CASRIP Newsletter - Summer 1999, Volume 6, Issue 1
The Changing Landscape for Patenting Transgenic Plants in Europe
by Donna O. Perdue
Agricultural biotechnology is a rapidly developing industry in which the global market for crop protection and genetically enhanced seeds alone is estimated to be $50 billion per year.1 In the United States, the use of genetically engineered, or "transgenic" crop varieties, has risen dramatically since approval was granted in 1996: in 1999, about half of the seventy-two million acres planted in soybeans is expected to be genetically engineered, as will more than half of the thirteen million acres of cotton and about twenty-five percent of the eighty million acres of corn.2 Companies involved in developing genetically engineered crops have invested many years and millions of dollars on research and development of commercial products such as corn containing the gene for a toxin that kills insects when they eat the plant, or crops that are resistant to common herbicides used to kill weeds.3 Companies have spent billions of dollars to acquire other companies that control commercially useful genetic engineering technologies and the genetic material used to develop these new crops. Strong intellectual property protection is seen as essential to recoup the money spent on developing genetically engineered crops and protect a company's control of these crops.4
The biotechnology industry in Europe has not developed on the same scale as in the United States.5 One factor hindering the biotechnology industry in Europe is the lack of certainty concerning intellectual property protection for biotechnological inventions.6 Companies want to know they will receive strong patent protection for transgenic plants before they invest in development, testing, and distribution. There are currently two avenues for obtaining a patent in Europe. One is through the European Patent Office (EPO) acting under the authority of the European Patent Convention (EPC), in conjunction with national patent offices.7 A single application is submitted to the EPO, where it is examined and a "European Patent" is issued. The European Patent is actually a bundle of national patents issued by the national patent office of each state designated in the EPO application. The other route for obtaining a patent is by applying directly to the national patent office of each state in which protection is desired. The national patent office is responsible for examination and granting (or rejecting) applications made directly to that office.
The EPO currently grants patent protection for processes and genetic materials used to create transgenic plants, but does not allow product claims to transgenic plants. The EPO considers modification of a plant's genetic material equivalent to creating a new plant variety, and the EPC expressly prohibits patenting plant varieties. The EPC classifies plant varieties as unpatentable subject matter, even when the transgenic plant would otherwise satisfy the criteria for patentability, namely: novelty, inventive step, and industrial utility. Although transgenic plants can be claimed using product-by-process claims, most applicants would prefer the stronger protection afforded by product claims to transgenic plants. The national patent laws of most European states also prohibit the patenting of plant varieties.
The problem of legal uncertainty concerning patent protection for biotechnological inventions in the EU was addressed by a directive aimed at strengthening and harmonizing patent protection for biotechnology. The Biotechnology Patent Directive was issued in July 1998, after a ten-year battle that included rejection of an earlier version in 1995.8 The Biotechnology Patent Directive has been praised for providing a "legal framework for recouping the huge R&D outlays that is almost as favourable for Europe's [biotechnology] firms as for those in the United States."9
The Biotechnology Patent Directive permits the patenting of transgenic plants. Although the Directive also classifies plant varieties as unpatentable subject matter, the term "plant variety" is defined in a narrow way that does not encompass most transgenic plants. The Member States of the Europen Union (EU) are required to implement the objectives of this Directive through national legislation by July, 2000. National implementation of the Directive will create a situation in which the national patent laws of EU Member States will permit the patenting of transgenic plants, while the EPO may continue to exclude transgenic plants from patent protection.
The near future holds the possibility that two different standards for patentability of transgenic plants will coexist in Europe: the EPO may continue to prohibit patenting of transgenic plants, while national patent laws of EU Member States may permit patenting as a result of implementing the Biotechnology Patent Directive. No predictions can be made at the present time, as the intellectual property regimes of Europe are in a state of flux. A recent proposal by the European Parliament and Commission has revived the possibility of creating a unitary Community patent for EU Member States, and draft legislation will be released soon. If Community patent legislation is adopted, it will provide a third avenue for EU Member States to obtain a patent. The Community patent would follow the standard of the Biotechnology Patent Directive and allow patenting of transgenic plants. The EPC is also currently being revised, with the EU applying pressure (via its Member States) to conform EPO policies on patenting transgenic plants with the EU policy set forth on the Biotechnology Patent Directive.
II. The European Patent Office Policy on Patenting Transgenic Plants
The European Patent Convention (EPC) excludes "plant and animal varieties" from patentability in Article 53(b).10 Historically, living matter had not been considered patentable under two distinct lines of thought: first, a legal view that biological material could not satisfy the criteria for patentability; and second, a strong ethical objection to granting a patent monopoly on any form of life. In addition, at the time the EPC was signed in 1973, most Contracting States to the EPC provided a type of non-patent intellectual property protection called "plant variety protection" either through pre-existing national laws, or laws implementing the International Convention for the Protection of New Varieties of Plants (UPOV Convention).11 Plant variety protection laws have traditionally been considered an acceptable way to reward the developer of a useful new variety with some property rights while also preserving public rights of access and use of the genetic material of the variety. Breeders of a new plant variety have the right to control the sale and distribution of propagating material (seeds or cuttings) of the variety they developed, while farmers are permitted to save and replant seeds of the variety and breeders are permitted to use the variety as a basis for further plant breeding.
