The fact that I'm here today speaks to the advances the seed industry has undergone recently,” said Joel Cape at the Arkansas Seed Growers meeting in Brinkley, Ark., on Jan. 19. “Ten years ago, having an attorney coming to a meeting like this and speak about intellectual property law would be fairly unusual — or, maybe, unheard of.”
But advances in technology and science have come rapidly and those responsible have increasingly sought out protections of intellectual property laws. Thus the growers' request that Cape (of New Orleans' Frilot, Partridge, Kohnke and Clements, LC) present an overview on the basics of how intellectual property impacts the seed industry.
The simple definition Cape uses for intellectual property “is it consists of discoveries, inventions, writings and compositions. A notable example of such an invention would be the light bulb or phonograph. Compositions would include songs and there's a lot of activity in protecting songs in an era when it's so easy to download them for free.”
The body of intellectual property law tries to achieve some important goals, “sometimes intangibles.” It also seeks to encourage innovation, to solve problems and address needs. It does so by giving inventors protection for their hard work, investment and effort.
“No one wants the fruit of their labor simply squandered or taken advantage of.”
A further benefit of innovation is the body of public knowledge and wisdom increases. Many intellectual property laws require the disclosure of invention or idea that became patented. “At the end of the day, that knowledge is available for us to address future problems and needs.
“The laws I'll speak on mainly consist of patent laws that grant utility patents and the Plant Variety Protection (PVP) Act. The broader body of law also includes plant patents, copyrights, trademarks and trade secrets.”
In agriculture, several of these laws have been responsible for significant innovation. “We've seen significantly increased crop yields and a variety of different traits (herbicide resistance, insect resistance, improved flavor, improved consistency of commodities, drought tolerance, etc.). Without the protection of these laws, it's safe to say those things wouldn't have occurred.”
In order to appreciate how these laws operate in the modern seed industry, Cape pointed to the emergence of the U.S. seed industry.
When the early settlers came to these shores, they brought seed produced in Europe. The settlers mistakenly thought the seed would sustain them and allow settlements to grow and develop.
“What they found was, when planted, that seed wasn't suited for the growing environment here. Most of those crops failed. In fact, many of the early settlers nearly starved to death.
“They began trading with the Native Americans for the few agriculture commodities they'd been cultivating. Remember, there aren't a great many crops native to America. But those early trades formed the base of American agricultural germ plasm.”
As the country became colonized and increasingly settled, seed production mainly took place with wealthy landowners. They were the only ones who could afford to import seed and put the effort into adapting it to the New World's growing environment. Many of these landowners — Thomas Jefferson and George Washington among them — formed agricultural “societies.”
Seed was exchanged through these societies. “However, most of those societies weren't open to everyone. The seed the landowners brought over weren't available to most farmers.”
1819 marked the first instance when seed became widely available in the country. That year, the secretary of the treasury instituted a program requesting U.S. ambassadors and military officers stationed around the world gather seed from their posts and bring it home for U.S. farmers.
The successor to that original program was the Patent Office. In 1839, the commissioner of patents, Henry Ellsworth, secured funding from Congress to collect and distribute agricultural seed and statistics.
That, in turn, established a free seed distribution program through the Postal Service. Besides letters, seed was sent through the Postal Service five years prior to any other parcel was sent.
The program was fairly successful, said Cape. Ten years after it started, the Patent Office sent out 60,000 packages of seed annually. By 1855, the office had shipped out over 1 million seed packages.
The final successor in the free seed program was the USDA. When it was birthed in 1862, one of USDA's primary purposes was the procurement, propagation and distribution of new and valuable plant varieties.
The USDA's program was far and away the most successful. “About 15 years after it was established, about a third of the entire USDA budget was devoted to the free seed distribution program. By the turn of the century, USDA was sending out 22 million packages of seed yearly. Each of those packages contained five packets of seed. So, essentially, by 1900, they were sending out over 1 billion packages of seed.”
That is the backdrop for the early U.S. seed industry. There were seed companies during the 1800s, but many went under. “There were a variety of reasons for that — one is improvement in seed variety and quality relied on simple selection techniques. There wasn't a great deal of science being applied. Using that method, the process of improvement was very slow.”
Successes and barriers
Significant obstacles faced the private seed industry. First, improvements weren't available to everyone. Plus, there weren't resources to distribute them and the marketplace wasn't there when seed was being freely traded.
“The government's free seed program was the biggest barrier. As you can imagine, it doesn't take a lot of effort for the government to basically destroy the market through free seed. Private seed companies had a very difficult time.”
And for those trying to make improvements in the base germ plasm, there was no protection. “They didn't have a lot of incentive. Shortly after any improvement was released, it didn't take long before everyone had it. Seed could be saved, traded, sold and the market was destroyed.”
At the beginning of the 20th century, some significant developments changed things and set the stage for the U.S. seed industry to become viable. One key was the rediscovery of Gregor Mendel's work on heredity, republished in 1900. That, ultimately, led to the hybridization of seed corn.
