageofMonsantostransgenictraitsin

cotton,maize(corn)andsoy.Source:

http://www.competitivemarkets.com

12A speaker for Monsanto was quoted in an article about

the ongoing increase in prices for corn seeds: Webelieve that through breeding and biotechnology, we

can double corn yields by 2030.http://farmindustrynews.com/seed/0904_seed_universit

y_prices/

13 http://www.competitivemarkets.com


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OCM is advocating for fair seed prices:

Monsantos market power is drivingup seed prices and increasing economicrisk to farmers. There is no competitiverestraint to this price hike. This marketpower has been quietly accruing overseveral years and has now begunmaterially impacting price. The lack ofcompetition and innovation in themarketplace has reduced farmers'choices and enabled Monsanto to raiseprices unencumbered.

Indeed some quotes by a speaker fromMonsanto (also cited above)14 indicate that thecompany simply tries to find out how far it canraise prices in relation to farm income and setsprices accordingly:

We are measured on the value of the

product we provide to the farm, theMonsanto speaker said. Even at a 30 to40% price increase, we're still the mostprofitable return on investment.

This analysis of the market only makes sensewhere there is no competition in the market thatallows farmers real choices when comparingproducts of similar quality and price. Of course,this type of true competition is not in theinterest of seed producers in the United States.In the same article15 an expert from the Purdue

University is quoted:

If such increases are in the future,producers don't really have any options.. . . If everyone raises seed prices, theonly option is to not plant corn. So youpay and plant, or stop producing corn.

Farmers are squeezed in this situation; as theirrevenue from investments rises, the seedcompany increases the size of its portion of the

pie. As BASF is quoted as saying back in 1998:

Farmers will be given just enough tokeep them interested in growing thecrops, but no more. And GM companiesand food processors will say very clearly

14http://farmindustrynews.com/seed/

0904_seed_university_prices/

15http://farmindustrynews.com/seed/

0904_seed_university_prices/

how they want the growers to grow thecrops."16

According to Wolf (2009) the prices paid inEurope for seeds of Bt maize differ from regionto region and are correlated with the likelihoodof damage caused by the corn borer. This is afurther indication that seed companies arefixing prices without any pressure from marketcompetition. There are also reports from theUnited States showing similar results. Forexample, in 2008 a farm magazine reported onresearch involving 38,000 farms in 48 states:17

"The . . . researchers found thatdepending on your state, there is anautomatic premium added, except forKentucky. Ordered from high to lowpremium, these states are: Nebraska

($7.50), Iowa ($7.00), Kansas ($6.86),Missouri ($6.31), Illinois ($5.96),Minnesota ($5.24), Colorado ($5.01),South Dakota ($4.75), Pennsylvania($3.93), and Indiana ($3.70). This showsthat the main corn-producing states inthe Corn Belt charge more for corn seeds(e.g., Illinois or Iowa). It suggests thatseed companies do price discriminateacross regions. "

According to this article, prices for seeds are

also higher if stacked genes (which means thatseveral gene constructs are combined in theplants) are introduced into the crops. The moreartificial genes are inserted, the higher therevenue that can be expected for the company.This leads to a situation in which the companytries to sell plants with as many artificial genesas possible to increase its revenue.18 In 2009 it isexpected that more than 75% of maize seedswill be triple-stacked in the United States.19Herbicide tolerance will be combined with

16Friedrich Vogel, head of BASF's crop protection

business, Farmers Weekly, 6 November 1998 (the

authors were not able to verify this quote).

17http://www.farmgate.uiuc.edu/archive/

2008/09/what_are_you_pa.html

18http://www.farmgate.uiuc.edu/archive/

2008/09/what_are_you_pa.html

19http://www.dtnprogressivefarmer.com/dtnag/

common/link.do?symbolicName=/ag/blogs/

template1&blogHandle=business

&blogEntryId=8a82c0bc1ae0f224011ae9296a9e005f


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insect resistance above and below the soil.Since the expected revenue for triple stackedseeds is higher than for single traits, thecompany has no interest in offering alternativeswith fewer traits, even if some farmers do nothave a need for triple-stacked varieties. As anexpert at OCM's website writes:20

Id love to see a study of farmerspurchasing varieties with triple-stackedtraits that questioned if they boughtthem from need, or because their singleand even double-stack traits are nolonger available. The truth is: Monsantodoesnt even want competition from itsown trait packages. RoundUp Readyresistance is all that you what you want?Tough luck, they only license that traitto your dealer stacked with above andbelow ground pest protection as well.

They see an opportunity to make moremoney selling you all the add-ons, andso are making it impossible for a farmerto just buy the single trait.

Compared to the situation in the United States,where there is precise data on rising prices andmarket concentration, the impact of patents indeveloping countries is poorly documented.Nevertheless, economical and legal develop-ments regarding this issue receive muchattention for example, in discussions on a

new seed bill in India21 or where thepatentability of regional varieties is concerned.22There is also concern in developing countriesabout the growing economical impact ofmultinationals in the area of agriculture, asexpressed, for example, in notes made by theUN Committee on Economic, Social andCultural Rights (in its fortieth session inApril/May 2008) regarding the situation inIndia:

"The Committee is deeply concernedthat the extreme hardship beingexperienced by farmers has led to anincreasing incidence of suicides byfarmers over the past decade. TheCommittee is particularly concerned


index.php?option=com_content&task=view

&id=265&Itemid=80

21www.genecampaign.org/Publication/

Article/seed_bill/Seeds%20Bill-%20JPC-19.pdf

22 http://www.navdanya.org/articles/articles27.htm

that the extreme poverty among small-hold farmers caused by the lack of land,access to credit and adequate rural infra-structures, has been exacerbated by theintroduction of genetically modifiedseeds by multinational corporations andthe ensuing escalation of prices of seeds,

fertilisers and pesticides, particularly inthe cotton industry. "23

The implications of patented seeds ondeveloping countries are also expressed bymany experts in the field of patent law. Forinstance, the UK Commission on IntellectualProperty Rights stated in its report in 2002:24

"Because of the generally negativeeffects of patents in plant breeding, theUK Commission on Intellectual Property

Rights explicitly advises developingcountries to completely ban patents onplants and seeds."

In addition, Gary Toenniessen of the RockefellerFoundation was quoted in Nature magazine in2004 as saying:

"If this trend isn't halted, some expertsclaim, tomorrow's supercrops may endup like many of today's medicines:priced out of the reach of much of thedeveloping world's growing population.