With the rise of biotechnology, the EPO has had to consider whether inventions using plant or animal material are eligible for patent protection. Many biotechnological inventions can satisfy the criteria of novelty, inventive step, and industrial utility required for patentability under Article 52 of the EPC. Biotechnological inventions can dramatically alter a plant or animal through chemical treatments, physical treatments, or by modification of its genetic material through recombinant DNA technology. This situation gives rise to the challenging question of deciding whether the modified plant or animal can properly be claimed as part of an invention, or whether the modification has created a new variety of the type excluded under Article 53(b). Early decisions by the EPO Boards of Appeal indicated a willingness to allow claims to plant-based inventions that did not add new genetic material to the plants. With respect to transgenic plants, however, the current EPO policy is that the creation of a transgenic plant through genetic engineering creates a new plant variety.12 Thus, although an inventor may make claims to the genetic material transferred, the process of transferring that genetic material into a plant and "product-by-process" claims to plants produced by the claimed method, they may not make product claims to the transgenic plant itself.
A. Critical Decisions of the EPO Boards of Appeal
1. Decision T40/83, Ciba Geigy (1984)13
In 1983 the Technical Board of Appeal of the EPO stated that "[n]o general exclusion of inventions in the sphere of animate nature can be inferred from the EPC." This indicated that the EPO had no categorical objection to extending patent protection to biological material, as long as it satisfied the criteria for patentability and did not create new plant or animal varieties. In Ciba Geigy, the Board of Appeal considered claims to plant "propagating material" treated with a chemical to confer herbicide resistance. The examiner had rejected the disputed claims on the grounds that plants treated with the invention were "plant varieties" and thus, excluded under Article 53(b).
To review the examiner's finding, the EPO needed to define "plant variety" because the EPC does not define the term. In Ciba Geigy, the Board of Appeal adopted the definition of "plant variety" found in the UPOV Convention:
Plant varieties in this sense are all cultivated varieties, clones, lines, strains and hybrids which can be grown in such a way that they are clearly distinguishable from other varieties, sufficiently homogenous, and stable in their essential characteristics (Article 2(2) in conjunction with Article 6(1)(a), (c) and (d)) [of the UPOV Convention]. 14
The Board held that this definition applied to entire plants and to propagating material such as seeds. The Board of Appeal reversed the examiner's decision, stating that the claimed invention "does not lie within the sphere of plant breeding, which is concerned with the genetic modification of plants" and held that chemically treating seeds did not create new plant varieties.
2. Decision T320/87, Lubrizol (1990)15
The Lubrizol decision represents a case in which the EPO found that a novel combination of traditional plant breeding techniques resulted in plants and seeds that did not fall within the definition of plant variety.16 First, the Board of Appeal found that the arrangement of steps in the claimed process represented an essential modification of known biological processes, and the efficiency and high yield of the product showed important technological character. Thus, the claimed processes could not be considered "essentially biological" within the meaning of Article 53(b) EPC and were patentable. In the second part of the decision, the Board considered "product-by-process" claims to hybrid plants and seed in light of the UPOV definition of "plant variety." The characteristics of homogeneity and genetic stability were found to be prerequisites for a plant variety. The population of heterozygous hybrid plants produced by the claimed method would not breed true when propagated by traditional breeding methods. Thus, although the population of hybrid plants was homogeneous, these plants lacked the genetic stability to be classified as a "variety." The Board noted that these plants would not be eligible for plant variety protection under UPOV, so patent protection was the only form of intellectual property protection available. Because they did not fall with the "plant variety" exclusion of Article 53(b) EPC, the Board allowed product-by-process claims to these plants and seeds.
3. Decision T356/93, Plant Genetic Systems (1995)17
This decision represents the first time the EPO Board of Appeal considered the question of patentability of transgenic plants. Ciba Geigy and Lubrizol appeared to signal a willingness to grant claims on plants that are an integral part of practicing an invention, especially when they are not eligible for UPOV-style plant variety protection. The 1990 EPO Board of Appeal Harvard Oncomouse decision upholding a patent on a genetically engineered mouse supported the view that Article 53(b) does not generally preclude patent protection for living matter, and that patents could be granted for genetically engineered animal varieties produced by a microbiological process.18 Extrapolating from these earlier decisions, it was assumed that transgenic plants would also be granted patent protection under the EPC in the Plant Genetic Systems case.
In 1990, a European patent was granted to Plant Genetic Systems for processes and products relating to conferring resistance to the herbicide 'Basta' by genetic engineering. The patent contained claims to seeds, plants, and plant cells that are herbicide-resistant due to having a foreign nucleotide sequence incorporated into its genome, and methods for making and using the transgenic plant.19 The Greenpeace organization filed an opposition in the EPO in 1992. After the Opposition Division upheld the patent, Greenpeace appealed the decision to the Technical Board of Appeal.
