Open Intellectual Property Models for Plant Innovations in the Context of New Breeding Technologies
2. Plant Related Innovations: Towards Complex Traits
- Resistance against established insect resistance (IR) and herbicide tolerance (HT) traits are developing rapidly, especially for GM traits. This needs to be mitigated by stacks providing double or even triple mode-of-actions. For GM events the trend towards stacking is quite advanced [10,11]. The US Department of Agriculture estimated that 89% of cotton acres and 80% of corn acres were planted with stacked seeds in 2019 . In maize it is meanwhile common to stack six events with up to ten traits. For example the stack commercialized under the brand “SmartStax™ Pro x Enlist™” comprises the events MON87427, MON89034, TC1507, MON87411, 59122, and DAS40278. It offers resistance against three herbicides (glyphosate, 2,4-D, and glufosinate), three different mode-of-action traits against lepidopteran pests (above the ground), and four different mode-of-action traits against coleopteran pests (below the ground) .
- Another driver is the increasing regulatory, environmental, and public scrutiny against chemical pesticides. The natural resistance genes of plants could be attractive alternatives, if the currently cumbersome process of introgression could be facilitated. The trend towards stacks of patented traits (both native traits and mutants) can be seen in the PINTO database of the European Seed Association (ESA) : While the number of total varieties has not changed substantially over years, the number of stacks i.e., varieties which are comprising two or more traits and are in consequence covered by two and more patents increased substantially . The trend towards higher stacks of patented traits is paralleled by a trend of higher stacks of patents which cover the specific varieties: While a 2019 analysis showed only 3 out of about 700 varieties with stacked, proprietary traits, by the end of 2021 this number was already at 108 out of 881 varieties in total (see Table 1). In several crops the percentage of stacks of patent traits has reached double-digits. Sunflower is leading due to a high use of herbicide tolerance. But also the use of stacks for disease resistance in lettuce and Brassica is rapidly increasing. Here also stacks of traits covered by patent owned by different parties are utilized.
3. Plant-Related Patents: Towards a Gordian Knot?
- A plant variety may comprise a stack of multiple patented traits, some owned by the holder of the varieties, others in-licensed usually without a right to sublicense. To breed with such variety and to commercialize the resulting new variety will require highly complex license negotiations with all owners of such trait patents.
- The traits in a plant variety may have been established by using several method patents. As in some countries the scope of the patents covers the trait, to breed with such variety and to commercialize the resulting new variety will require highly complex license negotiations with all owners of such method patents.
3.1. The Patent Landscape for CRISPR-CAS Technologies
3.2. The Patent Landscape for NBT-Derived Products
3.3. The Impact of Shorter Innovation Cycles on Complexity and Freedom to Operate
3.4. Scenarios for the Future
- Scenario 1 “Democratization”: Breeding by editing becomes a standard and is used on many crops in many countries. In 10 years >50% of all varieties comprise at least one genome-edited characteristic. In 20 years essentially all commercial varieties will comprise characteristics obtained by genome editing, many will comprise 5 or more of such characteristics.
- Scenario 2 “The world as we know it”: Genome editing remains complex and regulated and in consequence limited to a few major crops (i.e., corn, soy) and “controlled by a few multinational companies.
4. Managing Patent Thickets
“while patent thickets have achieved prominence on the agenda of both policy-makers and academic researchers, one can still legitimately wonder about the true extent of the problem. Two questions arise when assessing the importance of patent thickets. The first one is how often such thickets actually arise. The second is what the size of the inefficiency associated with patent thickets is likely to be.”
- “Patent pools”  deal with complex innovations by creating a “one stop shop” which enables collective licensing for a reasonable price [123,124]. They “clear” patent thickets with pro-competitive effects . Patent pools of a larger size: (i) have in general a simple royalty sharing mechanism based on quantity (i.e., number of patents) rather than quality i.e., value of the innovation  (ii) do not allow to license only a sub-selection of the technologies (ii) consist of a rather small and homogenous group of patentees. Patent pools are not always seen positively, especially when it comes to their effect on stifling innovation as they may reduce the incentive innovate . Patent pools also require careful anti-trust consideration and usually regulatory clearance . For plant innovations, no holistic patent pool has been developed yet, although there have been attempts to establish a patent pool for CRISPR-Cas9 [99,100]. The joint initiative of Corteva and The Broad Institute (see under Section 4.1) intents to create a mini-pool although some usually required elements might be missing and others potentially not compatible with the antitrust scrutiny on patent pools .
- “Patent clearing houses” facilitate access to collections of patented technologies. They usually work with standard agreements and terms and have no mechanism to deal with stacking. Clearing houses are therefore less an approach to manage patent tickets than to pragmatically establish FRAND terms . The international Licensing Platform—Vegetables (ILP) (see under Section 4.2.2) is an example for a successful clearing house.
