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close this bookBiotechnology and the Future of World Agriculture (GRAIN, 1991)
close this folderControlling the profit
View the document(introduction...)
View the documentAn historical appraisal
View the documentThe great reversal
View the documentTightening the grip: the push for patents on life
View the documentBox: Twelve Reasons to say no to life patents
View the documentThe implications

The implications

When experts squabble over legal mechanisms, the real implications of life patents are often muddled and lost. A patent is, after all, a concession by society to a private inventor. A monopoly is granted in return for perceived advantages to society. So what does society get in return? 'Innovation!'some point out quickly. 'Technological progress!' others cry. The assumptions are plentiful and bold, but the hard empirical data supporting them difficult to find. In a press release presenting the EEC patent directive, the Commission points with a sense of panic to the position of biotech competitors in the United States and Japan, and warns that Europe should not stay behind. (37) On the other side of the Atlantic Ocean, North American citizens are told that the Europeans and Japanese are closing in quickly in the field of biotechnology, and that the US needs further to strengthen its patent laws. It seems that the 'biotech-race' itself forms sufficient justification to extend monopoly patents to life. But when one goes beyond the logic of such blind, competitive rhetorics, and takes a closer look at what life patents really mean for society, the emerging picture is not as positive as the patent-pushers might want us to believe. In Box 7.1 an overview of possible implications is reproduced. Without trying to be complete or exhaustive, the 'twelve reasons' do give considerable food for thought.

In late 1987, top officials of the US biotechnology company Genetics Institute Inc. gathered at their headquarters to settle an important issue: which version of a new clot-dissolving drug to invest in. With money to develop just one of the four potential products, the company's scientists argued for the one that had the most positive research results. Then the attorneys weighed in. They pushed a drug that had not tested as well, but would command the broadest patent. And they won hands down. 'Researchers used to be up in arms if such crass decisions were made', says the company's patent counsel Bruce M. Eisen. But now 'tine strength of the potential patent position is a leading factor in what research to pursue'. (38)

This ominous example from the pharmaceutical sector could have been taken from any other. Rather than simply stimulating innovation, the patent system applied to living matter redirects attention towards those products that provide for the broadest and easiest patent protection. Rather than promoting competition in research and development, it limits the involvement to those who can afford to pay for the royalties or have other patents to offer in exchange.

In the field of agriculture, the patenting of plants and animals and their genetic materials would make it impossible for breeders freely to use each others' breeding material. Using a plant or animal with something patented in it to breed something better would then require permission from and payment to the patentee. In plant and animal breeding, the unrestricted use of existing varieties and races for further improvement forms the very backbone of the whole sector. Abolishing this practice by the introduction of industrial patent systems would mean quite simply the destruction of what is left of the independent plant-breeding industry. It would also effectively bring animal-breeding, currently in many countries still under control of farmers or the state, under control of large TNCs.

Jack Kloppenburg, in his study on the transformation of the seeds industry, gives a striking example of the early patenting days in the United States. (39) By the end of the 1950s, hybrid maize had been available to US farmers for more than two decades. A major problem for the breeders offering hybrid maize was the fact that the inbred lines used for the production of the hybrids had to be de-tasselled manually to avoid self-pollination. This delicate manual operation involved the training, organizing, supervising and paying of some 125,000 labourers each summer, costing the seed companies an estimated $ 10 million annually. D. F. Jones, a plantbreeder working in the public sector, had been pioneering the production of hybrid maize. He developed a technique to produce 'cytoplasmic male sterility' (CMS), which eliminated this painstaking and costly manual process. This technique incorporates genetic factors in the maize that make the male parent lines sterile, thus avoiding self-pollination and the need for de-tasselling.

Jones, unusually for public sector breeders at the time, took out a patent on this revolutionary technique and assigned it to the public institution he was working with. The private seed industry did not take long to adopt this technology, but refused to pay royalties to the public sector. Only after being forced by litigation several years later, in 1969, did the companies start paying royalties. Although the use of CMS lines reduced the de-tasselling cost for seed companies by as much as a factor of 25, the price of hybrid maize seed increased by over six per cent from 1958, when companies started using the male sterility process commercially, to 1965, when the process was ubiquitous. DeKalb, now a giant in the US maizebreeding industry, promised that, 'If everyone stops detasseling, and passes all the benefit on to the consumer by lower prices, then the farmer is the only one who gains.' The opposite proved to be true.