`We are headed down the same path thatpublic-sector vaccine and drug researchwent down a couple of decades ago,says Gary Toenniessen, director of foodsecurity at the Rockefeller Foundationin New York."25

2.3 Monsanto in antitrust procedures

Given the situation in the United States, it is not

surprising that several antitrust actions have been filed against seed businesses in thatcountry.

23http://www2.ohchr.org/english/bodies/

cescr/docs/co/E.C.12.IND.CO.5.doc

24UK Commission on Intellectual Property Rights, 2002,

Integrating Intellectual Property Rights andDevelopment Policy, http://www.iprcommission.org

25Knight, J., 2003, Crop improvement: A dying breed,

Nature 421: 568-570, Feb 6, 2003.


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One of the most recent cases was filed againstMonsanto in October 2008 by a company fromTexas named Texas Grain Storage (Case 5:07-cv-00673-OLG, in Texas Western District Court).26Its complaint combines the issue of seedmonopolies with the pricing of pesticides. It is ahighly interesting case because Texas Grain

Storage has worked with Monsanto in the past.It sold Monsantos herbicide glyphosate (brandname Roundup), so it is familiar with howMonsanto operates to achieve and keep itsdominant market position. For Monsanto theherbicide glyphosate is a key blockbuster; salesof this product were greater than two billiondollars in 2006 (Monsanto's total sales in 2006were more than seven billion dollars).According to the complaint, Monsantos share ofthe U.S. market for glyphosate was about 60-80%, even years after the patent expired.

Monsanto is alleged to have used its dominant,monopoly power in an unlawful way. Accordingto the complaint, in 1996 the companydeveloped a Monsanto Maize ProtectionBusiness Plan providing:

Patents for Roundup Ready genes havebeen issued. Using these patents andagreements with maize seed companies,Monsanto can prevent the use of anyother glyphosate product (...). (page 19of the complaint)

The complaint explains that Monsanto's strategyfor securing the market and hamperingcompetition operated on several levelsthrough contracts and agreements with othercompanies (which include the possibility thatother companies could buy Monsantos originalRoundup Ready product and resell it undertheir own brand names) and patents on genesand seeds to block access to technology andgenetic material. These factors then got bundledin its contracts with customers. As the text of

the complaint explains:

In other words, if seed companies donot sufficiently support the maintenanceof Monsantos market share in themarkets for glyphosate-tolerant seed-traits, then Monsanto will penalizethem. By financially bundling its pest-resistant seed-traits with its glyphosate-


index.php?option=com_docman&task=cat_view&gid=2

7&Itemid=32

tolerant traits, Monsanto has used itsmonopoly power in pest-resistant andherbicide-tolerant traits to excludecompetition in the relevant herbicidemarket, and obtain and maintainmonopoly power in that market. (page21 of the complaint)

This strategy was supported on a further level:Monsanto blocked innovation and breeding atcompeting companies. For example, whenMonsantos market rival Dupont tried todevelop its own herbicide resistant seedsthrough conventional breeding in collaborationwith Asgrow, a soybean seed company,Monsanto not only bought Asgrow but(according to the complaint by Texas GrainStorage), it forced Asgrow to breach existing

contracts with Dupont, thus preventing thecompany from developing its own products.Thus, gradually and through reliance on severalmethods, Monsanto was successful in estab-lishing a network of dependencies, licenses,ownerships and penalties, which tiedconsumers to its product.

Texas Grain Storage's complaint is not the onlyantitrust action currently under way againstMonsanto. The American Corn Growers havealso filed a case in U.S. Federal Court.27 And in

the past there have been similar attempts to startantitrust procedures against Monsanto. In 2000,for example, an initiative was started by theNational Family Farm Coalition.28 Rivalcompanies in the seed business, such asSyngenta, have also alleged in the past thatMonsanto violated competition standards, butachieved a settlement that more lessstrengthened the market power of theseagrochemical companies.29 In sum, Monsantoshistory for the past 20 years has been visited bylegal cases with farmers, companies, and

various other institutions in the United States.30

These cases point to the company's strategy for

27http://www.acga.org/index.php?

option=com_content&task=view&id=40&Itemid=42

28http://www.corpwatch.org/article.php?id=574

29http://www.patentdocs.org/2008/05/monsanto-and-

sy.html

30http://www.nationalaglawcenter.org/

assets/caseindexes/biotechnology.html


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dominating the pesticides and seeds markets ina way that has been detrimental to farmers andto healthy market competition.

The antitrust complaint filed by Texas GrainStorage and the abovementioned court casesshow the general problems that arise when thereis a highly concentrated seed market, whenthere are only a few (or one) dominant players,and when patents are widely used as a decisivetool in controlling access to genetic material. Sofar this situation, i.e. the situation of the UnitedStates, seems to be atypical for many regions ofthe world. There are specific reasons why in

Europe, for instance, farmers do not now suffersuch consequences due to seed patents. It islargely because so far these patents mainlyconcern genetically engineered seeds and GEcrops are grown on a large scale in very fewregions of Europe. But if seed patents areextended to conventional breeding processes,

farmers will be affected by new seedmonopolies in Europe as they have been in theUnited States, and this will not only be the casein Europe, but also throughout many parts ofthe world.


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3. Patents in conventional plant breedingThis section analyses the current andimpending situation regarding patents inconventional breeding. It examines how manyand what kinds of patent applications arepending at the EPO and investigates the extentto which patents involving conventionalbreeding have already been granted in Europe.Then, this section goes on to discuss thepotential impacts of the process of patentingconventional breeding. In section four the reportprovides more detailed examples of patents thathave already been granted and in section fiveexplains some of the legal background.

As was mentioned earlier in the report, the

background to this report is a pending,precedent-setting decision at the EPO. For thefirst time in its history the EPO will issue ageneral decision on the patentability ofprocesses for breeding conventional seeds andplants. The patent cases under discussion inthis decision are the patent on broccoli(EP1069819) and the patent on wrinkledtomatoes (EP1211926), both derived fromconventional breeding (the legal cases related tothese patents are registered at the EPO as G2/07and G1/08, respectively).31

In both cases some technical tools were usedduring the process of breeding, and in bothcases the patent holders argue that thesetechnical tools provide sufficient reason to turnthe whole process of conventional breeding intoan inventive process for the production ofplants. Further, those claiming the patens alsoargue that the seeds, resulting plants, and edibleparts of the plants should all be part of thepatents. If these two patents are upheld at theEPO, the consequence will be that minortechnical inputs in plant and animal breedingprocesses will be sufficient to allow companiesto claim conventional seeds and animals astheir intellectual property, as is already the casewith genetically engineered seeds.

