JUDGE CONCERNED THAT ALFALFA MAY BE A LITTLE RASCAL AND OTHER LEGAL NEWS
Phill Jones
In recent years, federal district courts have found environmental statute violations in the way that the Animal and Plant Health Inspection Service (APHIS) regulates genetically engineered (GE) plants. A federal judge recently fashioned an unusual remedy for a violation: he placed a permanent injunction on an APHIS-approved cultivation of a GE crop.
The case began in June 2005 when APHIS issued a Finding of No Significant Impact and approved Monsanto Company's petition requesting nonregulated status for GE Roundup Ready® alfalfa. Opponents to deregulation stressed the possibility that bee pollination could transfer the GE alfalfa's glyphosate tolerance gene to conventional alfalfa. Nevertheless, APHIS concluded that growers of conventional or organically-grown crops could emplace reasonable quality control measures to ensure that their crops did not include any GE alfalfa.
Alfalfa growers, the Sierra Club, and other farmer and consumer associations filed a lawsuit, alleging that APHIS' deregulation of GE alfalfa violated the National Environmental Policy Act. Cultivation of GE alfalfa would result in spread of the glyphosate tolerance gene to natural alfalfa, they contended, an event that would create a significant environmental impact.
Charles R. Breyer, a judge in the US District Court for the Northern District of California, agreed with the plaintiffs. APHIS had effectively concluded, according to the judge, that any environmental impact would be insignificant, because organic and conventional farmers bore the responsibility to prevent genetic contamination. Despite APHIS' conclusion, Judge Breyer could find no evidence that the agency had investigated if farmers could actually protect their crops from genetic contamination.
On February 13, 2007, the judge held that APHIS had failed to take a "hard look" at the potential environmental impacts of its deregulation decision, a step required by the National Environmental Policy Act. He granted plaintiffs' motion for summary judgment on the claim that APHIS must prepare an Environmental Impact Statement (EIS).
On March 2, the plaintiffs filed a request for a permanent injunction to block APHIS' deregulation of the GE alfalfa until the agency preformed its environmental review. The judge granted plaintiffs' request on May 3. First, the judge vacated APHIS' June 2005 determination of nonregulated status for the GE alfalfa. Then, the judge instructed the agency to prepare an EIS and reconsider the deregulation petition. APHIS must complete its EIS and again decide to deregulate before farmers can plant Roundup Ready alfalfa.
Meanwhile, farmers had planted 220,000 acres of GE alfalfa before the ban. Judge Breyer decided that the alfalfa may be grown, harvested, and sold under certain conditions. For instance, farmers must apply APHIS-approved procedures to clean farm equipment used in GE alfalfa production to minimize the risk of the spread of GE alfalfa seed and hay. Harvested GE alfalfa must be stored in designated and clearly labeled containers. And in the most controversial condition, APHIS must gather information about the locations of GE alfalfa seed production sites and GE alfalfa hay fields and reveal this information to the public. This would enable producers of conventional or organically-grown alfalfa to decide if they should test their crops for contamination.
APHIS has requested that the judge amend the conditions, including the widespread disclosure of specific locations of GE alfalfa fields. Previous disclosures of GE crop locations, the agency noted, triggered vandalism and intimidation of farmers.
USDA spokeswoman Rachel Iadicicco told the Associated Press that the court-imposed environmental study could take up to two years to complete. Monsanto Company announced that the company is reviewing its options, including the possibility of an appeal.
EPO Makes A Meal of Soy Patent, While Court Issues Toxic Verdict
In another unusual May 3 decision, the European Patent Office (EPO) revoked Monsanto's patent EP301749B1 with claims for the genetic modification of soybean plants. The EPO took this action 13 years after the patent's grant.
In July 1988, Agracetus filed the patent application, which describes particle bombardment methods for genetically altering soybean plants. The EPO granted the patent in March 1994 with claims to genetic engineering methods, and soybeans and seeds that contain a genetic alteration. Monsanto acquired Agracetus in 1996 and became the owner of the soybean patent.
For years, opponents fought against the patent, alleging that it gave Monsanto de facto control over all GM soybeans. The patent's adversaries realized one victory in 2003 when the EPO struck a claim to a method of genetically altering any kind of plant with particle bombardment. The agency decided that the patent lacks sufficient disclosure for such a broad claim and limited claims to soybean plants.
Now, the EPO has revoked the soybean claims on the basis that the claims lacked novelty. An EPO spokesman said that the decision is final with no further appeals available. Since the patent would have expired in 2008, elimination of the soybean claims should yield limited practical effects. However, the legal basis for the decision may significantly impact the agbiotech industry. The EPO will publish an explanation of its decision by the end of the year.
Battles over Bacillus thuringiensis technology continue. In July 2002, Syngenta filed a lawsuit claiming that Monsanto and other companies infringed at least one of US Patent Nos. 6,075,185; 6,320,100; and 6,403,865. These patents include claims to synthetic Bt toxin genes designed for increased expression in corn and claims to transgenic corn plants resistant to insects.
In December 2004, Judge Sue L. Robinson of the Delaware District Court held that defendants had not infringed Syngenta's '185 and '100 patents as a matter of law. These patents focus on methods for optimizing codons for more efficient expression of Bt insecticidal proteins in corn. The judge decided that the codon usage of defendants' products does not fall within the scope of the '185 and '100 patent claims. A jury then found the '865 patent invalid on the grounds of obviousness and lack of written description.
Syngenta appealed the jury verdict to the US Court of Appeals for the Federal Circuit. On May 3, the Federal Circuit affirmed.