The male sterility story would probably have developed quite differently had it taken place in the 1990s. Firstly, it is most likely that the technique would have been developed by the private sector itself. The bulk of current hybrid maize technology in North America is staunchly controlled by a few multinational companies. Pioneer, DeKalb/Pfizer, Ciba-Geigy, Sandoz and Upjohn together govern over two-thirds of the US maize seed market. (40) Even if it had been developed at a US university, it is likely that it would have used funds from private industry with the corporation retaining the property rights. Secondly, the company in question would not only have patented the process, as Jones did, but also the genes involved, the cells and all maize plants and products derived from it. Thirdly, it is likely that the company would not have limited its patent claim to maize only, but to any plant into which the new process and genes could be incorporated. And lastly, and perhaps most importantly, the company might choose not to license the technology to other breeders, but to retain exclusive use for its own varieties. With such a crucial technique as male sterility, which has been incorporated into virtually every maize plant, this would extend one company's control to dominate the entire maize seed market.

Another feature of the patent system is that it allows for multiple patents as well as for multiple claims within a patent to be made on a single product. In the end we will be in a situation where a single plant, animal or microbe contains many different patented parts. What this can mean for an average plant-breeder might be illustrated with the following example:

Sometime in the near future Dr Smith, a well-respected plant breeder, wants to cross an existing widely used variety of maize, 'Higrow', with another,'Reliant', in order to produce a new variety that incorporates a useful resistance from 'Reliant' into 'Higrow'. First he has to find out whether there are any patented genes, cells or other genetic information in the two varieties. He discovers that 'Higrow' contains patented materials from six different chemical companies, while 'Reliant' has three patented genes in it. Further, he finds out that three special techniques he planned to use for the crossing are also patented. Before Dr Smith used to doing his work without restrictions - can get his new variety to the market, he has to seek permission from nine companies and pay them royalties, and additionally negotiate with three other companies to use the breeding techniques. Dr Smith, along with many of his colleagues, will probably decide to drop out of business and look for another job. If, however, he manages to get the required permissions and pay all the royalties involved, he will have to raise the price of his new variety considerably in order to recoup some of the costs. So not only Dr Smith, but also the farmers - and in the end the consumers - lose out. (41)

Before deciding to sell out, Dr Smith might encounter a few other problems resulting from life patents. A carefully drawn-up patent can claim intellectual property on characteristics independent from the genetic maserial itself. US Patent No. 4,581,847 is for cereals with a high content of a specific protein: tryptophane. The patent document explains that' . . . mutant plants have an endogenous free tryptophane content of at least ten times the amount of corresponding non mutant . . . plants' fall within the scope of the invention, (42) irrespective of the genes that code for it. If Dr Smith happens to be in the business of breeding cereals with a high content of this protein, he is well advised to ask the patentee in question to continue; this whole field of work might already be the property of the patentee. As UPOV pointed out in one of its documents,43 such broadly defined patents could cover a whole range of already existing or still to be produced crop varieties, and can block entire fields of work in the breeding sector. This reportedly has already happened to sun-flower breeders in the USA, who received notice from one company, Sungene, that they had better stop working on sun-flower varieties with high oleic acid content. Sungene had obtained a US patent for this characteristic, and considered anyone else working on it as infringing the patent. (44) In 1990, the patent was revoked, but not before haying 'affectively slopped' research on high oleic acid content in sun-flowers anywhere outside the company's laboratory. (45)

Apart from increasing the cost of the seed, the patent system extended to life forms penalizes the farmer in other ways. When using seed containing patented genetic material, it would be illegal for farmers freely to use part of the harvest for next year's sowing, as the germplasm in the seeds would continue to be owned by the patentee. The farmer would thus have to return to the market each year to purchase seed, as is now the case with hybrid crops. This would virtually eliminate a farming practice that is widespread in developing and developed countries - that of using saved seed for planting the following season. According to industry analysts, over a third of all seeds planted worldwide are supplied in this way, (46) and other estimates give much higher percentages of home-grown seed. Graph 7.2 shows the extent to which European farmers use certified seed for small grains. Most of the non-certified seed is home-grown. Graph 7.3 shows the extent to which US farmers use home-grown seed for specific crops. While use of such seed in the US and Europe is substantial, especially for nonhybrid crops, the use of home-grown seeds in developing countries is far greater.