3.1 Overall trends in plant breeding

There has been an interesting trend in plant breeding in the last few years. Innovation has

31 For more details see: www.no-patents-on-seeds.org

been shifting from genetic engineering back toconventional methods supported by sometechnical tools. These tools include methodslike marker assisted breeding (MAB), which areoffering a more efficient approach to many goalsin plant breeding when compared to methodsused for genetically engineered seeds. Tools likemarker assisted breeding, however, simplysupport conventional breeding to make it moreefficient and do not require the same level ofinput as genetic engineering.With these conventional plant breedingmethods, existing biological diversity in plantgenetic resources is screened for importantgenetic conditions, such as drought and pest

tolerance. In most cases such seed qualities arenot based on single DNA sequences but oncomplex genetic patterns and, thus, thesequalities can normally be captured moreeffectively by using traditional breeding than byrelying on genetic engineering. Conventional breeding has been making significant progressin relevant goals like yield and pest and stressresistance, some of the results are listed in anFAO report (2007).

These developments in conventional breeding

are highly relevant for companies such asMonsanto, Dupont and Syngenta, the maindrivers in GE seeds. These companies haveaccess to a broad range of high quality geneticmaterial owned by the seed companies that they bought within the last few years during theprocess of market concentration discussedabove. Faced now with the new shift towardconventional breeding these companies arehighly interested in extending patent mono-polies to the area of conventional breeding.

In fact, companies such as Monsanto, Syngentaand Dupont are filing more and more patents onplants and seeds derived from conventional breeding. As our recent research for the nopatents on seeds initiative shows, the number ofpatents claims on methods and products inconventional plant breeding has been steadilyincreasing and has now reached more than 500in number. In 2008 nearly 25% of all patentapplications at the EPO related to plants weredirected at conventional breeding. Some years before, patent applications centred onconventional breeding processes had been the

rare exception.


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At the same time, the number of patentapplications in the field of genetic engineeringhas been decreasing for several years. Currentlysome patent applications reflect the technicallimitations of genetic engineering in plants ascompared to conventional breeding. By way of

illustration, one can read this telling quote inMonsanto's patent application WO 2004053055(the patent on unintended effects):

Nonetheless, the frequency of successof enhancing the transgenic plant is lowdue to a number of factors including thelow predictability of the effects of aspecific gene on the plant's growth,development and environmentalresponse, the low frequency of maizetransformation, the lack of highly

predictable control of the gene onceintroduced into the genome, and otherundesirable effects of the transformationevent and tissue culture process. (page2)

Similar passages can be found inWO 2007078286 (the patent on misexpressedgenes) applied for by the U.S. company, Ceres,and in application WO 2008076834(the patenton speculative gene functions) made by theU.S. company, Agrinomics. Patent applications

by Syngenta also follow this trend, thusapplauding the methods of conventional breeding and at the same time calling intoquestion the technical advantages of geneticengineering. Relevant statements can be foundin some of the most recent patent applications,such as WO 2008087185, WO 2008087208, andWO 2008087208. For example inWO 2008087208(the patent on complex traits)it is stated:

Most phenotypic traits of interest are

controlled by more than one geneticlocus, each of which typicallyinfluences the given trait to a greater orlesser degree (...) Generally, the termquantitative trait has been used todescribe a phenotype that exhibitscontinuous variability in expression andis the net result of multiple genetic locipresumably interacting with each otherand/or with the environment. (page 1)

When reading these patent applications it

becomes evident that there has been a shift in

strategical approach in plant breeding (at leastwhen it comes to more complex patterns inheritage). (This new approach is driven bycompanies like Syngenta, which, interestingly,have been trying for years to promote GE seeds.)

Graph 5 shows the number of patent

applications and patents granted at the EPO inthe field of seeds and plants (with and withoutgenetic engineering). The reduction in numberis mainly due to a decrease in patentapplications in genetic engineering during aperiod when applications encompassingconventional breeding are increasing (see below,graph 6).

Graph5:numberofpatentapplicationsinplant

breeding,19802008(source:EspaceAccessVol.

2009/001andEPBVol.2009/00)

3.2 An overview of patent applications

in conventional breeding

Our research found that the EPO has

experienced an increase in patent applicationsinvolving conventional breeding in recent years.Almost all patent applications involvingconventional breeding methods analysed forthis report have been applied for via the WorldIntellectual Property Organisation in Genevaand then registered as pending at the EPO. Thesame applications will also be registered atmany other patent offices around the world;therefore, these applications are not onlyrelevant to Europe but to many parts of theworld.

Graph 6 (below) shows the rise in patent


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applications in conventional breeding comparedto all patent applications in the field of plantsand seeds at the EPO. The data was compiled byscreening patent applications at the EPO alongcertain classifications and names of relevantcompanies. Then the screened applicationswere studied in detail. Most of the studied

applications concerned plant breeding withoutany reliance on GE, some encompassed acombination of GE and conventional breeding,and, lastly, some patent applications weremainly directed at the use of geneticengineering but also included conventionalbreeding as an additional option.

All in all, more than 500 patent applicationswere identified as including conventionalbreeding in plants, and most of these were filednot only in Europe but globally. The figures

presented below are far from being complete inall aspects; nevertheless, this research is themost comprehensive ever done on the matterand provides the most realistic picture we haveto date on the current situation of patents onconventional plant breeding processes at theEPO.

Graph6:percentageofpatentapplicationson

conventionalplantbreedingcomparedtoall

applicationsinplants,20002008,attheEuropean

PatentOffice(source:ownfigures)

These approximately 500 applications werespread out at a rate of about 30 applications peryear from 2000 to 2002, rising significantly toabout 120 applications in 2008.32 (Ourestimation is that the true number of all relevantpatent applications is at least 10 to 20 % higher

32The high number of patent applications for 2008 in this

figure might be partially due to more in-depth research

during that year.

than what we found through this research.) Ofthese patent applications, more than 60 can bedirectly linked to companies belonging toMonsanto, and around 30 applications can belinked to each Dupont and Syngenta. BothBASF (in cooperation with Cropdesign) andBayer (in cooperation with Agrinomics) also

filed a quite important number of patents, but inthe applications from these two companies theuse of GE seeds seems to be dominant andconventional breeding is only mentioned as anadditional option.

Some of the patent applications studiedinvolved both conventional breeding andgenetic engineering, but most were directedonly at conventional breeding. This can be seenin Graph 7, below.