Greenpeace contended that the claimed material constituted an unpatentable plant variety excluded by Article 53(b). Plant Genetic Systems argued that their patent covered plants generically and was not confined to a single variety; in fact, some plants made according to the invention "could not be recognized as a variety in any sensible way." In order to decide whether the claimed transgenic plant was excluded by Article 53(b), the Board of Appeal found that the term "plant variety":
Refers to any plant grouping within a single botanical taxon of the lowest-known rank which, irrespective of whether it would be eligible for protection under the UPOV Convention, is characterized by at least one single transmissible characteristic distinguishing it from other plant groupings and which is sufficiently homogeneous and stable in its relevant characteristics . . .20
Using this definition, the Board of Appeal found that the transgenic plant being claimed was a new plant variety and "a product claim which embraced within its subject-matter 'plant varieties' [as defined above] is not patentable under Article 53(b)." Cells from a transgenic plant were held not to fall within the definition of plant variety, and were patentable "microbiological products" under current EPO practice.
The definition of plant variety in the Plant Genetic Systems decision uncoupled the scope of Article 53(b) EPC with respect to "plant varieties" from the scope of plant variety protection afforded by the UPOV Convention. By expanding the scope of the definition of "plant variety" as used in Article 53(b) EPC, the Board of Appeal has almost removed the distinction between "plants" and "plant varieties" established in Ciba Geigy and Lubrizol. By removing the requirement that a claimed plant be eligible for plant variety protection under the UPOV Convention, Plant Genetic Systems indicated that the EPO no longer regards the first half-sentence of Article 53(b) as merely carving out the legal space occupied by the UPOV Convention.21 This decision may exclude some plant material from either type of intellectual property protection, for example, a transgenic plant that is found to be an unpatentable variety under Article 53(b) but does not have sufficient distinctiveness, stability or homogeneity to qualify for UPOV-style plant variety protection. This is precisely the situation that the Board in Lubrizol wanted to avoid. This decision also uncouples the Article 53(b) exclusion of "plant varieties" from the "morality" principle of Article 53(a).
4. Appeal of the Plant Genetics Systems decision to the Enlarged Board of Appeal22
Because of a perceived contradiction between the Plant Genetic Systems decision and prior EPO decisions interpreting Article 53(b) regarding plant and animal varieties, the President of the EPO requested clarification from the Enlarged Board of Appeal. The following question was presented:
Does a claim which related to plants or animals but wherein specific plant or animal varieties are not individually claimed contravene the prohibition on patenting in Article 53(b) EPC if it embraces plant or animal varieties?
The Enlarged Board ruled that the question was inadmissible, as there was no conflict among the decisions. The disputed claims in Ciba Geigy "conferred protection inter alia upon known plant varieties" by using a particular chemical treatment, but did not claim "propagating material in the genetically fixed form of the plant variety."23 The disputed claims in Plant Genetics Systems specifically recited a plant variety because "the claimed genetic modification itself makes the [transgenic] plants 'plant varieties' in the sense of the revised UPOV Convention, 1991, and for this reason [the disputed claim] defines unpatentable subject-matter within the meaning of Article 53(b) EPC."24 By reviewing and upholding Plant Genetic Systems, the EPO signaled a strong commitment to a policy of regarding stably transformed transgenic plants as "plant varieties" created by modification of their genetic material, and rejecting claims to such genetically modified plants.
5. Recent Novartis case before Technical Board of EPO
A recent appeal by Novartis was widely regarded as a test case to determine the patentability of transgenic plants under current EPO practice.25 The decision took into consideration both the EU Directive on the Legal Protection of Biotechnological Inventions, and the entry into force of UPOV 1991, which permitted "double protection" of plant varieties by patent and plant variety protection.26
In Novartis, the Board maintained the view enunciated in Plant Genetic Systems that stable insertion of a new gene into plant material inevitably produces a new plant variety. Thus, claims to genetically modified plants are not allowable before the EPO unless they are amended to specifically disclaim plant varieties. The Board made a distinction between "literal" and "substantive" approaches to claim content. Under the literal approach, a claim is for a plant variety only if it names one or more specific varieties. The substantive approach considers the full scope of a claim, on the principle that "a patent is granted for everything falling within the scope of the claim. If a claim to a plant also covers varieties, then a patent is being granted in respect of those varieties."27 The Board adopted the substantive approach to claims with respect to determining whether they fall under Article 53(b), because the literal approach does not allow a reviewer to examine the substance of the claim.28
The Board rejected the argument that genetically modified plants are patentable because they fall under the 'exception to the exclusion' of Article 53(b) EPC-i.e., although Article 53(b) excludes plant and animal varieties and essentially biological processes for their production, it makes an exception for "microbiological processes or the products thereof." Although the techniques of genetic engineering utilize many steps that could be considered "microbiological processes," the Board found that genetically modified plant or animal varieties are not purely the products of "microbiological processes." Instead, they are to be considered unpatentable varieties in the sense of the first half-sentence of Article 53(b) EPC. The Board defended its position against pleas that generic plant innovations should receive generic protection via patents by noting that protection is available for other categories of claims to the invention such as gene constructs and method claims. "If the need for product claims is real, it cannot override the express prohibition against patenting plant varieties. Judges are to apply the law, not create it."29
B. The Future of EPO policy: Questions Pending Before the Enlarged Board of Appeal Regarding the Patentability of Genetically Modified Plants
At the October 13, 1997 hearing for the Novartis appeal, the Technical Board decided to refer to the Enlarged Board of Appeal four questions relating to the patentability of genetically modified plants.30 These questions reflect the issues at the core of the controversy over whether transgenic plants are patentable inventions or unpatentable "plant varieties."