- “Open Source Models”  have been primarily developed for software related innovations where copyright is established automatically without the need for any registration. There have been attempts to establish open source models for plant related innovations by obligations not to patent (see under Section 4.4).
4.1. Patent Pools
4.2. Patent Clearinghouses
4.2.1. The BiOS Initiative
- To license to all BiOS licensees any patent on a non-severable improvements to the BiOS technologies.
- Not to assert against other BiOS licensees any patents which dominates the BiOS technologies.
- Share with the public all information about the biosafety of the BiOS technologies.
- BiOS had an “interesting” core of technology but the related patent applications were rather weak to establish an incentive to take a license . In consequence, the value proposition was limited to save some time and efforts by accessing the materials. In view of the relatively high subscription fee, the requirement to make own IP available, and the fact the most commercial players had already a license to the Agrobacterium technology, the costs and benefits were not in proportion.
- BiOS was not able to grow into a “one-stop-shop” by attracting additional technology patents. The BiOS license did not compel BiOS licensees to make own enabling technology patents—other than non-severable improvements to the core BiOS patents—available to the commons. Whether such a requirement would have been accepted or rather scarred away licensees can be debated. Most likely the core patents of the BiOS platform were not sufficiently attractive to support such “pull-in”.
- Aggressive third parties filed selection inventions which blocked a meaningful use of the BiOS patent estate and/or created a penumbra of legal uncertainty which deterred parties to take a license . In contrast to Cambia the third party was able to obtain granted patents. The impact was significant as because it was the only differentiation technology in the BiOS portfolio.
- Learning 1: Any licensing platform needs a sufficiently attractive core of technologies protected by valid and sufficiently broad patents to attract licensees and additional technologies.
- Learning 2: A licensing platform needs to include a mandatory “give ’n take” provisions. Parties who want to take licenses have to make similar technologies available to other platform members. Such “pull-in” needs to be support by a sufficiently attractive core.
- Learning 3: Selection inventions can always occur. A constraining effect on the FTO of a clearing house can never be completely mitigated. However, the likelihood of such effect can be reduced by attracting the majority of the related industry sector to the platform. Platform members are discouraged to file blocking patents as the blocking effect is lost by the mandatory “pull-in” effect. A singular non-member player could theoretically block individual assets of the platform but would face opposition by the strong platform community.
4.2.2. International Licensing Platform—Vegetables (ILP)
- Defined scope: The ILP provides access to two classes of patents relevant for vegetable breeders “traits patents”  and “variety patents”. It enables the use of legally available vegetable material covered by a patent for further breeding. The ILP does not enable use of proprietary technologies nor does it mandates material transfer . The ILP is limited to traits which are not regulated as GMOs . When it comes to NBTs and the current “patch-work” of regulatory classification, the ILP enables licenses to NBT-derived traits in and for countries where those traits are not considered GMOs. Such limitation is necessary as GMO liability requires a qualification from licensees which would undermine the ILP principle that access is available for everybody.
- “All-in” and “pull-in”: The ILP became the “one-stop-shop” for vegetable trait patents by creating an “all in” obligation: If a party wants to take a license through the ILP it has to become a member and will be obligated to make all its own vegetable-related patents available to other ILP members. This “conditional openness” enable a strong pull-in effect: The ILP enables access to more than 260 trait patent families and numerous variety patents . This represents more than 60% of the relevant patent families in this field.
- Contractual Breeders Exemption: ILP members grant each other a mutual, royalty-free non-assert under US variety patents to use a legally available variety for the breeding and commercialization of new varieties. Two conditions apply: The new variety has to be sufficiently distinct from the protected variety, and a notification needs to be send to the patentee.
- Trait Licenses under FRAND Terms: ILP licensees have to pay a royalty for the commercialization of a variety if and where it is still covered by the patent. The ILP members agree to enter into bilateral negotiations for a license. Only if these fail after three months, the ILP’s baseball arbitration mechanism kicks in as a “safety net [165,166,167]. The baseball arbitration is based on a standard license agreement (“SLA”) where only the percentage royalty on net sales is subject to arbitration. No other element is negotiable . The parties have to submit a binding, written proposal for a fair royalty with supporting evidence and reasoning. If the dispute is not resolves, the Expert Committee will render a binding decision. However, they can only pick the one submission they believe is “more fair”. No detailed reasoning needs to be provided. Based on the “game theory”  this creates a strong incentive for the parties to be reasonable, which eliminates inflated claims . The established royalty is final and binding . Changes are only possible if the value of the trait changes substantially . The resulting valuation is likely as close to the true value of the technology as possible, or as noted by Lemley and Shapiro: “The Nash equilibrium of the game should be for each party to generate a proposed salary equal to the true value of the player” and “so long as the arbitration procedure itself is unbiased, bargaining in the shadow of binding arbitration will tend to lead to reasonable rates .” The same should apply in a licensing situation with respect to the submission of a royalty proposal which should equal the true value of the patented trait. Judge Arnold referenced baseball arbitration as one easy solution to establish FRAND terms as “the procedure forces both parties to pitch their offers close to what is objectively FRAND” [174,175,176,177].
