PATENTS & REGULATION: U.S. Representative inroduces bill on compulsory license for patented seeds
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TITLE: COMPULSORY LICENSE FOR PATENTED SEEDS?
SOURCE: Lexology, USA
AUTHOR: Courtenay C. Brinckerhoff
SUMMARY: "Congresswoman Kaptur renewed her efforts to allow farmers to harvest and replant seeds obtained from plants derived from patented seeds, by introducing the Seed Availability and Competition Act of 2011 (H.R. 307). [...] with growing public mistrust of genetically modified organisms?and genetically modified food in particular?the agricultural biotech industry should not be complacent in the face of efforts to undermine important patent rights."
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COMPULSORY LICENSE FOR PATENTED SEEDS?
Congresswoman Kaptur (D-Ohio) renewed her efforts to allow farmers to harvest and replant seeds obtained from plants derived from patented seeds, by introducing the Seed Availability and Competition Act of 2011 (H.R. 307). Agricultural biotech companies who develop genetically engineered seeds to produce crops with improved properties may take comfort in the fact that Kaptur has been introducing legislation along these lines since 2004 to no avail. Still, with growing public mistrust of genetically modified organisms?and genetically modified food in particular?the agricultural biotech industry should not be complacent in the face of efforts to undermine important patent rights.
The Seed Availability and Competition Act of 2011
The proposed legislation would establish a compulsory licensing program for seeds harvested from plants derived from patented seeds. The program would be run by the Secretary of Agriculture, who would establish a Patented Seed Fund for compensating patent holders. The program would operate as follows:
- The Secretary of Agriculture would set fees for the right to retain harvested seed ?based on the type and quantity of seed retained.?
- Farmers who want to retain harvested seed would provide an accounting to the Secretary of Agriculture and pay the corresponding fee, which would go into the Patented Seed Fund.
- The Secretary of Agriculture would distribute the collected fees to the patent holders.
- Farmers could obtain a refund if they are ?unable to plant or harvest the retained seed as a result of natural disaster? or ?such other circumstances as the Secretary considers . . . appropriate.?
A key provision of the proposed law is the following section:
?INAPPLICABILITY OF CONTRACTS AND PATENT FEES.?A person who retains seed under subsection (a) from the harvest of patented seed or seed derived from patented seed shall not be bound by any contractual limitation on retaining such seed, or by any requirement to pay royalties or licensing or other fees, by reason of the patent, for retaining such seed.
Thus, the law attempts to nullify any patent-derived rights that patent holders may have to prevent or require payment for retained seed.
Another provision that raises red flags is the Tariff on Certain Imported Products. This provision appears to attempt to penalize foreign entities who export patented, genetically engineered seed into the U.S. and charge U.S. purchasers more than they charge purchasers in the exporting country. This provision would impose a tariff ?that recovers the difference between the fees paid by purchasers of the seed in the United Sates and purchasers of the exported seed in that country.? The tariffs would be deposited into the Patented Seed Fund, but it is not clear how these fees would be distributed.
Weeding Out Compulsory License Provisions
This legislation reminds me of arguments being raised in the context of patents directed to personalized medicine and genetic diagnostics. The anti-patent factions believe that the inventions should be free (or at least inexpensive) for all to benefit from, but overlook the significant investments required to develop and validate the inventions in the first place?why should competitors be able to freeload on the innovators? efforts? They also ignore the very real possibility that eliminating or undermining available patent rights will stifle future innovation, depriving all of us of technological advances that otherwise might improve?and extend?our lives.
I also question whether this proposed law would achieve its intended effect. Patent holders could respond to the law by negotiating higher fees for the initial sale or license of patented seeds, knowing that they won?t be able to charge farmers more if they decide to retain and replant progeny seed. This could disadvantage farmers in the long run, as they may find themselves paying for ?unlimited? use when they might only want one-time use.
It will come as no surprise that I am not comfortable with any law that nullifies patent rights. I believe that patents do promote innovation and investment, and can support economic growth. Patented inventions in the ag-biotech space have improved crop production with disease-resistance, herbicide-resistance, drought-resistance, and increased yield that will help feed our growing global population. I hope that Congress understands that this proposed legislation has the potential to do more harm than good, and leaves it to collect dust on the shelf, as it has for the past several years.