1. To what extent should the instances of the EPO examine an application in respect of whether the claims are allowable in view of the provision of Article 53(b) that patents shall not be granted in respect of plant varieties or essentially biological processes for the production of plants, which provision does not apply to microbiological processes or the products thereof, and how should a claim be interpreted for this purpose?
2. Does a claim which relates to plants but wherein specific plant varieties are not individually claimed ipso facto avoid the prohibition on patenting in Article 53(b) EPC even though it embraces plant varieties?
3. Should the provision of Article 64(2) EPC be taken into account when considering what claims are allowable?31
4. Does a plant variety, in which each individual plant of that variety contains at least one specific gene introduced into an ancestral plant by recombinant gene technology, fall outside the provision of Article 53(b) EPC that patents shall not be granted in respect of plant varieties or essentially biological processes for the production of plants, which provision does not apply to microbiological processes or the products thereof?
These questions, if admissible, will provide an opportunity for the EPO to authoritatively state its policy on claims to transgenic plants. The period for public comment on these questions lasted until the end of March 1999 and a decision may be handed down sometime during 1999.32
III. Recent Developments in the European Union
A. The Biotechnology Patent Directive
1. History of the Directive
Directive 98/44/EC on the Legal Protection of Biotechnological Inventions came into force on July 30, 1998,33 nearly ten years after the European Commission first proposed a draft directive to establish guidelines regarding biotechnology inventions. The goals of the original 1988 proposed Directive had been to stimulate the European biotechnology industry by providing legal certainty in obtaining patent protection for biotechnology inventions, and to prevent disparities between the national patent laws of the EC member states from hindering the commercial exchange of patented products.34 The 1988 proposed Directive singled out national patent laws "originating in certain international patent and plant variety conventions which have given rise to considerable uncertainty as to the possibility of protecting biotechnological inventions" as an impediment to investment in and development of the European biotechnology industry.35
The 1988 proposed Directive was sent to several working committees of the European Parliament (EP), where debates concerning the economic, social, ethical, and ecological issues involved in biotechnology patenting delayed its progress for two years. After the first reading in 1992, the EP drafted forty-six amendments to the Commission's proposal, many of which were incorporated in the 1993 Amended Proposal for a Council Directive on the Legal Protection of Biotechnological Inventions.36
The 1993 Amended Proposal removed ambiguity concerning the patentability of living matter in the EU by affirming that "[b]iological material, including plants and animals as well as parts of plants and animals, except plant and animal varieties, would be eligible for patent protection."37 The 1993 Amended Proposal also granted patent protection to "uses of plant or animal varieties or of processes for their production, other than essentially biological processes" and to "microbiological processes." A joint conciliation meeting between the Council of Ministers and the EP to resolve disputes over the patenting of human cells, genes and proteins finally took place in November 1994, but ended in deadlock when the EP would not change its view that there should be no patent protection for any parts of the human body.38
In March 1995, the European Parliament rejected the modified directive by a vote of 240 to 188, with 23 abstentions.39 This event represented the first time in the history of the EP that a compromise drawn up with the Council of Ministers in Conciliation Committee had been rejected. The Commission drafted a new proposal for a Biotechnology Patent Directive, which it adopted in December 1995 and presented to the EP Legal Affairs Committee in January 1996. The draft directive was further revised to incorporate significant changes regarding the patentability of human parts: the revised version prohibited patenting of human body parts, made a clear distinction between a patentable "invention" and an unpatentable "discovery," and addressed the issue of animal suffering.
This revised proposal was adopted by the Council of Ministers in November 1997 and approved by Parliament on the first reading. The EP formally approved the revised proposal on May 12,1998, by 432 votes to 78, with 24 abstentions (534 of the total of 626 EP Members participating).40 A majority of the Council of Ministers adopted the revised proposal for the directive on June 16, with the Netherlands voting against adoption and Italy and Belgium abstaining. The Biotechnology Patent Directive came into force upon publication in the Official Journal on July 30, 1998. Member states have until July 30, 2000 to implement its provisions.
2. Effect of the Directive on national patent laws on EU Member States
Article 1 makes it clear that this directive is intended to put EU policy on patenting biotechnological inventions into effect in each Member State, regardless of the currently existing current patent laws and policies: "Member States shall protect biotechnological inventions under national patent law. They shall, if necessary, adjust their national patent law to take account of the provisions of this Directive."
Chapter II on the scope of protection furthers the goal of removing barriers to patenting biological material and allowing patent monopoly rights to extend as far as possible. Protection conferred by a patent on a biological material shall extend to any biological material derived through propagation or multiplication of the original material. Process patents to produce patentable biological material shall also extend to cover any biological material derived from the original material. Patents on genetic information shall extend to all material in which the genetic material is contained. The Biotechnology Patent Directive also demands compulsory cross-licensing to allow a breeder to exploit a plant variety right that would otherwise infringe a patent, and allow a patent holder to exploit a patent that would otherwise infringe a plant variety right.
The Biotechnology Patent Directive is backed by the enforcement powers of the EU, which can coerce legislative action in Member States with the threat of sanctions. The power to coerce and enforce implementation of the objectives of the Biotechnology Patent Directive contrasts with the relative lack of power of the EPC, which did not replace or supercede national laws.