- Most Favoured Nation clause: The ILP provides for a Most Favoured Nation (“MFN”) clause which requires to grant licenses under the best financial terms granted to any other Member under the SLA. Once an MFN percentage is set any licensee may request to an SLA with the same percentage.
- The Expert Committee: The independence of the Expert Committee is key for the success of the ILP . The seven experts collectively bring expertise in IP, economics, the vegetable seed market, plant science, and accounting. They are proposed of the ILP Board and need to be confirmed by a majority of at least 2/3 of the ILP Members .
- Other elements: Every interested party can join the ILP even if it does not own patents. ILP members can continue to in- or out-license patents to third parties outside the ILP. They can freely choose which ILP patents they want to in-license. No “bundling” occurs. In addition, there are several elements safeguard the pro-competitive effect of the ILP, e.g., members can always challenge the validity of a patent.
4.3. E-Licensing and Licensing Pledges
4.4. Open Source Models
4.5. Discussion of Current Solutions
4.5.1. A Word on Anti-Trust
4.5.2. Current Solutions: Fit for Future?
5. Moving Forward
5.1. Evolving the ILP
- The ILP is limited to vegetables and there are no parallel solutions for field crops or the ornamental and horticultural sector. The solution to expand the current ILP to all crops is not advisable when assessed in details .Solution: Set-up parallel ILPs for field crops and ornamentals/horticulture based on the existing ILP model with separate expert committees .
- The ILP has no mechanism to deal with stacked traits. The current baseball arbitration is intrinsically limited to a two-party dispute and must fail for multi-party situations. The questions (i) how to avoid that royalty stacking becomes punitive and (ii) how to allocate a royalty to different patentees is currently not answered.Solution: Royalty stacking could rapidly reduce the earnings of a breeder to zero. However, a general “cap” to total royalties (e.g., 30–50% of net income) would create an unhealthy incentive for stacking as any additional trait would not cost more. In consequence, the first “step” in the solution needs to be a benchmarking with the industry practice and/or a clear technical need (e.g., resistance management). The burden of proof needs to be with the party who applies for a cap. The second “step” is setting the total royalty for a solution. Here, a variation of the standard baseball arbitration named “night baseball” arbitration  can be helpful: The set-up is the same, and the pitches are the same. The difference is that the arbitrator renders his or her call before the parties show their numbers. The party with the proposal closest to that of the arbitrator prevails. While this system increases the workload for the arbitrator, it enables pitches by multiple parties. The third “step” is the allocation of the total royalty to the different patentees. In cases where an individual royalty has already been established for each technology this should be straight forward: Each royalty is reduced by multiplication with the quotient of the capped royalty by the aggregated royalty. For example, if a license package includes seven technologies which each has been licensed for a 10% royalty on net sales (i.e., an aggregated royalty of 70%) and the royalty cap has been set at 35% on net sales then each individual royalty is reduced to 5%. If an individual technology has not yet been valuated, then such technology first needs to be valued in separate “normal” baseball arbitration.Challenges: A lower %-royalty does not necessary mean a lower income for the innovator if the added value of the trait combination can be full realized. However, if the royalty-rate is a percent of net sales licensees may choose to rather gain market share with cheaper prices than maximising value. This would erode the trait value and potentially negatively impact the incentive to innovate. Such erosion could be avoided by employing an added-value based trait fee i.e., a defined value for the trait package and each of its components. However, as trait value could become a substantial part of the total product value and sales price this could be problematic from a competition law perspective as it could have a “price fixing” effect.Even if the risk of value erosion is accepted for simplicity, other dynamic elements of a stack solution need to be considered: Patents are not equally filed and granted in all countries. They expire at different times and can be refused. So a highly dynamic, country-by-country royalty setting and allocation scenario is likely, which would require sophisticated IT-solutions to manage .
- The ILP has no mechanism how to deal with reach-through royalties for method claims as they may related to most NBT-derived traits. Two scenarios are foreseeable: (i) The products are covered by a valid claim as it could be in the US, Canada, Australia, and some other countries which extent methods claims broadly to resulting products, or (ii) the products are merely “enabled products” outside the scope of the patent but the licensee is contractually obliged to pay reach-through royalties.Scenario 1 “Covered by a Valid Claim”: Here, no solution is foreseeable within or through the ILP. While ILP members have no duty to ensure full freedom-to-operate under third party patents, they need to use reasonable efforts to inform other members if a certain material is made by NBTs and whether its FTO might be constrained in some countries. It would be the duty of the licensee to obtain additional licenses from the NBT-patentee directly or—if contractually permitted—through a sublicense from the other ILP member. The terms and conditions of such license would not be governed by the ILP but considered a bilateral agreement.Scenario 2 “Enabled Products”: If the product is outside the scope of the patent a reach-through royalty obligation can unlikely bind another ILP member. The ILP does not enable licenses to any specific product of a member but it grants a license under a certain patent to use legally available material covered by said patent for further breeding. The material could be material of the licensor, but also material made by the licensee or by third parties. In consequence, the ILP is de facto rather a passive non-assert under a patent right than an active license to a certain product of the licensor. This should effectively deny any contractual reach-through beyond the direct contract partner . If an ILP Member would consider raising such contractual argument to deny a license or to ask for addition royalties, such act would be considered a breach of the ILP obligations if the NBT license was entered after the member becoming an ILP member then.
