Why should seeds of 2nd, 3rd, 4th generation and so on, be considered intellectual property?

Expert response from Professor Drew Kershen

Earl Sneed Centennial Professor of Law (Emeritus), University of Oklahoma, College of Law

Friday, 20/12/2013 15:08

To answer these questions, one needs certain background information and context involving law and policy.  After the background information and context, I can address the specific questions that you have asked.

While the United States Supreme Court decision in Bowman does create a precedent that allows seed companies to enforce their patents in seeds against farmers who save seeds, the Bowman decision was not a surprise to those who knew intellectual property law.  Why?

Seed companies have been able to obtain intellectual property rights in seeds for the last 100 years.

Seed companies first obtained intellectual property rights in seeds when seed companies, most famously Pioneer Hi-Bred founded by Mr. Henry Wallace in Iowa, controlled the in-bred parent lines (both male and female) used to produce hybrid seeds in corn.  Seed companies controlling the in-bred parent lines through state-law trade secret protection.  Trade secrets are a form of intellectual property.  Trade secrets have no time limit and can be enforce basically forever, so long as the trade secrets are kept secret.  (Think of the formula, a trade secret, for Coca Cola.) 

Moreover, hybrid seeds do not breed true to type by natural cross-breeding in corn.  If farmers save the offspring of hybrid seeds, farmers lose at least 20% of the yield potential of the hybrid seed.  Consequently, farmers, in the United States and around the world, repurchase seeds on an annual basis.  As a practical matter, seed companies had a form of biological enforcement of their trade secrets – forever.

In 1930, the United States Congress enacted the Plant Patent Act whereby horticultural breeders could gain a patent for new, distinct, and useful asexually reproduced plants.  Through this act, plant breeders could bring enforcement (infringement) law suits against anyone who used their asexual plants for cuttings for as many generations of cuttings as were covered by the term of the patent.  (Today patents generally have terms of 20 years.)

In 1970, the United States joined, and Congress adopted, the international treaty on Plant Breeder’s Rights (known commonly by its French initials as UPOV).  In the United States, plant breeders can obtain a plant variety certificate that provides protection similar to a patent for new, distinct, uniform varieties of plants created by sexual reproduction.  In 1994, the United States ratified, and Congress adopted, the 1990 UPOV version that strengthened plant breeders’ rights.  UPOV differs from trade secrets, plant patents, and utility patents because farmers are permitted to save seeds from the certificated varieties for growing on their own farm.  However, farmers are prohibited from selling, trading, or exchanging with anyone else for seeding purposes.

In 1980, the United States Supreme Court in a decision of Diamond v. Chakrabarty decided that plant breeders could obtain utility patents on living matter so long as the plant breeder could satisfy the four statutory requirements for obtaining a patent: new, useful, non-obvious, and properly described.  In 2001, in a case of J.E.M. Ag Supply v. Pioneer Hi-Bred International, the U.S. Supreme Court ruled that the Chakrabarty precedent applied to seeds.  Finally, in the Bowman decision, the Supreme Court confirmed that farmers cannot save seeds of patented seeds.  It has always been the rule for general (utility) patents that a person cannot replicate or create a copy of the patented item.  The Supreme Court in Bowman unanimously applied this long-established rule to patented seeds.

With this background and context, I can answer the questions directly.  Patents have a term of twenty (20) years.  Thus, farmers cannot replicate or create a copy of the patented seed during that twenty years.   Patented seed exists in seed produced through modern breeding, both conventional breeding and genetically-engineered breeding.  In fact the J.E.M. Ag Supply case involved a patent in conventionally bred seed.  It is completely inaccurate, as the history described above, to think that farmers first faced intellectual property in seeds and reproductive material after genetically-engineered seeds came to market.  Farmers in the United States, and many other countries, have dealt with intellectual property rights in seeds for 100 years.

Why would the Supreme Court and Congress consistently grant plant breeders intellectual property in seeds?

Intellectual property (whether trade secrets, plant patents, plant variety certificates, or utility patents) exists, as the U.S. Constitution states in Article 1, Section 8, clause 8, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

How does intellectual property in seeds “promote the Progress of Science and useful Arts”?  Two ways.

Plant breeders (whether individuals, companies, cooperatives, or universities, or USDA) invest significant sums in creating, developing, and testing new varieties of crops.  For seed varieties, it is not unusual for a plant breeder to invest millions on a single variety in research and development costs.  Plant breeders would not invest these millions unless they had a way of recovering research and development costs.  Intellectual Property provides the “exclusive Right” that allows the plant breeder to have a chance to recover those costs if seed dealers and farmers adopt that variety and pay for the seed.  These research and development costs can also be called “invention” costs.

In addition, depending upon governing statues about how a seed can gain authorization for commercial release, plant breeders can also spend millions of dollars to gain regulatory approval for sale to seed dealers and farmers.  These regulatory costs are particularly large for genetically-engineered seeds.  The “exclusive right” of Intellectual Property allows the plant breeder also the chance to recover these regulatory costs.  Regulatory costs can be also be called “innovation” costs.

Hence, the policy decision made by the U.S. Constitution, congressional statutes, and Supreme Court decisions is to allow intellectual property rights in seeds so that plant breeders have an incentive to invest time, talent, and money in creating new varieties of seeds for agricultural crops.  Without intellectual property rights in seeds, the progress of science in the plant breeding would diminish.

Farmers quite easily calculate whether the costs of improved seeds is worthwhile to them.  Farmers quite easily calculate whether the harvests they obtain from improved seeds allows a greater profit and benefits to their farming operations than buying lesser quality seeds.  The vast majority of farmers voluntarily purchase improved seeds.  Only a few attempt to gain improved seeds without paying for them by saving seed in violation of the “exclusive right” of inventors to their discovery.