3. The Biotechnology Patent Directive and patenting transgenic plants
The Directive confirms that inventions comprising "biological material" are not per se unpatentable. Inventions having the required novelty, inventive step, and industrial applicability shall be patentable even if they comprise biological material or utilize a "process by means of which biological material is produced, processed or used."41 Naturally occurring biological material may be the subject of an invention when it has been "isolated from its natural environment or produced by means of a technical process."42 Inventions produced by means of a "microbiological process or other technical process" may be patentable.43 Even a full or partial gene sequence may be patentable if the industrial application of the sequence is disclosed in the application.44
Article 4(1) states that plant and animal varieties, and essentially biological processes for the production of plants or animals, are not patentable.45 Article 4(2) narrows that exclusion to avoid the result reached by the EPO in Plant Genetic Systems: "[i]nventions which concern plants or animals shall be patentable if the technical feasibility of the invention is not confined to a particular plant or animal variety."
The definition of "plant variety" for purposes of interpreting the Directive is incorporated by reference to Article 5 of Regulation (EC) No. 2100/94 on Community plant variety rights. The relevant paragraph of Article 5 states:
2. For the purpose of the Regulation, "variety" shall be taken to mean a plant grouping within a single botanical taxon of the lowest known rank, which grouping, irrespective of whether the conditions for the grant of a plant variety right are fully met, can be:
-defined by the expression of the characteristics that results from a given genotype or combination of genotypes,
-distinguished from any other plant grouping by the expression of at least one of the said characteristics, and
-considered as a unit with regard to its suitability for being propagated unchanged.46
Because this definition appears in an article of an EC Regulation, a piece of Community legislation which is automatically binding upon EU Member States, the definition of "plant variety" adopted in the Directive is already authoritative in the EU.
The intended scope of the definition of "plant variety" is addressed in recitals 30 and 31 in the Directive:
(30) Whereas the concept plant variety is defined by the legislation protecting new varieties, pursuant to which a variety is defined by its whole genome and therefore possesses individuality and is clearly distinguishable from other varieties; (Emphasis added)
(31) Whereas a plant grouping which is characterised by a particular gene (and not its whole genome) is not covered by the protection of new varieties and is therefore not excluded from patentability even if it comprises new varieties of plants[.]
The interpretation of "plant variety" found in Recital 30 relies on the statement in Article 5(2) of the Regulation on Community plant rights, namely that a plant variety means a grouping "defined by the expression of the characteristics that results from a given genotype." By equating "genotype" with "whole genome," Recital 30 lays the logical foundation for Recital 31, which states that modification of a single gene (i.e., creation of a transgenic plant) does not represent enough change to the entire genome to qualify as a new plant variety. The position articulated in Recital 31 and Article 4(2) of the Directive clearly conflicts with the most recent EPO caselaw on the definition of "plant variety" with respect to transgenic plants. In Plant Genetic Systems, the EPO Enlarged Board of Appeal held that inserting a single foreign gene "rendered the modified plant itself a new plant variety within the meaning of Article 53(b)"47 and recently upheld this view in Novartis.
In the Novartis decision, the EPO Board of Appeals briefly discussed the Biotechnology Patent Directive. According to the Board, the Directive advocates the "literal" approach to claims to transgenic plants. The Directive's literal approach means that when the invention is a genetic engineering technique which can be applied to more than one variety, the resulting products are patentable, even if they are plant varieties. The EPO Board would apply the "substantive" approach to claims to transgenic plants and reach the opposite result. However, the Board suggests that Article 4 of the Biotechnology Patent Directive could be interpreted to allow only "product by process" claims-i.e., claims to plant or animal varieties as products of the biotechnological process being claimed-which would be compatible with the "substantive" approach of current EPO practice.48
4. Netherlands' suit before the European Court of Justice opposing the Biotechnology Patent Directive
On October 19, 1998, the Kingdom of the Netherlands brought an action before the European Court of Justice (ECJ) seeking to have the Directive declared invalid due to procedural errors.49 The pleas in law asserted the following errors: incorrect legal basis under applicable EU law; infringement of the principle of subsidiarity; breach of the principle of legal certainty, breach of obligations under international law, breach of fundamental rights; and infringement of Article 100(a) of the EC Treaty. The gist of the complaint is that the Directive creates new substantive patent rights and therefore should have been issued as a regulation instead of as a directive. A directive can be passed by a qualified majority under Article 100(a) of the EC Treaty, which means the Council of Ministers was able to adopt the Biotechnology Patent Directive despite the opposition of the Netherlands. A regulation under Article 235 of the EC Treaty must have unanimous approval to be adopted. The case also asserted infringement of the EPC. Although this case will take years to resolve, Member States are still required to prepare to implement the objectives of the Directive by July 30, 2000.
B. Possible Future Directions for Patent Practice in Europe: A Community Patent System and Revision of the EPC
1. Renewed plans for a Community Patent System
The European Community first began working on a Common Market patent in the early 1960s, eventually leading to the Community Patent Convention (CPC) signed in Luxembourg in 1975.50 As envisioned, the CPC would create a single supranational community-wide patent, and a common court of appeal for litigating patent cases. The CPC never entered into force after being signed in 1975 and revised in 1985 and 1989, because it has not been ratified and acceded to by a sufficient number of EU Member States.
