News - March 4, 2010

Should plant patent law be changed?

The Netherlands is an important source of new plant species and the biggest exporter of seeds, bulbs, seedlings and cuttings. This is all under threat now that patent law is putting the brakes on innovation amongst plant breeders. Should the Dutch parliament get the law changed?

The Netherlands is an important source of new plant species and the biggest exporter of seeds, bulbs, seedlings and cuttings. This is all under threat now that patent law is putting the brakes on innovation amongst plant breeders. Should the Dutch parliament get the law changed?
Until very recently this was not an issue in the plant breeding world, but now many plant breeding companies expect that fewer new species will be developed in the coming years.
'The patent laws put up barriers and work to the advantage of the big companies', says director Ad van Elsen of Plantum NL. 'This puts the brakes on innovation by smaller companies.' Plantum NL, the Dutch organization for plant breeding companies, formulated a new position on patent and breeding laws last year.
Plantum wants the restrictive patent law on plants (the genetic building blocks in particular) to be pruned, and would like breeders' rights to be the only system for protecting plant breeds.
Breeders' rights have been valid for agricultural and horticultural crops in Europe since the 1960s. These rights give the breeder of a new species a temporary monopoly if the species is distinguishable in appearance from existing species, can be consistently reproduced, and is homogeneous. Other breeders may not produce and sell this species, but they are allowed to use it as a parent plant for further crossbreeding: the 'breeders' exemption'.
Patent law, however, offers the possibility of not only protecting new biotechnological breeding methods, but also patenting genes with useful characteristics. Other companies are not allowed to use this gene for further breeding unless they buy a license from the patent holder. The breeders' exemption does not apply and this kind of patent overrides breeders' rights. The more genes are patented, the less effective breeders' rights are, and the less scope for innovation there is. There are fewer and fewer plant breeding companies, as they are being bought up one by one by the big agrochemical firms. The global big four, Monsanto, Pioneer-DuPont, Syngenta and Limagrain, now control over thirty percent of the world's agricultural seed supply.  Ten years ago it was twelve percent.
There is a big concentration going on in horticultural seeds as well. Major Dutch breeding companies such as Royal Sluis, Bruinsma, De Ruiter Zaden and Van der Have are now in foreign hands. A handful of companies now dominate the global supply of vegetables such as lettuce, aubergines and tomatoes.
'The current rules of the game will put the whole sector into the hands of companies such as Monsanto, Syngenta and Bayer', says the Wageningen plant breeder - who wants to stay anonymous so as not to tread on his client's toes. 'As long as we go on following the present rules and regulations, we keep taking small steps towards the privatization of genetic starting material, whereas genetic material has always been seen as part of our common heritage.' According to him, it is the increasing number of patents on plant characteristics that leads to this monopolization of genetic material.
There are currently 4500 patent applications at the European Patent Organization. The patent application process takes an average of seven years. Anyone may see the applications; no one knows whether they are granted. This means years of uncertainty. Companies have to invest a lot of effort and legal advice in assessing which techniques and plants they could develop further.
Van Elsen, director of Plantum NL: 'The number of patents has risen dramatically and access to these patents is difficult for other companies. The license fees that have to be paid are very high. On top of that there are often limiting conditions. Plant breeders' freedom is limited by patent law.'
 Although it was intended to stimulate innovation, patent law can prevent companies from further developing a species. An example: If company X wants to sell maize seed in the US, it needs a license from market leader Monsanto in order to build resistance to the pesticide Round-Up into its own species. Most American maize farmers use this pesticide. Monsanto knows that. So that will mean tough negotiations for company X, since Monsanto is not obliged to grant a license and can name its price. For this reason, many plant breeders do not even start on this process. The patent office decides whether a new discovery is innovative - a condition for granting a patent - on the basis of current technology. Other companies can then dispute the decision. Big companies try to get a strong patent out of a weak application by putting many patent attorneys on the case. Small companies, on the other hand, do not always have the knowledge or the money to fight for a patent, to go to court if their application is not honoured, or to defend themselves against opposition from bigger companies. It is also impossible for small companies to keep an eye on patent applications that affect their work. But there seems to be a change under way in the granting of patents, at least in the United States. The patent office there is rejecting patent applications on gene products more often, on the grounds that they are not innovative enough. Nowadays, every PhD student of plant breeding can describe the gene sequence for a particular characteristic. If you tighten up the criteria for originality, fewer patents on plant genes are granted. But whether this is the precursor to a stricter patent assessment at the European Patent Organization is by no means certain. There will be an important test case later this year, when the European board of appeal will give its verdict on an objection to two patents for organic methods of breeding broccoli and tomatoes. If this objection is quashed, traditional crossbreeding and selection methods will come under the patent law too. Plantum NL has proposed that the patent law be adapted. By integrating breeders' exemption into the patent law, genes and genetic components in plants could be made freely available for the development of new species. New methods and techniques should continue to come under patent law, though. The Wageningen plant breeder is critical of this position taken by the plant breeders' organization. 'Plantum NL supports existing family companies, but they are just as commercial as the Monsantos of this world. Medium-sized seed companies such as Enza, Rijk Zwaan, Bejo and De Ruiter Zaden were all up to their ears in patents. But then Monsanto joined their vegetable seed club! Suddenly the patent game was no fun any more, because Monsanto's wallet was much fatter than theirs.'
Van Elsen: 'Family companies were forced to take up a position on patents too. Otherwise they would not have been in a position to negotiate with companies that did do so.' Companies vary in their business model, says Van Elsen. For the index-linked multinationals it is all about maximizing profits and raising their stock exchange value, whereas the non-index-linked family companies are more concerned about continuity and are content with moderate growth.
This is an important issue for the Netherlands. The value of the international trade in seed has gone up by five times in the past twenty years. The Netherlands is an important source of new plant species and the biggest exporter of seeds, bulbs, seedlings and cuttings. But through mergers the number of Dutch companies in the top ten horticultural breeding firms is dropping fast. If this goes on the Netherlands will no longer be at the centre of the plant breeding world, says the Wageningen plant breeder. 'Then the R&D labs will no longer be in Wageningen or Enkhuizen, but at UC Davis in the VS, in Montpellier in France and in Asia. And that will affect Wageningen UR to, as a provider of education and research in this sector.'

Position on Plant Breeding
Niels Louwaars of the Dutch Centre for Genetic Resources (CGN) in Wageningen and six colleagues wrote a report about the future of plant breeding in the Netherlands. He expects the ministries of Agriculture, Nature and Food Quality and Economic Affairs to formulate a position on the subject this month. Only then will the report be made public and will the Dutch parliament make a decision on it.