The relevant claims of the '865 patent cover transgenic corn plants that produce a Bt protein encoded by a recombinant gene that has a G+C content of at least about 60%. The key prior art reference presented to the jury for an obviousness consideration was a published patent application of Kenneth A. Barton and Michael J. Miller, US Patent Application Publication No. 2001/0003849. The document teaches that Bt genes have a high proportion of codons rich in A+T, while plants generally have codons rich in G+C. Barton and Miller describe a method for enhancing Bt toxin expression in GE plants by selecting codons that reflect the G+C bias.
While conceding that the general notion of substituting codons rich in G+C may have been obvious, Syngenta insisted that the idea to modify the coding sequence of the Bt toxin gene to increase the G+C content to more than 60 percent would not have been obvious. In one line of argument, Syngenta asserted that the patent application focused on GE tobacco plants and that the same codon substitution strategy could not reasonably be expected to succeed in corn.
The court pointed out, however, that the application includes a scorched earth statement: "there is good reason to believe and expect that the increased efficiency of expression achieved in tobacco through the use of the method and coding region of the present invention will be equally applicable in other plant species, as it is in tobacco." The Federal Circuit found substantial evidence to support the jury's verdict on obviousness.
No Savior for Seed Saver
For the third time, the Federal Circuit rendered a decision on the patent dispute between farmer Homan McFarling and Monsanto. The litigation's origin dates to 1998 when McFarling purchased Monsanto's Roundup Ready soybean seeds. He also signed the company's Technology Agreement that required him to use the seed for planting a commercial crop in a single season. Under the contract, McFarling could not supply seed to any other person for planting, save any crop produced from the seed for replanting, and supply saved seed to anyone for replanting. Yet McFarling saved 1500 bushels of Roundup Ready soybeans from his 1998 harvest and planted them the following year. He saved over 3000 bags of soybeans from his 1999 harvest for his next crop.
When Monsanto discovered that McFarling had saved the GE seeds, the company sued the farmer in the Eastern District of Missouri, alleging patent infringement and breach of contract. The district court ruled that the farmer could not use seed saved from crops grown with the patented soybeans. McFarling appealed to the Federal Circuit and lost.
Back in district court, Monsanto moved for summary judgment on its claims for patent infringement and breach of the Technology Agreement. The court ruled in favor of Monsanto.
McFarling appealed to the Federal Circuit, claiming that the district court erred when it ruled against his patent misuse defense, his antitrust counterclaim, and his defense under the Plant Variety Protection Act. The Federal Circuit upheld the district court's decision holding McFarling liable for breach of contract and dismissing McFarling's counterclaims and defenses. The Federal Circuit remanded the case for a determination of Monsanto's actual damages.
In a petition for a writ of certiorari to the US Supreme Court, McFarling pressed his patent misuse defense and antitrust counterclaim. The Court denied the petition.
Once again in district court, a jury returned a damages verdict of $40 per bag of saved seed, adding up to about $375,000 owed to Monsanto. McFarling appealed.
At the Federal Circuit, McFarling argued that the amount of the damages award should be limited to $6.50 per bag. This is the Technology Fee that Monsanto charged licensees who purchased Roundup Ready seeds under its Technology Agreement.
The Federal Circuit disagreed. Under the Monsanto license agreement, soybean farmers paid the company a Technology Fee and promised to refrain from planting Roundup Ready seed saved from a previous season's crop. The promise ensured that farmers would purchase Roundup Ready seed from an authorized distributor seed company, which also charged a fee for soybeans. Monsanto effectively split its royalty fee into a $6.50 direct payment and a payment of $19 to $22 to the seed companies that promoted and distributed Monsanto's products.
In addition to these royalty benefits, the court found advantages of the contract, including an increased yield and decreased cost of weed control. Altogether, the benefits justified the jury's assessment about a reasonable royalty due to Monsanto, the court held.
The decision may signal the end of the case. This time, the Federal Circuit did not send an issue back to the district court.
Selected Sources
Elias P. 2007. Judge Prohibits Planting of Genetically Engineered Alfalfa Until Government Can Study It. Associated Press (May 3, 2007)
Geertson Seed Farms et al. v. Mike Johanns and Monsanto Company, Civil Action C 06-01075 (N.D. Cal., May 3, 2007). Available at the US District Court for the Northern District of California website (http://www.cand.uscourts.gov/)
Monsanto Company v. Homan McFarling, Docket No. 05-1570 (May 24, 2007). Available at: http://fedcir.gov.
Osterwalder R. 2007. Soybean Patent Revoked in Appeal Proceedings. (May 3, 2007). Available on the EPO website (http://www.epo.org)
Stafford N. 2007. GM Patent Rejected After 13 Years. News@Nature.com (May 4, 2007).
Syngenta Seeds, Inc. v. Monsanto Company et al., Docket No. 2006-1203 (May 3, 2007). Available at: http://fedcir.gov
Phill Jones
BiotechWriter.com
PhillJones@nasw.org

ISB News Report
1900 Kraft Drive #103
Corporate Research Center
Virginia Tech
Blacksburg, VA 24061
The material in this News Report is compiled by NBIAP's Information Systems for Biotechnology, a joint project of USDA/CSREES and the Virginia Polytechnic Institute and State University. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture, or Virginia Tech. The News Report may be freely photocopied or otherwise distributed without charge.
ISB welcomes your comments and encourages article submissions. If you have a suitable article relevant to our coverage of the agricultural and environmental applications of genetic engineering, please e-mail it to the Editor for consideration.
Ruth Irwin, Editor (rirwin@vt.edu)
To have the News Report automatically e-mailed to you, send an e-mail message to
isb@vt.edu with your request.
Connect to http://www.isb.vt.edu for internet access to ISB News Reports, textfiles, and databases.
Information Systems for Biotechnology, Virginia Tech, 1900 Kraft Drive, Suite 103, Blacksburg, VA 24061, tel: 540-231-3747, fax: 540-231-4434, e-mail: isb@vt.edu