In 1997, a Commission Green Paper entitled The Community Patent and the Patent System in Europe: Promoting Innovation Through Patents criticized the current patent system in the European Union as inefficient, calling it a brake on the competitiveness of European companies.51 The Green Paper asked whether and to what extent interested parties would be prepared to make use of a Community patent system established as a directly binding Community regulation, instead of intergovernmental conventions such as the Luxembourg Convention on the Community Patent, which has never entered into force because certain national governments refused to ratify it.
In response to the 1997 Green Paper on the Community patent, the European Parliament passed a resolution proposing that the Community patent form the subject of a Community regulation having article 235 of the EC Treaty as its basis.52 The resolution states that "patent law in the European Union must be harmonised in order to consolidate the internal market" because "a consistent, effective Community law on patents is an essential element contributing to the competitiveness of EU companies." Harmonization of specific provisions in national patent laws through implementation of Community directives is regarded as insufficient to meet the need for unitary protection of patents within the EU. Thus, a Community regulation laying down rules that are binding both at the Community and national levels is considered the appropriate legislative means to achieve a uniform patent law.
The EP Resolution considers that the Community patent system should coexist with the systems now in place, noting that "the current combination of the EPC and national patent systems constitutes an efficient and flexible patent system in the European Economic Area." The resolution proposes that the EPO, in cooperation with national authorities, be the technical operator of the Community patent, in view of the already-existing expertise and infrastructure for patent examination in the EPO and various national patent offices. National courts will have jurisdiction in patent infringement or revocation actions, and the European Court of Justice should be the court for appeals on points on law.
On February 5, 1999, the Commission issued a follow-up communication to the 1997 Commission Green Paper on the Community patent, presenting a summary of actions and recommendations.53 This communication reiterated the view that "a unitary patent to cover the entire Community has become a political priority" and is an appropriate subject for Community action. The proposed Community patent must be unitary, affordable, must guarantee legal certainty, and must coexist with existing patent systems. As early as possible in 1999, the Commission will present a draft Regulation aimed at creating a Community patent.
2. Relevance of the proposed Community patent regulation to the question of patenting transgenic plants
The proposed regulation on the Community patent will have direct effects on the national laws of the Member States concerning patenting of transgenic plants, and will probably have indirect effects on the EPC and the EPO. The Community patent regulation will incorporate the standards of the Biotechnology Patent Directive regarding transgenic plants, and those standards will be imported into the national patent laws of Member States. Thus, an applicant seeking patent protection for a transgenic plant would be allowed to make product claims to the transgenic plant in a Community patent application. This creates a somewhat ironic situation if the EPO is the technical operator of the Community patent system: the EPO may have to allow claims to transgenic plants in a Community patent application that it would not allow in a European patent application for the same invention. The creation of a Community patent will provide a mechanism by which the EPO opposition to patenting transgenic plants can be avoided.
3. The EU view of current revisions of the EPC
The Commission communication of February 5, 1999 also encourages Member States to participate in the revision of the EPC currently underway, in order to adapt it to recent technological developments and to take account of Community legislation, namely, the Biotechnology Patent Directive. The Commission notes that, when the Community adopts provisions laying down common rules, the Member States no longer have the right to enter into obligations with third countries which affect those rules or alter their scope. This restriction may be invoked because Switzerland, Lichtenstein, and Monaco are Contracting States of the EPC but not Member States of the EU. The EU has also entered discussions to move from observer status to becoming a Contracting Party by accession to the EPC. The EU's influence on the revision of the EPC, whether exercised directly or through Member States, may be powerful enough to alter the current EPO policy of denying patent protection for transgenic plants on the grounds that they are unpatentable plant varieties.
IV. Conclusion and Prospects
The issue of patent protection for transgenic plants is being simultaneously addressed by the EPO and the EU, leading to a confusing mix of possible outcomes. Transgenic plants are currently unpatentable "plant varieties" before the EPO. Contracting States to the EPC have pledged, and are directly obligated, to harmonize national patent practice with EPO practice. Thus, most Contracting States currently treat transgenic plants as unpatentable. However, the EPO is currently undergoing revision and will soon answer specific questions concerning its policy on patenting transgenic plants. The revisions and answers to the questions may confirm the present EPO policy, or may abruptly shift toward allowing product claims for transgenic plants.
The EU is in favor of granting patent protection to transgenic plants, with the idea that strong intellectual property protection for transgenic crops will help stimulate the development of the European biotechnology industry. In mid-1998, the EU issued the Biotechnology Patent Directive, which advocates granting patent protection to transgenic plants as long as the invention is not confined to a single variety. Member States of the EU must implement the objectives of the Directive through national legislation within two years. Contemporaneous with implementation of the Directive by Member States, the European Court of Justice will be considering the validity of the Directive. In late 1998, the European Parliament proposed a Community regulation creating a unitary Community patent. The Commission has promised draft legislation on the Community patent as early as possible in 1999. The Community patent will incorporate the standards of the Directive regarding patenting transgenic plants. However, it is hard to predict whether the Directive will survive an attack on its validity and whether the Community patent regulation will be passed.