Graph7:Comparisonofpatentsinvolvingconventional

breedingandpartiallyalsogeneticengineeringto

thoseonlyinvolvingonlyconventionalbreeding

3.3 Categories of patent applications

and technologies used

In our analysis of the patents we found thatcompanies relied on several methods to claimseeds and plants as intellectual property. The

patent applications we studied in the field ofconventional breeding were, for example,directed at the: content of compounds in plants (such as oil

or protein) phenotypical features (such as number of

leaves or size of plants, yield, growth,biomass)

resistance against biotic or abiotic stress screening for naturally occurring genetic

conditions (with methods such as markerassisted breeding)

methods of breeding (like variations in


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hybrid technologies) methods for certain types of selecting and

crossing mutagenesis (also including more recently

targeted methods such as tilling)

Many of the technologies used to supportconventional breeding were directed atanalysing the naturally occurring geneticdiversity of crop plants (all of these methodshave been known for years). Some of them arelisted here with a short overview:

Genetic fingerprinting: Geneticfingerprinting is not directed at specific,single regions of the genome, but revealsthe distribution of general elements andstructures in the genome. The resultingpatterns are characteristic for each

individual. The method is often used incrime investigation to identify persons, but can be applied to the genome ofplants and animals as well. The resultsare not linked directly to genetic qualities,but might be used for further comparisonof different genetic fingerprints, thuslooking for statistical correlation withphenotypical characteristics.Fingerprinting can be performed byseveral methods; the most well known isRestriction Fragment LengthPolymorphism (RFLP). In this method an

enzyme is used to cut the genome in partsand pieces at locations with certainstructures identified by the enzyme.Another method is haplotyping, whichlooks for genetic structures that aretransmitted together from generation togeneration.

Marker assisted breeding (MAB): Thismethod looks for correlation of specificDNA sequences with wantedphenotypical characteristics. It is morespecific than genetic fingerprinting.

Another term sometimes used for thismethod is genotyping. Quantitative trait locus (QTL): This

method tries to find correlations betweengenetic markers and genetic conditions(traits) that cannot be reduced to a singlegene locus but are based on theinteractivity of several parts of thegenome. The way these traits areexpressed in the plants can followquantitative patterns.

TILLING (Targeting induced local lesionsin genomes): This method is a kind oftargeted mutagenesis. The plant is

exposed to stimuli that can triggermutations in the plant. The resultingplants are selected by screening fordesired genetic structures.

In most cases the technical input for the overall

breeding process in the above-listed methods islow (further insight is given by some patentexamples below). Monsanto, for example, has been trying to monopolize large parts of themaize and soy genome by using a kind ofunspecific genetic fingerprinting, trying to linkthe fingerprint with some genetic conditions ofeconomic interest, such as yield or pestresistance with the use of statistical methods.This type of genetic fingerprinting is notdirected at a single piece of DNA, but is more orless aimed at representing the whole genome

and can be applied to various geneticconditions. In fact, the scope of these patents isvery often not technically defined.

Finally, the patent applications identified by ourresearch are especially relevant to the centres ofbiological diversity and to developing countries,from which many of the most important globalcrop plants originate. Screening for interestinggene material seems most promising in so-calledexotic varieties, which are not used in highyielding crops in industrialised agriculture.Thus, patent applications based on methods

such as marker assisted breeding or geneticfingerprinting open the way for a new kind ofsystematic biopiracy in developing countries(see below).

3.4 An overview on granted patents

Unfortunately, our findings show that the patentapplications now pending at the EPO, which arehighly relevant to the problems discussed inearlier sections, have a chance of being granted.So far the EPO has not stopped the granting ofpatents in the field of essentially biologicalprocesses, despite the opportunity to do so inresponse to the pending cases G2/07 (the patenton broccoli) and G1/08 (`the patent on wrinkledtomatoes). On the contrary, in 2007 and 2008many patents involving essentially biologicalprocesses were granted. We found 78 grantedpatents involving conventional plant breedingmethods.


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Graph8:grantofpatentsinconventionalbreedingof

plantsattheEPOfrom1990to2008(source:own

figures)

The most problematic patents are those that in avery general way claim methods forfingerprinting and other methods such asgenotyping, MAB and QTL, which can be usedfor the description and analysis of any geneticresources. These patents are not confined toconcrete technical features or specific geneticcharacteristics.

One example that can help to explain this kindof patent stems from animal breeding.EP 1651777 (the patent on pig breeding) wasgranted in 2008 by the EPO; it deals with breeding pigs and marker assisted breeding(MAB). It was applied for by Monsanto and hasnow been sold to Newsham Choice Genetics(U.S.). It describes some genetic variationswhich can be found in all pig populations,without saying which of the variations is themost relevant. The patent claims usage of any ofthose variations as far as they might help toenhance breeding in pigs (related tocharacteristics such as lean meat and quickergrowth). This patent can be applied to all sorts

of pigs. Pigs selected (produced) by the methoddescribed can become the intellectual propertyof the patent holder, even if they were used by breeders and farmers in the past. To visualizethis, one may imagine a patent granted on livingbeings that can be studied in a certain region ofthe beings body by applying a microscope.

While the example above (the patent on pigbreeding) was directed at a certain gene locus(but technically not confined to distinctconditions), patent EP 0483514 (granted in theyear 2000 to Advanced Technologies,

Cambridge, UK, the patent on tree breeding )covers general genetic fingerprinting on trees.Any breeding of trees that uses the well knowntechnical tool of fingerprinting, and even theresulting trees, are covered by this patent. Incontrast to the example in the previousparagraph (the patent on pig breeding), thiscase is like a patent on living beings that can beidentified by looking at them through a simplemagnifier (see more details below).

These last two patents violate a very generalprinciple in patent law. Patents must be definedtechnically in such a way that the reader of thepatent can identify what features and contentare actually covered by the patent's claims. Butthese patents violate this principle, as they arenot restricted to detailed (new) technologicalfeatures or specific genetic characteristics. As a

result, these patents can be misused tosystematically grab genetic resources simply byanalysing the latter. Further, these patents canbe used as a tool to hamper competitors throughlegal uncertainties; because it is difficult forcompetitors to figure out the exact scope of thepatents, they may be hesitant to proceed withtheir own creations. The consequence is thataccess to basic methods in breeding and plantgenetic material can be severely limited or even blocked for other breeders. (And this brings us back to what was discussed in earlier sectionregarding limited choices and increased prices

for farmers.)

3.5 Some possible impacts of patents

on traditional breeding

Monsanto and other companies have on theiragenda the systematic combination of varietiesderived from conventional breeding with GEtraits. For example, it is likely that new varietiesof cotton with better drought resistance derived

from conventional breeding will soon appear onthe market only in combination with MonsantoGE traits.33 Similarly, in another relevant case asoybean variety named Vistive, which hashigher oil quality as a result of conventional breeding, is being placed on the market afterfirst being combined with Monsantos genconstructs for herbicide resistance. In a thirdrelated example, in patent applicationWO 2008150892, Monsanto is explicitly

33http://southwestfarmpress.com/cotton/gene-

technology-1117/


19/3119

claiming the combination of newconventionally bred varieties with GE traitssuch as herbicide and insect resistance (thepatent on GE in combination package).

