Monsanto's Hollow Victory in the Percy Schmeiser Seed Saving Case

So, who really won the Schmeiser Decision?

by E. Ann Clark, Ph.D.
Dept. of Plant Agriculture, University of Guelph, Guelph, ON

(Sunday, June 13, 2004 -- CropChoice guest commentary) -- The headlines reported
a Supreme Court Decision in favor of Monsanto in their 21 May judgement on the Schmeiser v. Monsanto case (http://www.lexum.umontreal.ca/csc-scc/en/index.html ).

But what exactly did Monsanto win? Indeed, did Monsanto 'win', or was it at
best, the weakest possible victory - a 5 to 4 decision - on just one of the
two contentious issues, with a significant loss on the other?

The text of the Decision illustrated the depth of the disagreement among the
judges. The very first sentence of the judgement was:

"Held (Iacobucci, Bastarache, Arbour and LeBel JJ dissenting in part): The
appeal should be allowed in part".

Because Schmeiser was the appellant, 'partial support for the appeal' means
a split Decision, with winners and losers on both sides.

To analyze this pivotal Decision, I¹d like to first work through the two
issues, and then discuss some of the implications that lead from the
Decision.

What Were the Issues?

Issue 1. The first part of the Decision was financial in nature and
pertained most directly to the Schmeiser family. At issue was a lower court
judgement which had handed over the full value of Schmeiser's 1997 canola
crop - roughly $19,000 - to Monsanto, and further saddled the lone farmer
with all of Monsanto's legal fees - which amounted to $153,000 just for the
first hearing. Submission of Monsanto's legal bill to Schmeiser was also the
first revelation that Keith Downey, a retired AAFC (Agriculture and
Agri-Food Canada; analogous to the USDA) employee who still retains an
office at the AAFC research station at Saskatoon, had testified against
Schmeiser as a paid member of the Monsanto team.

On this first issue, the nine judges agreed with the argument framed by
Schmeiser's lawyer Terry Zakreski. Because Schmeiser had not sprayed
Roundup, he had not benefitted in any way from the presence of Monsanto's
uncontainable RR gene. As no part of the value of his crop could therefore
be attributed to the RR gene, Monsanto was owed none of the value of the
crop. Remember this key point, as it will be shown to be important, and not
just to Schmeiser.

Furthermore, in a particularly unusual move, the Supreme Court also
concluded that Schmeiser should be relieved of responsibility for paying
Monsanto's now quite considerable legal bills over the entire 7 year
process. The 'loser' in such cases is almost always obliged to absorb the
legal costs of the winner. But not in this contentious, 5-4 decision.
Interesting.

The most direct effect of the Supreme Court Decision was that Zakreski's
stellar arguments had saved the home and livelihood of the septagenarian
Schmeisers. Monsanto had already taken out writs against their home, farm,
and business, and had the Decision been otherwise, would have rendered this
courageous farm family not simply destitute but homeless.

Issue 2 The second issue pertained to the elasticity of Monsanto's
interpretation of the Canadian Patent Act. Five of the nine Supreme Court
judges ruled in direct opposition to their own Oncomouse Decision (http://www.lexum.umontreal.ca/csc-scc/en/pub/2002/vol4/html/2002scr4_0045.ht
ml ). The 2002 Supreme Court Oncomouse Decision reaffirmed the 1982 Abitibi
(Patent Appeal Board) ruling that higher life forms cannot be patented in
Canada. Specifically, the Dec 2002 Supreme Court Decision states:

"Held (McLachlin C.J. and Major, Binnie and Arbour JJ. dissenting): The
appeal should be allowed. A higher life form is not patentable because it is
not a "manufacture" or "composition of matter" within the meaning of
"invention" in s. 2 of the Patent Act."

Now, 18 months later, five of the nine justices ruled that higher life forms
containing a single patented gene are effectively the property of the owner
of the single patented gene. The distinction between this position and the
rejected argument of Harvard University in seeking to patent higher life
forms in the Oncomouse case is difficult to discern.

How the gene got into the higher life form - in this case a canola plant -
was irrelevant to the Supreme Court. The simple presence of one patented
gene conferred ownership over the entire plant. The disinclination of the
Supreme Court to consider the 'how' issue generated a range of pragmatic
agronomic incongruities, some of which are discussed below.

In sharp contrast, the dissenting four Supreme Court judges concurred with
the tightly reasoned argument laid out by Zakreski. The actual Canadian
patent which protects Monsanto's RR gene explicitly limits the protection to
the gene and the cell containing it - not to the whole plant or seed. In
contrast, the US patent for the same RR gene extends to the whole plant,
consistent with the Diamond v Chakrabarty Decision of 1980 by which the US
Supreme Court allowed the patenting of higher life forms in the US (http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=447&invol=303
<http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&amp;vol=447&amp;i
nvol=303> ):

Held: A live, human-made micro-organism is patentable subject matter under
101. Respondent's micro-organism constitutes a "manufacture" or "composition
of matter" within that statute. Pp. 308-318.