The elimination of the use of home-grown seed would dramatically increase the farming community's dependence on the plant-breeding and biotechnology industries. It would also mean a prodigious loss of genetic diversity that is maintained in the field by farmers through the selection and use of their own seed. Finally, the costs to the farmer would be considerably increased. William Lesser, professor at Cornell University, estimated that a complete prohibition of farmer-saved seeds would cost American farmers over $500 million annually for soybean, wheat and cotton alone. (47) The same expert calculates that for British wheat and barley growers these costs would be up to $80 million, (48) a figure that would be considerably higher for other European countries where home-grown seed is more commonly used. In the hypothetical case that home-grown seeds would be eliminated worldwide, farmers would end up paying an extra $6 billion annually! (49) But Lesser's message is simple enough: 'Farmers, though, must overcome a psychological resistance to having the uses of their crops dictated by the legal system.' (50)


The use of certified cereal seed EEC, Selected countries


Home grown seeds in the USA - In % of all seeds sown for each crop

While the implications for crop growers are tremendous, those involved in raising animals might be even more seriously affected. In many countries genetic improvement of cattle is largely dominated by farmers and their co-operatives, and supported by public institutions. On many dairy farms, artificial insemination is combined with on-farm breeding using outstanding bulls raised by the farmers themselves. This practice has resulted in immense increases in the production of meat and milk, to the extent that most industrialized countries now produce surpluses. The biotechnology industry is now throwing its weight behind this system and will end up patenting the results. Dairy farmers will have to be careful when they inseminate their cattle with sperm containing patented genes. If a bull, resulting from such an insemination, runs around doing his biological duty, the farmer might find himself in court.

There are people who argue that life patents will especially help small breeding and biotech companies to survive. But a look at who applies for biotech patents might put such claims in context. A survey of patent applications to the European Patent Office up to April 1989 revealed 147 applications for plant-related patents.(51) Graph 7.4 shows the result if the applications are ordered by company. A full one-third of all applications come from just three large corporations: Lubrizol, Monsanto and Ciba-Geigy. All TNCs together are responsible for 56% of the applications. The TNCs, together with five major biotech companies, most of them heavily involved in contract research for TNCs, control almost three-quarters of all applications. The picture overall is that the patent system is by and large biased towards large corporations.

Ordered by country, the same data undermine one of the main arguments of the European Commission in pushing for strong patent protection. The Commission claims that life patents are the key to Europe's competitive advantage over the US industry. The US industry itself is, however, by far the largest applicant for European plant biotech patents. A strong European patent system is by no means a guarantee that the Europeans will profit most from it. It might just as well be the other way around.

If society allows for the industrial patent system to be applied to life forms, a turbulent 100 year history will have come to an unfortunate end. In 1883, a handful of industrialized countries, bringing along a few of their colonies, signed the Paris Convention in the midst of a debate in which many industrialists considered the patent system as a paradise for parasites.


European plant patent applications - EPO, by applicant

Those afraid of parasites were tranquillized with a whole series of concessions. Compulsory licensing would form a guarantee against abuse, and vital sectors such as food, chemicals and pharmaceuticals would be excluded. Living matter was not even under discussion. A century later, the roles are reversed. The parasites are now those who fail to provide for patent protection on everything. Plants, animals and humans are, with exceptions, the last survivors outside the monopoly system. Once they have been included, the circle will be complete.

Notes and references

1. J. Geigy-Merian et al., Ein Beitragzur Frage der Einf hrng des Patentsch tzes in der Schweitz, Switzerland, 1883. (Geigy-Merian co authored this publication with 10 other Swiss industrialists.)

2. J. Duesing, 'Patent Protection for Inventions from Agricultural Biotechnology, in 'Patenting Life Forms in Europe', Conference Proceedings, ICDA Seeds Campaign, Barcelona, 1989.

3. W. H. Duffey, 'Intellectual Property Needs of Multinationals', in 'equitable Patent Protection for the Developing World', Cornell University Staff Paper 89-36, Ithaca, USA, November 1989.

4. UNCTAD/WIPO, The Role of the Patent System in the Transfer of Technology to Developing Countries, UN, New York, 1975.

5. Ibid

6. Banco Interamericano de Desarrollo, Progreso Economico y Social en America Latina. lnforme 1988, BID, Washington DC, 1988,p.329.

7. UNCTAD/WIPO, 1975, op. cit.

8. Resolution adopted by Committee of Transfer of Technology of UNCTAD. 14th Meeting, 5 December 1975, UNCTAD, Geneva.

9. John Barton, 'Legal Trends and Agricultural Biotechnology: Effects on Developing Countries', in Trends in Biotechnology,Vol. 7, October 1989.

10. Surendra Patel, 'Intellectual Property Rights in the Uruguay Round', in Economic and Political Weekly, New Delhi, 6 May 1989, pp.978-93.

11. OECD Council, 22 January 1974, quoted in Patel, 1989, op. cit.

12. Ministerial declaration on the Uruguay Round, Paragraph (v) of section B, as quoted in Patel, 1989, op. cit.

13. W. H. Duffey, 1989, op. cit.

14. US-ITC Report. Figures published in Bioteknologi Patenter: Et Internasjonalt Perspective, Newsletter No. l/2,1989. Norwegian NIEO Group, Oslo, 1989.