Situation such as those described above arelikely to undermine the availability of true

choice between seeds with and seeds withoutgenetic engineering. As the case of Asgrowdescribed earlier in this report shows (seeabove), some companies have gone as far asacquiring other, competing companies to stopthem from producing competing products. Theantitrust complaint filed by Texas Grain Storagementions several companies involved in suchpractices, such as Holdens, Agracetus, Ecogen,Calgene, and Plant Breeding International. Thecombination of market concentration with theability to patent and control both seeds with

and without genetic engineering would openthe way for a comprehensive takeover of geneticresources, seeds, and even derived products.

Moreover, it is important to note that patents arenot restricted to seed production, they can coverthe whole food production chain. For examplethe patent on broccoli (EP 1069819) (G2/07),covers not only plants and seeds, but also alledible parts of the plant. Thus, patentsinvolving conventional breeding can haveserious impacts on the food market and othermarkets for agricultural products. In our current

global situation, patents (in combination withother instruments for market control) couldcontribute to soaring food prices, worseningglobal food crises (see also Greenpeace, 2008).

Finally, it is important to note that in Europepatents on the production of plants and animalshave a broader scope than in other parts of the

world. The European Directive on Protection ofBiotechnological Inventions (98/44 EC) providesthat even in cases where only processes areclaimed, the patents can cover all downstreamproducts, future generations, and crossings (Art.8.2 of the Directive, see also section 5).

Graph 9 shows that patents on seeds travelthrough the whole chain of production,impacting markets for seeds, food, feed and biomass. Currently, various patent applicationsand some granted patents (examples providedin the next section) have been found whichcover the following food products: beer, lettuce,tomato, broccoli, soy milk, tofu, infant formula,melons, noodles, carrots, cauliflower, oil, mealand protein.

Graph9:Patentsonseedsandgeneticresourcesandtheirpossibleimpactonchainoffoodandbiomass

production


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4. Examples of patentsOur research identified over 500 patent

applications in Europe involving conventionalbreeding in plants. These patents could be usedto misappropriate genetic resources and to gaincontrol over food production. To explain thepatterns and strategies behind these patents, wehave selected a few examples and categorizedthem into three groups: (1) Basic methods in breeding; (2) Strategies of biopiracy; and (3)Controlling the chain of food production. Ineach category some examples are given ofapplications as well as of granted Europeanpatents.

4.1 Basic methods in breeding

When in 2007 Greenpeace filed a European patent on politicians (EP 1975245), whichdescribed the selection of politicians and otherliving beings based on genetic fingerprintingand marker assisted breeding, theenvironmental organisation sought to show theabsurdity of the current patent system.Greenpeace claimed that the selection of living

beings (such as politicians) by use of thismethod would turn the living beings into a partof the invention.

The organisation applauded the EPO when in2008 it rejected this application, whichconsisted of a combination of incredibly broadclaims and trivial technical features. But incarrying out research for this report it has become evident that patents like the oneproposed by Greenpeace have been filed byseveral companies. And, even worse, some of

these patents have been granted in Europe34.

34 Such as EP0483514, the patent on tree breeding

Picture:Greenpeaceactivitytocollectmaterialforgeneticfingerprintsofpoliticians,2007.

4.1.1 Patent applications on basic breedingmethods

Monsanto recently filed several such patentapplications. For instance, WO 08143993, thepatent of monsantosizing maize, claims markerassisted breeding and genetic fingerprinting in

maize; and WO 08153804, the patent ofmonsantosizing soy, claims the same features insoy. In both of these patent applicationsMonsanto claims whole libraries of DNAmarkers. Further, their use in any statisticalevaluation is part of the so-called invention. Asthe patent claims in WO 08143993 (the patentof monsantosizing maize) read:

What is claimed is a library of nucleicacid molecules (claim 1)

. . . .

a computer based system for reading,sorting or analysing corn genotype data(claim 24)

. . . .

a method of genotyping a corn plant toselect a parent plant, a progeny plant(...) for breeding (claim 37).

Each of the two patents lists 100 claims. Byapplying these patents, the genomes of maize

and soy could be turned into a minefield for


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other breeders. In theory the claims cover allpossible characteristics of the plants. Thesepatents seem to show that Monsanto is devisinga strategy for claiming more or less all possiblegoals in plant breeding for two of the mostimportant crop plants in the world.

Patent application WO 2008021413, the patentof monsantosizing maize and soy, also usessimilar methods, such as genetic fingerprinting(in this case based on a method calledhaplotyping). In more than 1000 pages and 175claims Monsanto enumerates various relevantmarkers, especially in soy and maize. Monsantoeven goes as far as explicitly claiming all maizeand soy plants that incorporate the describedgenetic patterns in their genomes. AndMonsanto asserts that the method used onplants are also applicable to animals:

the methods of the present inventioncan be used for breeding any non humanorganism. Specifically, the methods ofthe present invention can be used inbreeding mammals, such as mice, swine,and cattle, and birds such as poultry orlivestock. (page 1037)

In another related example, the Syngentacompanys patent application WO 2008087208,the patent on yield of maize, is based on thedescription of Quantitative Trait Locus (QTL) inmaize for characteristics such as grain yield,moisture of harvest and architecture of tassel.Syngenta claims all relevant genetic markers,the plants which inherit the relevant genes, allproducts derived, and:

processed maize products, particularlymaize grains and kernels obtainablefrom a plant to any of the proceedingclaims. (claim 31).

Monsantos patent application WO 08054546,the patent on detected resistance, showsanother strategy for the misappropriation ofplant genetic resources. This patent applicationclaims soy bean plants that are resistant againstseveral diseases. This was done simply byselecting those plants which have a naturalresistance against the diseases. Claim 1 reads:

A method for assaying a soybean plantfor disease resistance, immunity, orsusceptibility comprising the steps of:

detaching a plant tissue from said

soybean plant. . . . exposing said tissueto a plant pathogen; and assessing saidtissue for resistance, immunity, orsusceptibility to disease caused by saidpathogen.

All soybeans derived from these procedures areclaimed as the company's intellectual property.