- Users and Patentees: The list of parties establishing and using plant related inventions is complex. It has horizontal and vertical dimensions . There are universities, breeders, biotechnology companies, crop protection companies, grain traders, food producers and retailers, growers etc. Users will have all different sizes and both an international or local footprint. Most importantly not all users are innovators and patent owners, not all innovators and patent owners are users. Already today, several ILP members are small breeding companies with no own patent estate. Further, not every patent owner is also a patent user (i.e., a practicing entity). Especially academic institutes, who own a substantial part of today’s NBT-related patent assets, are on the best way to become “patent trolls” in exploiting patent positions far beyond the patent’s actual scope hardball tactics. Even major EU universities, which hold several patents on plant traits and NBTs, have not yet joint the ILP. From a public policy perspective this is a paradox, but maybe not surprising as universities as non-commercial entities would unlikely enjoy benefits from obtaining licenses under the ILP but rather limited their flexibility to leverage their IP.
- Crops: The landscape includes food, feed, industrial and ornamental crops, commercial and as well as subsistence crops. The value chain and value capture differ substantially for each of those.
- Countries and cultures: Plant breeding is a global activity, whereas seed sale and use are very local activities. As discussed briefly above, today’s IPR systems for plant related innovations differ substantially from country-to-country with a strong cultural element which spans from an aversion against patents on seeds—like in India—over a reluctance for “patents on nature”—like in the EU—to a rather agnostic view like in the USA. However, breeders need to be able to move and use their plant genetics usually in a global context.
- Lack of standards and essential facilities: While the smart phone industry has the “benefit” of a strong encouragement resulting from the telecommunication standards which forces all owners of standard essential patents to enable access, such effect is lacking and also not foreseeable in the seed sector. Cases which attempt to expand the essential facility doctrine beyond standards will likely remain rare and narrowly defined exceptions. While likely everybody would agree that seed and breeding are “essential” for food security and wellbeing, it would require a fundamental legislative change to define the seed of each and every variety and all related patents as an “essential facility”.
- Self-propagating nature of seed products: Seed is a high-tech product in an exceptionally easy-to-copy form . This enables significantly more potential “producers” than in any other technology area. It also requires mechanism of royalty capture and IP enforcements which consider the divers user landscape and country-by-country differences.
5.2. Legislative Adjustments
- Abandon patents for plant related inventions.
- Merge patents and PBRs into a new holistic system for open innovation.
- Further smooth the interface between patents and PBR.
5.2.1. Option 1: Abandoning Patents
5.2.2. Option 2: Redesign IP system
5.2.3. Option 3: Smooth the Interface between Patents and PBR
Expand Legal Certainty and Freedom-to-Breed
Data Availability Statement
Conflicts of Interest
References and Notes
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- For example, in lettuce virtually every variety comprises already at least 20 resistance genes against Bremia and breeders need to look for new ones every time. A similar example is spinach.
- See Articles 81 and 83 European Patent Convention. A clear description can–for example—be provided by a combination of deposit, sequence information, and molecular markers.
- With a few exception for widely licensed traits, the costs for enabling, filing, prosecuting, and defensing patents on native traits are likely higher than the licensing revenue these patents create. In consequence, the value is merely a hard to measure value of „deterrence“
- Such bargaining chips may be required in negotiations with other trait owners to manage access to their genetics and trait. Without patents no bargaining chips would be required.
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- In conventional breeding the transfer of a desired traits is associated with a large, often undesired genetic deviation from the initial variety which often comes with “penalties” like yield drag. Especially for multi-allelic complex characteristics breeders have to screen thousands of off-spring with more than 95% being “waste”. NBTs can specially establish the desired causative allelic variations and could crack complex breeding problems, where conventional breeding fails
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- Applicants could—For example—Add the feature of “optionally further propagating said plant” to a method claim to avoid that final plants fall outside the literal scope of the claim (see. EN.48).
- In the US process claims likely extent in general to down-stream products under 35 USC 271(g). Other countries (e.g., Australia and Canada) may also extent process claims to downstream products under the so-called “Saccharine Doctrine”
- Available online: https://www.ipstudies.ch/2020/10/2020-crispr-patent-landscape-where-do-we-stand/ (accessed on 5 January 2021).