There are many possible scenarios for the future situation regarding patenting transgenic plants in Europe. The EPO policy may continue to dominate, especially if the Directive is found invalid. If the Directive is upheld and is implemented by EU Member States, then applicants seeking patent protection for transgenic plants will have to apply to individual national patent offices of EU Member States to benefit from the relaxed standards of the Directive. If, however, the EPC is revised in accordance with the Directive, the EPO policy may change and applicants may seek patent protection for transgenic plants under the EPC. Finally, if the Community patent regulation passes, an applicant could seek patent protection for transgenic plants through a Community patent. In all of these scenarios, the national patent offices and national courts responsible for enforcement of patents in EU Member States will face the dilemma of choosing between their commitment to harmonize practice and case law with the EPO and their obligations to uphold Community legislation.
The landscape for patenting transgenic plants in Europe is rapidly changing. Possible new configurations can be proposed, but it is impossible to predict which changes will occur and when. Powerful forces lobbying for patent protection for transgenic plants on the scale of that found in the US and Japan will probably succeed in the EU. Ironically, if the Biotechnology Patent Directive takes effect before the Community patent, patent practice in Europe will become highly splintered before it becomes unitary. Patent applicants do, indeed, "live in interesting times."
__________________________________________________________1. See Dan Egbert, Wealth in the Weeds: Plant Genomics Start-ups Vow to Trigger the Next Biotech Revolution, TechCapital, Feb. 23, 1999.
2. See Rick Weiss, Seeds of Discord; Monsanto's Gene Police Raise Alarm on Farmers' Rights, Rural Tradition, The Wash. Post, Feb. 3, 1999, at A1.
3. See Ned A. Israelsen & Dale C. Hunt, Increasing Value of Agbiotech IP Sparks Turf Wars, The Nat'l. L. J., June 22, 1998, at C6. [hereinafter, Israelsen and Hunt, Increasing Value of Agbiotech IP].
4. See id. To this end, corporations in the United States are engaging in patent litigation resulting in damage awards in the hundreds of millions of dollars. In 1998, a jury awarded $174.9 million in compensatory damages to Mycogen Plant Sciences Inc. in a patent licensing dispute with industry giant Monsanto.
5. See Biotechnology in Europe, The Economist, July 19, 1997, at 56.
6. Greens v. Genes, The Economist, July 19, 1997, at 18. Restrictive European Union regulations and opposition by the "green lobby" are also blamed for stifling development of the biotechnology in Europe. See, Roland Gribben, European Rules 'Stifle Biotech', The Daily Telegraph, Jan. 20, 1997, at 23.
7. The EPO administers the European Patent Convention (EPC). All Member States of the European Union are also Contracting Parties to the EPC. Switzerland, Lichtenstein, and Monaco are Contracting Parties to the EPC that are not EU members.
8. Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions. 1998 OJ L 213, at 0013-0021 [hereinafter Biotechnology Patent Directive].
9. Biotechnology in Europe, The Economist, July 19, 1997, at 56. "R&D" refers to research and development costs. This Article was written after the proposed Directive was read in the European Parliament on July 16, 1997. The final Directive was approved on July 6, 1998 and was published in the Official Journal (OJ) on July 30, 1998. Judge & Frankel, supra note 8.
10. European Patent Convention, Article 53: Exceptions to patentability
European patents shall not be granted in respect of:
(a) inventions the publication or exploitation of which would be contrary to "ordre public" or morality, provided that the exploitation shall not be deemed so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
(b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision does not apply to microbiological processes or the products thereof.
11. International Convention for the Protection of New Varieties of Plants, Dec. 2, 1961, 33 U.S.T. 2703, 89 T.I.A.S. 100199. Electronic versions of the 1961, 1978, and 1991 UPOV Conventions can be found at: <http://www.upov. int/eng/convntns/htm>.
12. Decision T1054/96 Technical Board of Appeal, NOVARTIS/Plant Varieties (July 6, 1998).
13. Decision T49/83 Technical Board of Appeal 3.3.1, CIBA GEIGY/Propagating Material (July 26, 1983), O.J. EPO 1984.
14. Id. at par. 2.
15. Decision T320/87 Technical Board of Appeal 3.3.2, Hybrid Plants/LUBRIZOL (Nov. 10, 1988), O.J. EPO 1990, 71 [hereinafter Decision T320/87].
16. The claimed process involved multiple steps to identify and propagate parent plants which, when crossed, produced desirable hybrid offspring. A key feature of the claimed process was that at least one parent was heterozygous, and the heterozygous parents were multiplied by cloning to produce enough exact copies of the parent plant to produce the desired hybrid offspring on a massive scale.
17. Decision T356/93, Technical Board of Appeal 3.3.4, Plant Cells/Plant Genetic Systems (Feb. 21, 1995), O.J. EPO 1995, 545. [hereinafter, Decision T356/93].
18. Decision T19/90, Oncomouse/HARVARD, O.J. EPO 1991, 476. After this decision, the Board of Appeal remitted the case to the Examination Division, which found the claims patentable because "non-human mammals" and "rodents" have a higher taxonomic rank than "animal varieties." Id. at 589.