Several patent applications include theseconventional breeding techniques combinedwith genetic engineering. And in some patentsthe use of gene sequences in their isolated form(for genetic engineering) is claimed as well astheir usage for conventional breeding. Oneexample that combines several conventional breeding procedures with genetic engineering,thereby showing some of the essentiallimitations of GE in plants, is the application by

the U.S. company Agrinomics, WO 2008076834,the patent on speculative gene functions.(Agrinomics works in cooperation with Bayer.)This patent aims to appropriate as many plantgenes as possible that are likely to influencefibre, protein, oil or energy content in plants.Interestingly, the biological function of thegenes listed is unknown. Agrinomics namesthese genes HIO (from high oil content) andexplains their functioning rather vaguely onpage 18:

The HIO (...) does not necessarily relateto a plant having high oil (HIO)phenotype. As used herein, the gene (...)refers to any polypeptide sequence (ornucleic acid sequences that encodes it)that when expressed in plant causes analtered phenotype in any part of theplant, for example the seeds.

The gene sequences referred to could even bemis-expressed in a plant (as is happening inmany cases with genetic engineering in plants).Nevertheless the plants produced would becovered by the patent as long as they were ofany economical value. A technical failure ofgenetic engineering in plants that has beencriticised from many sides could now be turnedinto an economic advantage:

In yet other preferred embodiments,mis-expression of the HIO polypeptidecauses unchanged oil, high protein (...)and/or low fiber (...) phenotype in theplant.


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Consequently a broad range of qualities inplants are being claimed (with lowered orenhanced contents of several compounds), asare a broad range of plants, such as corn, soy,cotton, cocoa, oil palm, coconut palm, peanuts,wheat and rice.

4.1.2 European patents granted on basicmethods in breeding

An important question is whether the kinds ofpatents described above could be granted inEurope and elsewhere. At least for Europe thechilling answer is: YES. In fact, patents havealready been granted on fingerprinting in plantsand animals. Some examples:

The previously mentioned EP 0483514, the patent on tree breeding, covers geneticfingerprinting in breeding trees in general. Itwas granted to Advanced Technologies(Cambridge) Ltd in the year 2000. This patent is based on a technology called RestrictionFragment Length Polymorphism (RFLP), whichsimply works due to the phenomena that DNA,cut in pieces by certain enzymes, will showindividual patterns. It is one of the mostcommon methods in genetic fingerprinting. Thepatent was granted for any kind of breedingpurposes in trees. Claim one reads:

A method of forest tree breedingwherein Restriction Fragment LengthPolymorphism (RFLP) technology isapplied to samples of tree material froma plurality of forest trees; the dataderived from said RFLP technology isstatistically analysed thereby to clustergenetically similar trees of said pluralityof said trees; two of said trees of geneticdiversity are selected based on thestatistically analysed RFLP data; and afurther tree or trees is/are derived fromthe two selected trees.

Another example is EP 0537178, the patent ofgenotyping for oil, which was granted to theDupont company in 2007. This patent refers tothe use of fingerprinting in soy to select soywith a certain quality in its oil. In claim 13, theuse of RFLP is patented to screen soybeansderived from conventional breeding for therelevant genetic condition.

A third example can be found in EP 1465475,

the patent on sunflowers (Pioneer, granted2006), which claims sunflowers with resistanceagainst a certain pest, this feature having beenderived using similar methods as described byMonsanto's WO 20008054546 (the patent ondetected resistance). The same company,Pioneer, holds a European patent, EP 1042507(granted in 2008), which generally and verybroadly claims the use of methods such as QTLand MAB, and statistical evaluation based onthese methods (the patent on mixed tools forbreeding).

BASF holds patents such as EP 1268830 andEP 1294912 (granted in 2007), and EP 1311693and EP 1373530(granted in 2006), which could be called the patents on open door totraditional breeding. These patents are mainly

directed at genetic engineering, but alsoexplicitly open the door for claimingconventional breeding methods related to stressand drought resistance in plants. (It appearsthat BASF has been consistently following thisstrategic approach in many of its patents.)

In yet another example, OM Partners Hortica'sEP 1129615 patent (granted in 2003) is veryinteresting in several aspects. The patentviolates not only the prohibition of patents onessentially biological processes, it lists among

its claims statistical methods and formulas(which are excluded from patentability as well)for the evaluation of data in breeding. Further,the patent covers both plants andanimals. And,most surprisingly, the patent is completelylacking in any kind of invention, it simplydescribes very general, normal methods in breeding. This patent might be called thepatent on one size fits all.

Furthermore, even if recent patent applications

involving conventional plant breeding are notgranted in the end, they can have an impact onother breeders. As long as these kinds of patentscan be granted in Europe and elsewhere,breeders must cope with great legal uncertainty because their seeds and their work couldinfringe on one of these patents in the future. Inmany cases researchers and breeders avoid thistype of uncertainty by avoiding the use anyfeatures claimed by other companies. Thissituation obstructs the use of genetic materialand breeding methods, and ultimately hampers

innovation. In fact, it is well known that thefiling of strategic patent applications, even in


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cases where they will likely never be granted, isa strategy in the patent world that is used toblock true competition.

As long as the types of patents discussed in thissection are not definitely excluded, companieslike Monsanto will go on filing numerouspatents in this area, thus pushing competingcompanies out of the business, obstructinginnovation, and hampering diversity and choicein seeds and food.

4.2 Strategies of biopiracy and theft of

seeds

The case of the Enola beanoryellow beangivessome insight into how modern patent law canbe abused to steal seeds and promote biopiracy.

The yellow bean, long used in Mexico, wasclaimed by Larry Proctor as his invention. In1999, he successfully applied for a U.S. patent,which was granted (U.S. patent number5,894,079) and followed up by accusingMexican farmers of infringing his patent byselling yellow beans in the United States. As aresult, shipments of yellow beans from Mexicowere stopped at the US-Mexico border, andMexican farmers lost access to lucrativemarkets. It then took eight years for the patent tobe battled out successfully.35

More recent patents on methods like geneticfingerprinting are much broader and effectivethan the Enola bean (yellow bean) patent, andare also much more difficult to identify as casesof actual biopiracy. Patents on basic methods inplant breeding, such as genetic fingerprinting,QTL and MAB, can be applied on an undefinedand large group of plant species. They are aperfect tool for systematic biopiracy, as theyenable the patent holder to turn globalcommons, essential for food production, into

private property by simply describing themusing technical means. Many of these patentsare nothing but well-organised theft and globalrobbery supported by patent offices and certainpolitical institutions in industrialised countries.