- Search in “The Lens” (available at lens.org, accessed 5 January 2021) with the following search profile: claims:(CPF1* OR CPF-1* OR CMS-1* OR CMS1* OR CAS1* OR CAS2* OR CAS3* OR CAS4* OR CAS5* OR CAS6* OR CAS7* OR CAS8* OR CAS9* CAS12* OR CAS-1* OR CAS-2* OR CAS-3* OR CAS-4* OR CAS-5* OR CAS-6* OR CAS-7* OR CAS-8* OR CAS-9* OR CAS-12* OR CAS-phi OR CRISPR*) AND claims:(PLANT* OR SEED* OR CROP* OR FRUIT* OR MAIZE OR CORN* OR SOYA OR SOYBEAN* OR WHEAT OR RICE OR TOMATO* OR VEGETA* OR CEREAL* OR FLOWER* OR ROOT* OR NITROGEN OR STATURE OR “WATER USE” OR DROUGHT OR BIOMASS OR YIELD OR ABIOTIC*)AND classification_ipcr:(A01H* OR C12N*)
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- Interference 106126 (BROAD-Toolgen). Available online: https://acts.uspto.gov/ifiling/PublicView.jsp?identifier=106126 (accessed on 9 June 2021).
- No. 106127 (UCB-Toolgen). Available online: https://acts.uspto.gov/ifiling/PublicView.jsp?identifier=106127 (accessed on 9 June 2021).
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- In a strawman opposition the party in interest remains undisclosed as the opposition is filed in the name of patent attorney of law firm or a company specifically set-up for such kind of oppositions (e.g., „Strawman Ltd.“).
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- It can be expected that the costs for UC Berkeley are similar to those of The Broad Inst., followed by somewhat lower costs for Toolgen, Sigma et al.
- MPEGLA suggested a CRISP patent pool in 2019. The initiative has not yet gotten any visible traction. Available online: https://www.mpegla.com/crispr/initiative/. See also related article https://www.mpegla.com/wp-content/uploads/IAM-article-July-5-2019.pdf (accessed on 16 January 2021).
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- According to Broad Inst. “the best thing, for the entire field, is for the parties to reach a resolution. This is why, for seven years, we have made many attempts to engage University of California-Berkeley, directly and through their exclusive licensee and through patent pools. These efforts began before UCB licensed its IP exclusively and entirely to commercial entities, and we will continue to pursue a path towards resolution.” Broad Communications, Updated 27 September 2020.Available online: https://www.broadinstitute.org/crispr/journalists-statement-and-background-crispr-patent-process (accessed on 23 January 2021).
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- In the US, depending on the variety, already more than 80% of varieties are patent protected
- The catalogues list about 28.800 vegetable species. Plant Variety Catalogues, Databases & Information Systems. Catalogue for Vegetable Species. Available online: https://ec.europa.eu/food/plant/plant_propagation_material/plant_variety_catalogues_databases_en; Catalogue for Vegetable Species
- The catalogues list about 28.760 agricultural species. Plant Variety Catalogues, Databases & Information Systems. Catalogue for Agricultural Species. Available online: https://ec.europa.eu/food/sites/food/files/plant/docs/plant-variety-catalogues_agricultural-plant-species.pdf (accessed on 1 January 2021).
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- Scenario 2 would not require such solution, but it would also be a clear signal of market failure and under-utilization of innovation which hopefully can be avoided in view of the challenges of climate change
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- Typical methods for royalty sharing include (i) Patent Points: The sharing is based on patent use. Revenues are shared based on a point system following patents ownership or (ii) Equal Sharing: Royalties are allocated among the patent owners in equal parts or (iii) Mixed methods. Combination of of (i) and (ii), (iv) Enforcement Premium. Additional revenues can be allocated to owners that make patents available for enforcement.
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- Enabled Product” means any product, other than a Licensed Product, which is or incorporates, or which is made, identified, discovered, developed, optimized, characterized, selected, derived from or determined to have utility, in whole or in part, by the use or modification of, (a) any Patent Rights or any technology or invention covered thereby, (b) any Licensed Product or any Institution Technology Transfer Materials, (c) any progeny, modification or derivative of a Licensed Product, or (d) any living or nonliving cell, organism, microorganism (including viruses), plant, plant tissue or plant seed made or modified through use of a Licensed Product or technology covered by the Patent Rights, or any progeny, clone, modification or derivative of such living or nonliving cell, organism, microorganism (including viruses), plant, plant tissue or plant seed.
- The final plant will not comprise any of the Cas-machinery. Further, in most countries the scope of a method claim is limited to “direct products” i.e., the plant cell directly edited and does not extend to the ultimate plant
- It also remain to be seen, whether indeed the licenses are granted to all commercial entities even their commercial interest is solely outside the US where such license terms will be difficult to enforce
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- Detailed information about the statutes, members, and current patent estate can be derived from the ILP web-page: http://www.ILP-vegetable.org (accessed on 16 January 2021).