15. Quoted in Patel, 1989, op. cit.

16. The US-ITC figures, for example, were given to the Norwegian embassy in Washington by US government officials. The USA considers Norwegian patent laws too weak, especially on pharmaceuticals.

17. UNCTAD, Commodity Yeorbook 1989, UN, New York, 1989.

18. 'The Battle Raging over Intellectual Property', in Business Week, 22 May 1989.

19. 'Brazil says US Sanctions Breach Standstill Deal', in Financial Times, 28 October 1988.

20. P. R. De Almeida, 'The New Intellectual Property Regime', paper presented to the conference 'The Uruguay Round of GATT ', Bergamo, 21-23 September 1989.

21. Arthur G. Cook, 'Patents as non-tariff trade barriers', in Trends in Biotechnology, Vol. 7, October 1989.

22. 'Fighting Trespassing on Intellectual Property', Washington Post, 6 December 1987. Quoted in Bioteknologi, Patenter, Internasjonalt Perspectiv, 1989, op. cit.

23. 'Fighting Trespassing on Intellectual Property', op. cit.

24. Sistema Economico Latinoamericano, 'Capitulos de SELA', SELA, Caracas, October/ December,Caracas,1988.

25. P. R. De Almeida, 1989, op. cit.

26. See, for example, Pat Mooney, 'The Law of the Seed', in Development Dialogue, No. 1-2, Uppsala, 1983.

27. J. G. Boonman, 'Plant Patenting as seen by a Plant Breeding Professional' in 'Patenting Life forms in Europe', Conference Proceedings, ICDA Seeds Campaign, Barcelona 1989.

28. Draft EEC Council Directive on the legal protection of Biotechnological inventions. EEC Doc. Com (88)-496, Brussels 1988.

29. 'Any plant or part of plant or any grouping of plants or parts of plants, which, by reason of its characteristics, is regarded as an independent unit for the purposes of cultivation or any other form of use'.

30. EPO, Standing Advisory Committee before the European Patent Office, l7th Meeting,Munich29-30November 1989. EPO Doc. SACEPO/XVII/5,pp.5-6.

31. European Patent Convention, Article 53-b.

32. Council of Europe, Committee of Experts on Patents, 'Memorandum on the Unification of legislation', The Hague, 28 November 1960. (Doe. EXP/Brev (60) 7.)

33. Council of Europe, Committee of Experts on Patents, 'Unification of Laws Convention, Amendment suggested by the Austrian Delegation', Strasbourg, 10 May 1963 (Doe. EXP/Brev. (63) 7).

34. EEC Doc. COM (88)-496, op. cit.

35. EPO, Doc. SACEPO/XVII/5, op. cit., p.11.

36. W. Lesser,'Patenting Seeds: What to expect', Dept. of Agricultural Economics, Cornell University, USA, January 1986.

37. EEC Commission,'A European patent law for Biotechnology', Information Memo, Brussels, October 1988.

38.'The Battle Raging over lntellectual Property', 1989, op. cit.,p.80.

39. Jack Kloppenburg, 'First The Seed', Cambridge University Press, New York, 1988, pp.113-116.

40. J. Kloppenburg, 1988, op. cit., p.298.

41. Example from 'Information Release: Patenting Life to become Legal in the EEC', ICDA Seeds Campaign, Barcelona, 1988.

42. United States Patent Nr.4,581,847, Hibbert et al., April 15,1986.

43. UPOV, 'Industrial Patents and Plant Breeders' Rights', Records of a Symposium, UPOV Publication Nr.342(E), p.80.

44. C. Fowler et al., 'The Laws of Life ', in Development Dialogue, Dag Hammarskjold Foundation, No.1988: 1-2, Uppsala, 1988, p. 244.

45. Agbiotechnology News, January/February 1990.

46. James W. Kent,'The driving force behind the restructuring of the global seeds industry', in Seed World, Vol.124, No.7, June 1986.

47. W. Lesser, 1986, op. cit.

48. W. Lesser,'Anticipation UK Plant Variety Patents',6,EIPR,1987,pp.174-176.

49. Assuming 37% of seed worldwide is home grown and with current total commercial seed market valued at US$ 17 billion.

50. W. Lesser, 1986, op. cit.

51. Agnes Vertier, 'Biotechnologies et Brevets: Report d'Etappe'. CNRS/INRA/MRES, France, February 1989. Unpublished. Survey was done by scanning the database 'EPAT'.