“With hybridization, there was some built-in protection for those who performed the research. Hybrid seed corn yields fall off significantly in the second, and subsequent, generations due to the disappearance of hybrid vigor. And, of course, plant breeders could control the parent line.”
Another significant event was the formation of the American Seed Trade Association in the late 1800s. Members were private seed companies that came together to promote their interests before Congress. One of their primary goals was to stop the government's free seed distribution program. Ultimately, in 1924, they succeeded when the USDA seed program was terminated.
With those events, the only thing remaining to get the seed industry going was legal protection. “The first federal law aimed at protecting agricultural intellectual property was the Plant Patent Act (PPA) of 1930. At the time that passed, and in the understanding of science of the day, it was believed that plants couldn't be patented.
“Utility patents had been granted almost since the country's founding. But there were a variety of reasons plants weren't patented. One was it was thought plants were products of nature and couldn't be improved or tinkered with by man. Another thing was the PPA had some stringent requirements. In particular there's a written description requirement. When the government gives you patent protection, they want you to enrich public knowledge. One way that's done is through the written description. It was thought you couldn't adequately put into writing a description of a plant so someone else could read about it and understand the differences.”
So when the PPA was passed it was limited to asexually-reproducing plants (those that reproduce by cutting or grafting). It wasn't until 1970 that the Plant Variety Protection Act (PVPA) was passed basically to fill a gap left by the PPA. The Plant Variety Protection Act was aimed at sexually-reproducing plants and it granted patent-like protection to them.
More recently, utility patents were granted for living organisms and plants. The Supreme Court has confirmed that with advancements in technology plants and living organisms can be patented.
How the acts work
Having explained the historical framework for the U.S. seed industry, Cape next explained how the patent laws work. In particular, he focused on utility patents and the PVPA, the two things most prevalent in the industry.
“For a utility patent, you must demonstrate that the invention is new and useful. As for the writing requirement: the inventor must be able to describe his invention so that others can understand it and, once the patent expires, they can use or make it. With plant patents, one must also submit a deposit of biological material.
“To obtain a Plant Variety Protection certificate, the breeder must demonstrate the variety is new, distinct, uniform and stable. Again, Plant Variety Protection is available only to sexually-reproducing varieties. To get a Plant Variety Protection certificate, a deposit of seed must be made.”
The length of protection for a utility patent is 20 years from the date the application is filed.
For the PVP, the law has been amended. “When first enacted, Plant Variety Protection protection lasted 18 years. In 1994, there were significant amendments made and one was to expand protection up to 20 years.”
It's worth noting, said Cape, that these are laws only of the United States. “They operate in the borders of the country and that's where their protection ends. If you operate or live in a foreign country, you must abide by whatever laws are in place there. Some countries have intellectual property laws and some don't. In developing countries, particularly, there may be no legal system in place to protect inventions or novel innovations.”
Once the protection is granted in the form of patents or Plant Variety Protection certificates, the innovator has certain rights that can be infringed upon. The idea behind a patent is the right to exclude others from using, making or selling the invention for a certain length of time. The violation of that right under a utility patent constitutes infringement.
As for the PVPA, it takes a different approach to infringement. “A Plant Variety Protection certificate is infringed upon when someone without permission sells, markets, offers to sell, ships or solicits an offer to purchase a protected variety. It's forbidden when someone imports a sexually-reproducing variety into the United States as a step in marketing or using the varieties in producing a hybrid as opposed to developing a hybrid — this relates to an exemption I'll mention in a minute. It can also be infringed by dispensing the variety to others without proper notice.”
The Plant Variety Protection has some important exemptions. The one of most interest to producers is probably the saved seed exemption. When originally enacted in 1970, the Plant Variety Protection Act had an exemption built in for farmers wanting to save seed from a protected variety. Not only could they save it but they could also sell it to other producers.
When the 1994 amendments were passed, the farmer-to-farmer sales exemption was eliminated. So, seed can still be saved but not sold.
“It's important to pay attention to what version of the law a particular variety is protected under. Those protected from 1970 through around 1993 can still be saved and sold. How many of those varieties remain available, I'm not sure. But certificates post-1994 prevent saved seed from being sold.
“There's also a research exemption for protected varieties for anyone engaged in research or developing new varieties.”
The remedies the patent, or Plant Variety Protection holder, has include the right to file a civil law suit. The patent holder can seek an injunction to halt whatever infringing activity there may be.
They can also seek damages. The damages can be trebled by the court and, in exceptional cases, attorney fees are awarded to the prevailing party.
“There really aren't any criminal penalties associated with patent or Plant Variety Protection certificates. Basically, the only criminal penalties associated with these laws are for false marking. That includes marking an invention or plant with someone's patent or certificate that doesn't belong to you… or indicating a patent has been applied for when it hasn't. The penalty for that under patent law is $500 per offense and, under the PVPA, $500 to $10,000.”