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- For variety patents the ILP establishes a cost-free mutual non-assert for breeding of new varieties. This comes as close as possible to a full breeders exemption under PVP
- Kock, M.; ten Have, F. The International Licensing Platform—Vegetables’: A prototype of a patent clearing house in the life science industry. J. Intellect. Prop. Law Pract. 2016, 11/7, 496–515. Available online: https://www.ilp-vegetable.org/uploads/Bestanden/News/Article%20ILP%20Journal%20of%20Intellectual%20Property%20Law%20&%20Practice%202016.pdf (accessed on 16 January 2021). [CrossRef]
- Trait patents cover to plant characteristics such as disease resistance, or nutritional value. The ILP is limited to unregulated traits, i.e., traits not considered genetically modified.
- Members are nor precluded to grant such rights under a bilateral license agreement.
- The reason results in the fact that handling GM technologies requires specific capabilities which are not compatible with the ILP’s requirement to be open for all interest parties. Especially smaller breeders will not have the capability to handle GM technologies nor the capacity to cover for the related risks and liabilities
- ILP Patent Register. Available online: https://www.ilp-vegetable.org/uploads/Bestanden/Patent%20Register/ILP%20Patent%20Register%20-%20total%2005102020%20changes%20marked%20in%20yellow.pdf (accessed on 16 January 2021).
- Baseball arbitration was developed as alternative to free agency for professional baseball players. Players and teams would submit their proposed salary based on evidence like e.g., player performance or comparative salaries. The panel can only accept the proposal they deem most realistic. The award is final and issued without explanation
- Samples, L.B. Resolving Construction Disputes through Baseball Arbitration. 2019. Available online: https://www.americanbar.org/groups/construction_industry/publications/under_construction/2019/spring/resolving-dispute-baseball/ (accessed on 18 January 2021).
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- Usually parties will prefer a bilateral licensing arrangement with MTA and cross-licensing deals elements, rather than a Standard License Agreement. Therefore the ILP “only” provides a safety net in case no bilateral agreement can be found. Bilateral agreement cannot be subject of a baseball arbitration
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- The experts cannot propose an average of the two proposals. Thus, if one proposal is unreasonable, automatically the other is adapted. In addition, the “losing” party has to pay the costs for the arbitration proceedings (30.000€)
- There is only an opportunity for a formality review of the proceedings, i.e., to verify whether the experts have followed the procedure and taken into account all evidence. There is no opportunity for an appeal on the merits of the case.
- This can—For example—Happen if there is emerging resistance for a disease resistance trait
- See Lemley, M.A.; Shapiro, C. Simple Approach to Setting Reasonable Royalties for Standard-Essential Patents, Stanford Public Law Working Paper No. 2243026. 2013. Available online: http://ssrn.com/abstract=2243026 (accessed on 21 February 2021).
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- An expert cannot in the five year before their appointment have been (i) a board member, secretary or expert; or (ii) a shareholder, an employee—Or had a special interest in or other relationship—With a vegetable breeding company.
- The current Expert Committee was confirmed by all Members which demonstrates the high standing of the experts in the field
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- Corteva declared to make germplasm, laboratory, and field testing technologies, and expertise available through collaborations with third parties via an “open-innovation” website at https://openinnovation.corteva.com/ (accessed on 9 June 2021).
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- This requies according to the TT-Guidelines (at para. 252), that there are no viable substitutes “both from a commercial and technical point of view”
- To qualify every patent that would cover a variety as “essential” would be circular and render the test meaningless
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- The necessarily simple royalty allocation mechanism of patent pools favors large companies with many “Patent Points” and disfavor smaller or young companies with small patent portfolios, even if they contribute breakthrough innovations. Patent pools may create an unhealthy incentive to file many patents to increase “Patent Points” and thereby the royalty share which could further contribute to the ticket.
- The pull-in effect may be too strong. In addition, already the practical difficulty to find candidates for the expert committee would be tremendous. Currently experts must have no affiliation with a vegetable seed company for the last five years and most are coming for field crop companies. An “all-crop” ILP would require the expert to have no affiliation with any seed company which would be in conflict with the requirement of expertise
- As long as the established ILP model is used the efforts might be moderate. All ILP related documents and agreements are available from the ILP web page
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- The uniform license fee of patent pools can likely not be employed, already because the applicable patents do not qualify as standard essential patents.
- In Quanta the US Supreme Court reaffirmed the patent exhaustion doctrine Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008).
