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Patent Ruling Aids Seed Biotech Firms

Courts: Analysts say the Supreme Court is taking a tough stance to strengthen intellectual property rights.

December 11, 2001|MELINDA FULMER | TIMES STAFF WRITER

In a victory for companies that develop genetically modified plants, the U.S. Supreme Court ruled Monday that seeds and seed-grown plants can be patented.

The 6-2 ruling, which upheld a court of appeals decision, strengthens the intellectual property rights of the nation's largest seed biotechnology companies.

If these protections had been struck down, companies such as DuPont, Monsanto Co. and Sygenta would have seen hundreds of patents invalidated or restricted, giving other companies and farmers access to their technology without having to pay for it.

"We have spent hundreds of millions, if not billions, to bring forth our products, some biotech solutions, some not," said Monsanto spokeswoman Lori Fisher. The court "clearly wanted to protect the rights of investors."

With biotechnology advancing at a rapid pace, the ruling sends a signal that the nation's highest court is taking a tough stance on intellectual property rights in every industry, said analyst Donald Carlson of J.P. Morgan.

The U.S. Patent Office has granted patents to plants for 16 years.

To date, more than 1,800 patents have been issued for plants and plant parts.

J.E.M. Ag Supply, an Iowa seed firm, brought the legal challenge after it was sued for patent infringement by DuPont's Pioneer Hi-Bred unit for reselling 17 patented varieties of its corn.

J.E.M. had argued that because hybrids are not mentioned in the Plant Protection Act, these products are regulated by the Plant Variety Protection Act of 1970, a less restrictive certificate program administered by the Department of Agriculture.

Putting regulation under that program would have hurt biotech companies because it would not have allowed Pioneer and other seed companies to collect licensing fees for seeds used in research or for seeds that farmers collected from their fields and replanted.

Justices struck down J.E.M.'s argument, saying that because seed-grown plants qualify for the less-restrictive USDA certificate program doesn't mean they can't be patented.

"Denying patent protection simply because such coverage was thought technologically infeasible in the 1930s, however, would be inconsistent with the forward-looking perspective of the utility patent statute," said Justice Clarence Thomas, writing for the court's majority.

But critics say the ruling perpetuates a system that slows the pace and diversity of research and punishes farmers by driving up costs.

But biotechnology proponents claim that protecting the profits of these firms ensures that new, more efficient varieties of plants will keep coming to market.

"Intellectual property rights are every bit as important to the seed industry as they are to the software industry," said analyst Donald Carlson of J.P. Morgan in New York. "If your competitor can quickly [come out with a new product] by stealing your germ plasm, your advantage in the marketplace is substantially diminished."

"Intellectual property rights are every bit as important to the seed industry as they are to the software industry."

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