Moreover, several patent applications show thatthis method of biopiracy is a systematically

35The story of the yellow bean patent can be found in

detail at the ETC website:

http://www.etcgroup.org/en/materials/publications.htm

l?pub_id=683

applied strategy. As Monsanto explains inpatent application WO 2008121291 (the patentof monsantosizing biodiversity):

The genetic base of cultivated soybeanis narrow compared to other field crops(...) Due to the narrow genetic base,

soybean is more likely to be impacted bydisease and insect attacks. (...) Exoticgermplasm possesses such key traits asdisease resistance, insect resistance,nematode resistance, an tolerance toenvironmental stress (...) Markersassociated with plant maturity facilitatethe use of exotic germplasm. Breederscreate crosses between exotic andcultivated germplasm. (page 81)

In the patent Monsanto claims the crossing of

soy varieties that are not common in the U.S.market. Because the origin of soy is in Asiancountries, it is likely that this patent aims at themisappropriation of biodiversity in thoseregions of the world in particular.

Similarly, Pioneer/Dupont claims crossing withso called exotic varieties of soy beans toachieve better resistance against common plantpests (WO 2006017833, WO 200605585, patents of biopiracy in exotics). Pioneer also

claims MAB for selecting high oil varieties inmaize (WO 2006055851, the patent Nr2 onMexican maize), which are known to becommon in Latin America but not in the UnitedStates.

In the past few years several cases of biopiracyof this kind at the EPO have been brought tolight by organisations like Greenpeace,Misereor, No Patents on Life! and theDeclaration of Bernefor example, Dupont'spatent on high oil maize varieties from Mexico(EP 744888,the patent Nr1 on Mexican maize),granted in year 2000, and Monsanto's patent onwheat from India (EP 445929 the patent onIndian wheat), granted in 2003. Both of thesepatents were revoked (or withdrawn) after legaloppositions were filed. The only way to protectthe centres of biological diversity from beingpirated in this way by international companiesis to issue a clear regulation in patent law,excluding all patents on conventional breedingof plants. The development of biopiracy can nolonger be sustainably and effectively controlled

by single opposition procedures.


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4.3 Controlling the chain of food

production

As a recent report by Greenpeace Germany(2008) showed companies such as Monsanto

have not restricted their property claims to seedand plant varieties, but have aimed to controlthe whole chain of food and biomassproduction. Greenpeace Germanys finding wereconfirmed by our research, which revealedseveral new examples of such broad-sweepingpatents.

We found that Bayer, for example, has claimedcertain methods and genetic resources with andwithout genetic engineering in its patentapplication WO 2006079567 (the patent onanything derived from plants), which is

directed at oil seed varieties. As the companyexplained in the patent application:

as used herein plant product includesanything derived from plants of theinvention, including plant parts such asseeds, meals, fats or oils (page 2)

Seminis, which is owned by Monsanto, hasclaimed patents on seeds and vegetables, suchas the patent on cauliflower (WO 2008042392)

and the patent on carrots (WO 2008049071),going as far as mentioning the process ofharvesting:

methods of producing carrotscomprising:

(a) obtaining the plant (...), wherein theplant has been cultivated to maturity;and

(b) collecting carrots from the plant.

(claim 35)

One can even find patents on beer and patentson noodles. The Carlsberg brewery claimseverything from breeding barley to beer(WO 20050879349), and the AustralianCommonwealth Scientific and IndustrialResearch Organisation claims breeding in wheatfor pasta, such as noodles. (WO 2005120214).

Recently, Monsanto has presented a new

example of its monopoly grasping strategy. In

patent application WO 2008150892, the patenton monsantosizing food feed fuel , thecompany claims breeding for soy beans with anoil content of between 23 and 35 %, which have been derived from conventional breeding andcombined with transgenic traits, such asherbicide resistance. Monsanto claims the

plants and their derived food products, listingthe whole chain of production in the claims. Forexample claim 7 reads:

A method of producing food, feed, fuelor an industrial product comprising thesteps of:

(a) obtaining seed from the plant ...

(b) planting and growing the seed intomature plant

(c) harvesting seed from the matureplant; and

(d) preparing food, feed, fuel or anindustrial product from the harvestedseed.

There have already been several granted patentsthat cover the food production chain from seedto food, such as the patent on broccoli(EP 1069819,granted 2002 for Plant BioscienceLimited), which set the precedent for the EPO todecide on this patent (G2/07). Further examplesof cases covering the chain from seed to food arethe patent on salad (EP 942643, granted in2008 for the Rijk Zwaan Zaadtelt en ZaadhandelB.V. company), and the patent on melons(EP 1587933, granted in 2008 for Syngenta). Inaddition, the Cargill company holds a Europeanpatent on breeding of Brassica plants, whichcovers industrial lubricant (EP 1100310, granted2008, the patent on use of plant oil) andDupont holds a patent on breeding in soy beans

(EP 0973913, granted 2005, the patent on tofu)that covers soy sauce, tofu, natto, miso, tempehand yuba, soy protein concentrates, soy proteinisolates, textured soy protein, soy milk andinfant formula. In another patent (EP 0537178,granted 2007, the patent on crushing seeds),Dupont used genetic fingerprinting to identifysoy with a certain oil quality and claim seeds,plants and crushing of the seeds for theproduction of oil.

The direct impacts that these patents may haveon farmers and consumers cannot be expressed

in concrete figures. Nevertheless, all of these


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patents contribute to a food market enmeshed ina spider web of exclusive monopoly rights thatmake it possible for companies to fix prices,distribute commodities and control access toresources. Normal food producers and smallertrading companies are likely to get lost in thismorass of intellectual property claims, while

some large companies will survive, cooperatingand also struggling with one other. These largercompanies will likely control the chain of

production, if not more, of the most importantfood and biofuel plants on the world market.(This scenario is already a reality in somemarkets, such as biofuel production using maizein the United States.) Ultimately, patents andmarket concentration will probably changeinternational markets dramatically; soaring

prices and rising hunger will most likely be theeventual results of these developments.


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5. Legal situation in EuropeUntil 1980 it was generally assumed that livingmaterials, including plants, animals, andmicroorganisms, were, due to their very nature,not capable of being invented and therefore notpatentable (Emmott, 2001). With the rise ofgenetic engineering, companies started lobbyingheavily for patents covering microorganisms,gene sequences, plants and animals. In theUnited States a patent on a microorganism in1980 (the so-called Chakrabarty case)36 was seenas a turning point, while in Europe the adoptionof the European directive On legal protectionof biotechnological inventions (98/44 EC) wasthe turning point. The European directive wasdiscussed for more than ten years and adopted

by the European Parliament in 1998. It wasadopted by the EPO in 1999. The directiveallows patents on plants, animals and geneticresources, and even on parts of the human body.