- Horizontal competitors are offering substitute products or services. Vertical competitors act along a channel or a value chain and compete on how much they get to wrest from the total relative to each other
- While making the first seed can be costly and laborious, the subsequent propagation is usually cheap and easy
- Smith criticizes the “low bar of the non-obviousness test for grants of utility patents to varieties per se” and find that “maize breeders have generally failed to take advantage of UP [utility patents] to broaden the repertoire of useful germplasm even as diversity within heterotic pools has declined and the loss of genetic variance will accelerate as improved selection methods are implemented.” He “sees no valid public policy rationale to maintain eligibility of plant varieties per se for UP (utility patent) protection unless plant breeders take on board the potential protection provided by UP (utility patent) and undertake the risks and challenges associated with the introduction of new exotic genetic diversity.” Smith, J.C.S. The Future of Essentially Derived Variety (EDV) Status: Predominantly More Explanations or Essential Change. Preprints 2021, 2021050398. Available online: https://www.preprints.org/manuscript/202105.0398/v1 (accessed on 28 May 2021). [CrossRef]
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- It could be sees as interfering with the constitutional right to property and the principle of legitimate expectation
- Biotechnology related patents of require at least 5–7 years to grant. For controversial cases, such as native traits in Europe, most patents are already pending in examination for more than 10 years.
- Professor Kirchberg in the context of the pepper case submitted an opinion in which he expresses several concerns with a the exclusion of plants with native traits from patentability. Specifically he sees an issue with Article 14 of the German Constitution (Grundgesetz) which protects property including intellectual property including technical inventions. This right starts prior to grant: Even if no exclusive right has been established, the application can be of license agreements and provides for provisional rights. Kirchberg notes, that such limitation is especially problematic if it would be implemented with retroactive effect as it would violate the principle of protection of a legitimate expectation (“Vertrauensschutzprinzip”). Opinion.Available online: https://register.epo.org/application?documentId=E2B11MCS3486DSU&number=EP12756468&lng=en&npl=true (accessed on 20 December 2020).
- While the options for reverse engineering by sequencing are increasing quickly, they may only be an option for NBT-derived varieties if the initial variety is known and accessible. Only then will it be possible to narrow the possible causative changes. Otherwise it is still „complex“ to identify causative changes in the genome. Usually this still requires to establish genotype-phenotype associations by field testing which for complex traits (QTLs) could be highly laborious
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- The implementation of a holistic system requires to exempt plants from any protection by patents whether directly (e.g., through claims on plants), indirectly (e.g., through claims on DNA) or by a deferred protection (e.g., as a product of a protected method claim). Such exemption is covered by Article 27(3)(b) TRIPS, which allows Members to exclude plants from patentability. However, it needs to be implemented rather as a limitation to the patent rights than by rules on patentability. Such limitation should ensure that “the effects of the patent shall not extent to a plant, any of its parts, and the making or use of the before mentioned”. Similar exemptions exist in the Swiss patent law which prescribes—For example—That “The effects of the patent do not extend to…“biological material that is obtained in the field of agriculture due to chance or is technically unavoidable (Art. 9f) or “individual preparation of medicinal products in pharmacies” (Art. 9h). https://www.fedlex.admin.ch/eli/cc/1955/871_893_899/en (accessed on 10 June 2021).
- Based on a strong push from the EU Parliament and the Commission, the EPO’s Administrative Council implemented Rule 28(2) EPC which excludes plants obtained by essentially biological processes (i.e., plants obtained by conventional breeding) from patentability. The EPO’s Enlarged Board of Appeal in decision G3/19 (“Pepper”) confirmed the validity of this Rule thereby reverting its earlier decision in G2/07 (“Broccoli I”)
- Motion 20.3674 “Geistige Eigentumsrechte. Anpassung im Bereich Pflanzenzucht” by Maya Graf. Available online: https://www.parlament.ch/de/ratsbetrieb/suche-curia-vista/geschaeft?AffairId=20203674 (accessed on 9 June 2021).
- A compulsory license or cross license differs from an exemption as the compulsory license requires a reasonable compensation for the use while an exemption ensures that the respective plant is not covered by the patent rights.
- The Federal Council has rejected the motion declaring is as unnecessary.
- The ILP took more than 2 years to establish. It requires an unanimous consent of all members for all material changes to the ILP. With a growing membership this could become more difficult to achieve.
- Article L613-2-3, Art. 10 para 3: The protection conferred by a patent relating to a biological material possessing, by virtue of the invention, specific characteristics does not extend to biological matters possessing said specific characteristics obtained independently of the patented biological material and by essentially biological processes, nor biological materials obtained from them, by reproduction or multiplication. (Unofficial translation by the author).
- In view of the deviating definition for „essentially biological processes“ is should be considered to avoid this term and to rather use the alternative „crossing of entire genomes” suggest by Switzerland. With respect to the criteria of independent breeding it needs to be considered that a 3rd party can also reproduce the teaching of patent without using the material of the patentee. Therefore independence should also be from a use of the teaching of a patent. A possible wording could be: The protection conferred by a patent relating to a biological material possessing, by virtue of the invention, specific characteristics does not extend to biological matters possessing said specific characteristics obtained independently of the patented biological material and the teaching of the patent by an essentially biological process, nor biological materials obtained from them, by reproduction or multiplication.