19. Decision T356/93, section I, at 546-48.
20. Decision T356/93, par. 23, at 571.
21. Double protection-granting both patent and plant variety protection-was prohibited under the 1961 and 1978 versions of UPOV. The 1991 version no longer prohibits double protection. Countries who have amended their national plant variety legislation to conform with UPOV 1991 no longer have this prohibition. See supra note 11.
22. Decision G3/95, Op. of the Enlarged Board of Appeal (Nov. 27, 1995), O.J. 1996, at 169 [hereinafter, Decision G3/95].
23. Id., par. 2, at 176.
24. Id., par. 4(1), at 177.
25. Tim Roberts, EPO/Patents/Patentability of GeneticallyMmodified Plants: NOVARTIS AG/PlantVvarieties, 20 EIPR 1998, News Section: National Reports at N-193 (discussing unpublished Decision T1054/96, Technical Board of Appeal, July 6, 1998, Plant varieties/NOVARTIS) [hereinafter, Roberts, Novartis]. Because this opinion is not published, Robert's discussion will be relied upon to discuss Decision T1054/96.
26. The Directive entered into force on July 30, 1998, upon publication in the Official Journal (O.J.). The UPOV 1991 convention entered into force when a fifth Contracting State deposited its instrument of ratification on April 24, 1998.
27. Decision T1054/96, par. 16, quoted in Roberts, Novartis, supra note 25, at N-193.
28.Id., pars. 15 & 20, cited in Roberts, Novartis, supra note 25,at N-193.
29. Id., quoted in Roberts, Novartis, supra note 25, at N-194.
30. See Enlarged Board of Appeal: Referrals by Boards of Appeal, O.J. EPO 1997, 551. These questions are also published in Roberts, supra note 25, 20 EIPR1998, at N-193.
31. Article 64 EPC, Rights conferred by a European patent, (2) "If the subject-matter of a European patent is a process, the protection conferred by the patent shall extend to products directly obtained by such process."
32. See Enlarged Board of Appeal: Communication from the Enlarged Board of Appeal Concerning Case G 1/98, O.J. EPO 1998, 509.
33. Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of Biotechnological Inventions, 1998 O.J. L 213, at 0013-21 [hereinafter Biotechnology Patent Directive].
34. Commission Proposal for a Council Directive on the Legal Protection of Biotechnological Inventions, 1989 O.J. C 10, at 3. (proposed Oct. 1988, published Jan. 13, 1989).
35. Id. at 4.
36. Amended Proposal for a Council Directive on the Legal Protection of Biotechnological Inventions, 1993 O.J. C 44, at 36.
37. Id., Art. 3.
38. See Biotechnology Conciliation Committee Postponed, Reuters (Oct. 18, 1994); see also Conciliation Committee Fails to Agree on Protecting Innovations, Eur. Info. Serv. (Nov. 25, 1994).
39. Decision on the Joint Text Approved by the Conciliation Committee for a European Parliament and Council Directive on the Legal Protection of Biotechnological Inventions, (C4-0042/95-94/0158(COD)), O.J. C 68, at 26.
40. Biotechnology: MEPS Give Formal Approval for Patenting Inventions, European Report, European Info. Serv. (May 16, 1998). The approval was conducted using the co-decision procedure in plenary session.
41. Commission Proposal for a Council Directive on the Legal Protection of Biotechnological Inventions, 1989 O.J. C 10, Art. 3.1 (proposed Oct. 1988, published Jan. 13, 1989).
42. Id., Art. 3.2; see also Art. 5.2 (concerning human material).
43. Id., Art. 4.3.
44. Id., Art. 5.3.
45. Other unpatentable subject matter includes the human body "at the various stages of its formation and development,"and the simple discovery of one of its elements (Art 5.1); inventions whose commercial exploitation would be "contrary to ordre public [sic] or morality" (Art 6.1); and processes for cloning humans, modifying the germ lines of human beings, use of human embryos for industrial or commercial purposes, and genetic modifications of animals which are "likely to cause them suffering without any substantial benefit to man or animal." (Art 6.2).
46. Regulation (EC) No. 2100/94 on Community Plant Variety Rights, 1994 O.J. L 227 (Sept. 1, 1994).
47. Decision of the Enlarged Board of Appeal, G3/95, Plant Genetic Systems (Nov. 27, 1995), O. J. EPO 1996, at 177.
48. Decision T1054/96, par. 96, cited in Roberts, Novartis, supra note 25, at N-194.
49. Action brought on Oct. 19, 1998 by Kingdom of the Netherlands against the European Parliament and Council of the European Union, Case C-377/98, O.J. C 378, Dec. 5, 1998, at 0013-14.
50. See Gerald A. Paterson, The European Patent Systems, §§ 1-44 to 1-46 (1992).
51. Green Paper on the Community Patent and the Patent System in Europe: Promoting Innovation Through Patents, June, 1997 available at <http://europa.eu.int/comm/dg15/en/intprop/indprop/558.htm>.
52. Resolution of the European Parliament, dated Nov. 19, 1998, on the Commission Green Paper on the Community Patent and the Patent System in Europe: Promoting Innovation Through Patents, O.J. EPO 4/1999, at 193 available at <http://www.europarl.eu.int/plenary/en/default.htm>.
53. Communication from the Commission dated Feb. 5, 1999 to the Council, the European Parliament and the Economic and Social Committee (COM (1999) 42), O.J. EPO 4/1999, at 197.