In the seed industry, utility patents dominate as the most lucrative form of intellectual property.
A utility patent on a new plant variety grants 20 years of market exclusivity to the developer, who can then license it with essentially zero restrictions. While the patent system is designed to encourage competition and innovation, it has had the opposite effect in the world of farming and plant breeding: The most powerful seed companies have been able to leverage patents alongside restrictive licensing agreements to exert inordinate control over the market, subverting the fundamental goals of the patent system and catalyzing the transition of U.S. agriculture to a system dominated by large-scale, contract farming of commodity crops. Large corporations are repeat players in the system, spending millions to navigate the legal waters in order to recoup even bigger profits down the road in licensing fees.
Although “products of nature” continue to be unpatentable, the Supreme Court in 1980 opened the door to a ballooning interpretation of patentability that now covers plants, seeds, plant parts, chemical derivatives, and even traits. When a seed or trait is patented, anyone else who develops, possesses, or uses it without a license is an infringer, and the law does not require a showing of knowledge or intent for the patent owner to prevail in court.
How did we get here? A brief history of seed IP
Congress twice created specific intellectual property protections for plants. The 1930 Plant Patent Act and 1970 Plant Variety Protection Act both come with important exceptions: the former only applies to asexually reproducing plants and the latter permits farmers to save seed for on-farm use and breeders to use seed for research and breeding purposes. The laws represent a meaningful effort to balance the needs and rights of holders, farmers, and consumers, an idea that has been completely eviscerated by the allowance of plant utility patents, and the text and legislative histories of both Acts underscore the idea that Congress never intended utility patents to apply to seeds and plants.
In 1980, a sharply divided Supreme Court abruptly endorsed a patent on a genetically engineered bacterium, and applications covering plants followed. The new logic governing patentability is that the addition of a single gene transforms the entire organism from a “product of nature” to a “product of human invention,” even though the tens of thousands of other genes are left untouched. Many patented crops involve a single gene insertion that makes the plant resistant to an herbicide chemical (e.g., Roundup) that is sold by the same company. Efforts to improve nutrition, yields, soil health, local adaptability, and other beneficial characteristics are less profitable to the industry and thus scarce.
Contracts governing the usage of patented seeds have evolved into significantly more than a simple transaction of money for goods. These agreements allow patent owners broad control over how their seeds are used, and seed companies have taken the ball and ran way past the endzone. Purchase agreements (or “Technology Stewardship Agreements,” as Bayer affectionately calls them) allow the seed developer to squeeze out as much profit as possible and intrude significantly on farmers’ personal privacy, including access to private records and land to take crop samples, all while pinning most of the responsibilities and liabilities on the farmer.
Patents as a driver of biopiracy
Patents pry important genetic and cultural heritage from communities, often in direct violation of patent law’s novelty and nonobviousness requirements. New plant varieties that are not well-documented may escape the eyes of even the most diligent of patent examiners, and the original breeder can suffer serious financial, reputational, and legal harms when examiners fail to locate information about an existing variety and erroneously grant an application.
There are huge variations in grant rates between patent examiners that give rise to doubts about the fairness and integrity of the process. There are 34 examiners spread across 3 groups that examine plant utility patent applications. The first group has an average grant rate of 96%, with individual examiner’s rates ranging from 90% to 98%. The second and third groups, however, have an average grant rate of only 74% and 79%.
These disparities may be explained by the fact that examiners can specialize in a particular crop type, which could be more or less amenable to patentability at baseline based on its cultivation history and genetics. genetics. Also, the two supervisory examiners rejected applications at enormously higher rates than the rest of the examiners, which may be because the Manual of Patent Examining Procedure (MPEP) recommends that examiners enlist the help of their supervisor for tough cases, which may be more likely to be rejects.
There are several factors pointing in the opposite direction, however. Given that many forms of agricultural knowledge are disseminated within local communities (often orally) information about new varieties may be difficult to locate. Although a general framework is provided for patentability searches, examiners have wide discretion to design their own search strategy, and assessments of the value of databases and references are always up to the individual examiner, highlighting the need for thorough searches and effective documentation of plant germplasm.
The root of the problem lies in the scope of patentable subject matter. Regardless of whether a genetically engineered seed is a “product of nature,” a more pragmatic and limited approach that takes the unique nature of seeds into account is warranted when the future of our food system hangs in the balance.
Moving toward a resilient and sustainable seed system
The existing patent system promotes monoculture farming of commodity crops with profits in mind rather than public health. Private ownership of genetic resources threatens food security, ecological sustainability, genetic diversity, and stifles important plant breeding research, and the patent system effectively rebrands our most important natural resources as commodities. Seeds are living things first and foremost, and claims to ownership—especially monopoly ownership—must be counterbalanced by concerns of human and ecological health and market fairness.
Congress should restore the Plant Variety Protection Act as the exclusive form of intellectual property rights covering sexually reproducing seeds. In the meantime, the USPTO should clarify its patent examination procedures and designate an effective way for breeders to submit new varieties without having to file an application or pay a fee. Finally, courts can also play an important role in moderating fairness by striking out unconscionable provisions in seed contracts. These contracts are classic “contracts of adhesion,” and the huge imbalance of power between buyer and seller warrants stricter judicial scrutiny.