- While not a limitation to patentability, it would achieve the legislative intent of the EU Commission while avoiding ambiguity and a substantial limitation of the rights the patentee. Kock, M.A.; Zech, H. Pflanzenbezogene Erfindungen in der EU—Aktueller Stand. GRUR 2017, 119, 1004–1013. [Google Scholar]
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- Council Directive 2002/53/EC on the Common Catalogue of Varieties of Agricultural Plant Species. OJ L193/1, Art 4. 2002. Available online: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex:32002L0053 (accessed on 9 June 2021).
- VCU requires “a clear improvement either for cultivation in general or for the specific uses which can be made of the crops or the products derived therefrom” which can be deemed the plant specific equivalent of a “significant technical progress of considerable economic interest”. Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL On the production and making available on the market of plant reproductive material (plant reproductive material law)/* COM/2013/0262 final—2013/0137 (COD) * final—2013/0137 (COD); Article 58.
- Case C-170/13 Huawei Technologies v ZTE (ECJ 16 July 2015) EU:C:2015:477. Available online: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A62013CJ0170 (accessed on 10 June 2021).
- In consequence, it only comprises a fraction of the varieties of varieties which breeders would be interested in, including breeders in the EU. A breeder in the EU might be interested to use a variety which is marketed in a non-EU country (e.g., US or Brazil) but today would be in no position to understand whether this Variety comprises a trait which in the EU is protected by a patent.
- These patents would not be necessarily considered “submarines” as they are usually published. What is however not transparent is whether a certain variety is covered by a patent or not as the related traits is not always promoted and not always phenotypically expressed. Under the principle of forfeiture a patentee can lose the right to enforce a patent if the alleged infringer could trust that he would not infringe any patent and has made investments in that trust (circumstance factor). Usually such circumstances lay in a time factor i.e., a delay to take action over several years. However, a mere lack of action is usually not sufficient to establish forfeiture. It is necessary that the later assertion on the patent right would violate the principle of good faith. A contradictory behavior of the patentee and a clear opportunity to initiate a case can substantially shorten the time factor. A contradictory behavior and a violation of good faith would certainly be given if a patentee on a written inquiry by a breeder does not clarify whether one of his varieties comprises a patented trait and then years later initiates a patent infringement case when the breeder brings his new variety to the market. Busse Patentgesetz §139 Rd, 190.
- The same should apply if the patentee has deliberately denied the information or provided misleading information.
- Linking effective enforceability to the public listing of the patents protecting a commercial product is also one of the principles behind the Orange Book FDA listing in the US, which triggers the Hatch-Waxman ANDA litigation procedure. Hence this is a tried and tested way to “manage” the interests of patentee sand third parties in high stakes litigation on valuable products.
- Possible language: A patent cannot be asserted against anyone who has produced a new plant variety in good faith by using biological material of a plant variety approved for seed marketing. A breeder is considered to be in good faith if he has asked the owner of the said plant variety, who is also the patent owner or a company associated with it, and within 30 days of receipt of this request: a) does not receive a response confirming the patent protection of this biological material; and b) could not find any patents in the plant variety register or in a database recognized and recognized by breeders regarding the plant variety used.
|No of Patents||Sunflower||Pepper||Brassicas||Melon||Tomato||Lettuce||Cucumber||Maize||Other||Total|
|Stack with mixed patent ownership||1||19|
|Target||A.I.R Approvals |
(4 January 2021)
|Applicant||A.I.R Approvals |
(4 January 2021)
|Illinois State Univ.||4|
(No example yet)
|Resolves complexity (“patent thickets) by providing a “one-stop-shop” to large patent portfolios||High antitrust hurdles: All patents needs to be essential. Usually associated with standards.|
Number game: Royalty allocations does not consider individual innovation value .
Take it all or leave it: No flexibility to pick and choose.
|Clearing houses (Example: ILP)||Establish FRAND terms for individual innovations.|
Low costs in running.
|High setup costs and efforts. |
No solution for stacking.
No solution for “external” method patents
|Easy to establish, no negotiation, limited anti-trust assessment.||Voluntary, not holistic. |
Lack of governance.
Often not transparent.
No solution for stacking.
|Simple, low transactional costs.||Economically not sustainable. |
Risk of anti-common effect and misappropriation.
|Simple, low transactional costs.||Voluntary w/o sanctions. |
Not holistic (only EU patents, EU varieties, ESA Members).
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Kock, M.A. Open Intellectual Property Models for Plant Innovations in the Context of New Breeding Technologies. Agronomy 2021, 11, 1218. https://doi.org/10.3390/agronomy11061218
Kock MA. Open Intellectual Property Models for Plant Innovations in the Context of New Breeding Technologies. Agronomy. 2021; 11(6):1218. https://doi.org/10.3390/agronomy11061218Chicago/Turabian Style
Kock, Michael A. 2021. "Open Intellectual Property Models for Plant Innovations in the Context of New Breeding Technologies" Agronomy 11, no. 6: 1218. https://doi.org/10.3390/agronomy11061218