5.1 Plant varieties and genetically

engineered plants at the EPO

The EPO started granting patents on plants andanimals in the late 1980s and the beginning ofthe 1990s, but it was then stopped by a legal

challenge brought by Greenpeace in 1995(decision T356/93), where Greenpeace relied onthe European Patent Convention (EPC), Art. 53b,which excludes patents on plant varieties frompatentability. Following this challenge, no moreplants and animals were patented for someyears.

But the European patent directive 98/44drastically changed this situation, underminingthe prohibition of patents on plant varieties byallowing patents on all plant material thatcannot be identified as specific varieties. Article

4 (2):

Inventions which concern plants oranimals shall be patentable if thetechnical feasibility of the invention isnot confined to a particular plant oranimal variety

From its very beginning directive 98/44 wasdrafted as a European regulation specifically

36 http://en.wikipedia.org/wiki/Diamond_v._Chakrabarty

serving the interests of industry. The patentdirective was then adopted by the EPO, and,following this, the EPOs Enlarged Board ofAppeal decided that the previous decision onthe Greenpeace case should no longer beapplied (G1/98).

Paradoxically, this has led to a situation wherepatents on GE plants can be granted, and caneven cover plant varieties, as long as specific,single varieties are not claimed. Since 1999, thepatent office has granted more than 1000patents on seeds and plants based on thisquestionable legal construct. Put simply, theprohibition on patents on plant varieties (which

is still part of the EPC) has not been relevantsince then. This has been especially true forplants derived from genetic engineering (GE),which incorporate genetic constructs that can betransferred from one plant species to another.Patents on GE seeds are routinely granted by theEPO; they cover all relevant material, such asseeds, plants and harvest, and subsequentcrossings and generations.

5.2 Conventional breeding

Because conventional breeding has becomemore and more important in comparison togenetic engineering in the last few years (forvarious reasons discussed in section 3, above), asecond prohibition in European patent law hasbecome an issue of major dispute. According toEPC Art. 53b it is forbidden to grant patents onessentially biological methods for theproduction of plants and animals. Europeanpatent directive 98/44, however, also offers anindustry-friendly solution to this problemthelegal definition of essentially biological

processes can hardly be applied and thereforeis open to a broad range of interpretations.Article 2 of 98/44 EC reads:

A process for the production of plantsor animals is essentially biological if itconsists entirely of natural phenomenasuch as crossing or selection.

The Board of Appeal at the EPO decided thatthis legal definition of essentially biological

process must be interpreted by the Enlarged


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Board. In decision T83/05 (the starting point forG2/07) the Board of Appeal held:

"The wording of Article 2 (2) BiotechDirective and Rule 23b (5) EPC is, in theview of the board, somewhat difficult tounderstand. On the one hand, onlyprocesses which consist entirely ofnatural phenomena are considered to beessentially biological processes for theproduction of plants. On the other hand,crossing and selection are given asexamples of natural phenomena. Thisappears to be self-contradictory to someextent since the systematic crossing andselection as carried out in traditionalplant breeding would not occur innature without the intervention of man."(page 336/37, paragraph 53)

Thus the way was opened for the case of the patent on broccoli , EP 1069819 (G2/07), andthe patent on wrinkled tomato, EP 1211926(G1/08).

Under these conditions, companies likeSyngenta follow a simple line ofargumentationthe exemption frompatentability should only be used in those veryrare cases without any technical interventions.According to Syngenta, the exemption shouldbe applied to natural processes for selection as

described by Charles Darwin, but not in plantbreeding:

While such natural processes areexempted from patentability, biologicalprocesses of plant breeding whichcomprise technical steps and represent atechnical process should be patentable(...) Under these prerequisites alsoprocesses which are only based oncrossing and selection are in generalpatentable as long as they represent atechnical teaching. (Syngentasstatement in the G2/07 case, page 13)

The consequences of this line of argumentationcan be seen in many of the patent applicationsand granted patents listed in this report.

5.3 Scope of patents

There is a regulation in Europe that is unique inpatent law worldwide (see Tvedt, 2008). Underdirective 98/44 EC, the scope of patents onprocesses for the production of plant and

animals can extend to later generations and allrelated products from crossing and selection.

According to international patent law standards,patents on processes normally end with theproduct directly obtained by any givenprocedure. In Europe, however, the scope of

patents involving the breeding of plants andanimals goes beyond this. As Article 8 (2) ofdirective 98/44 EC reads:

The protection conferred by a patent ona process (...) shall extend to biologicalmaterial directly obtained through thatprocess and to any other biologicalmaterial derived from the directlyobtained biological material throughpropagation or multiplication in anidentical or divergent form andpossessing those same characteristics

Thus, under this regulation, a process formarker assisted breeding in plants or animalswould not only cover the method, but all relatedseeds and plants, even after further crossing andpropagation. This offers immense potential forproblems with these patents; based on trivialtechnical processes, a patents' scope can easily be extended to misappropriate the geneticresources themselves, at least as long as theyhave the specific patented characteristics.

In addition, the same problem applies if seedsor animals are directly claimed as products. Inthese cases all further use of these seeds iscovered by the patent, no matter if the seeds aresold directly or first used for crossing andselection. (This regulation on patented productsis in place not only in Europe but also in otherindustrialised countries, such as the UnitedStates.) This extremely broad patent scopecreates far reaching dependencies for farmers,breeders and any other producer downstream inthe processing of food and biomass, and can

also lead to the accumulation of patents in seedsand plants after each step of crossing.

5.4 How to patent something that

already existed

The patenting of seeds selected by methods likemarker assisted breeding violates a very generalprincipal in patent law. Patent rights apply onlyin relation to an object which would not exist ifit had not been created by an inventor.Otherwise, if this principle did not exist, things

that are already in existence, and are perhaps


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already being used for some purposes, could bemonopolised by patents. Clearly, such asituation would be contrary to the fundamentalprinciples of modern patent law (see forexample Haugen, 2007).

Hence, this principle can only be put aside in a

few, very distinct cases. For example, it can beput aside when a compound already inexistence in nature reveals surprising newqualities after technological processing. A well-known example of this from patent literature isthe case of a toxic mushroom that exhibits achemical compound that can be used forhealing intoxication (the so-called Antanamidcase, a decision taken in 1977 by a Germancourt).

In contrast, the use of tools like genetic

fingerprinting, marker assisted breeding, andanalyses of oil and protein are aimed at findingqualities in seeds that have a high probability of being found (that are fairly obvious); therefore,the use of these tools to find these qualities isnot an invention.37

5.5 European patent system in conflict

report future of seed en

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