The actual Canadian patent has 51 claims, all of which are limited
specifically to the gene, the processes relating to making the gene, and the
cells of various crop species, including canola. Indeed, by not including
whole plants, the judges argued that Monsanto had specifically disclaimed
whole plants in their patent, as indeed, they had to because patenting of
higher organisms is disallowed in Canada.

As a result, in their strongly worded dissent, 4 of the 9 judges in the
Schmeiser v. Monsanto case affirmed the unpatentability of higher organisms,
as per their own Oncomouse Decision in 2002. They concluded that a
reasonable and knowledgeable person could not expect patent protection to be
"extended to unpatentable plants and their offspring". The four dissenting
judges agreed that Schmeiser did not use the invention as construed in the
claims' - e.g. he did nothing to the process, the gene, or the cells of
plants, and hence, did not "...deprive the patentee of his monopoly over the
use of the invention as construed in the claims."

In effect, they agreed that the patent which had been approved under the
Patent Act was intended to safeguard intellectual property prior to
commercialization - only. Because Monsanto had specifically disclaimed
plants in their patent, Schmeiser did not infringe upon Monsanto's patent
when he saved his contaminated seed for re-use the following year.

What are the Downstream Implications for Monsanto?

What will Monsanto be able to do now, that it couldn¹t or didn't do before?
Not much.

1. Intellectual Property. Monsanto has consistently played by their own
rules, although their interpretation of the Patent Act has now been
legitimized by 5 of 9 Supreme Court justices. Monsanto has chosen to take
action against Canadian farmers based on whole plant contamination, despite
specifically disclaiming this intent in their actual Canadian patent. Now
they can continue to do this legally.

Monsanto justifies this behavior as essential to protect their intellectual
property. That must be a revelation to the other two companies which market
herbicide tolerant canola in Canada, neither of which employs the Patent Act
to protect their intellectual property nor feels compelled to prosecute
farmers whose fields are inadvertently contaminated with their patented
genes.

a. Bayer (formerly Aventis) protects its Liberty Link canola (tolerant to
glufosinate ammonium) by placing the herbicide tolerant gene in hybrid
canola. Because hybrids segregate non-uniformly, farmers have no incentive
to save the seed of a hybrid canola crop, any more than they would save the
progeny of hybrid corn. And of course, unlike Monsanto's Roundup, for which
the patent has expired, Bayer's Liberty is still protected under patent. It
is the sale of the herbicide which is the real cash cow for those marketing
herbicide tolerant crops.

b. The other player in Canadian herbicide tolerant canola is Pioneer, which
protects its mutagenized Clearfield cultivars (tolerant to imidazolinone)
with the Plant Breeders Rights Act - just as it was intended to be used.

Monsanto's claim that the Supreme Court Decision will somehow open the
floodgate on investment in GM technology in Canada asks the public to
believe that uncertainty about patent protection is a disincentive to
industry investment in Gm in Canada. This claim appears to be at variance
with the experience of Bayer and Pioneer, who have managed to work within
the existing rules.

It is equally inconsistent with the growing societal rejection of GM crops
around the globe, including countries which allow patenting of higher life
forms. Examples of societal rejection of GM crops as an unwanted and
unwelcome intrusion into the food system - all of which occurred just in the
first months of 2004 - include:

* the withdrawal of GM sugar beet by both Monsanto and Syngenta in the EU;
GM sugar beet as well as GM canola were found to be more environmental
damaging than non-GM cultivars in the multi-year, multi-farm Field Scale
Evaluation (FSE) trials published in the Philosophical Transactions B of the
Royal Society (16 October 2003)

* the withdrawal of GM maize by Bayer in the UK this spring; although GM
maize was the only crop found in the FSE trials to be less harmful than the
atrazine-based non-GM maize system, the regulatory protocols in place for
growing GM maize were found to be too onerous to permit commercialization

* the March 2004 passage of 'Measure H' by the citizens of Mendocino County,
California to ban the growing of GM crops in the county. (http://www.foodfirst.org/media/press/2004/2004-03-03-mendocino.html )

* the unanimous (78-0) March 2004 vote by the Vermont senate to pass the
Farmer Protection Act, under which biotech companies will be held liable for
contamination of crops with GM traits (http://www.organicconsumers.org/ge/vtlaw031104.cfm )

* the April 2004 signing of the Farmer's Right-to-Know Seed Labeling Bill
(H-777) by the governor of Vermont, which defines GM seed as different from
conventional seeds in the state of Vermont seed statute, and requires
labeling of all GM seeds sold in the state.

* the April 2004 decision by Spain - the only EU country allowing commercial
production of GM crops - to withdraw approval for Syngenta¹s Bt176 maize,
owing to concerns about transmission of antibiotic resistance (http://quote.bloomberg.com/apps/news?pid=10000085&sid=aTHzBgQCkUvs&refer=eur
ope
<http://quote.bloomberg.com/apps/news?pid=10000085&amp;sid=aTHzBgQCkUvs&amp;
refer=europe> )

* the April 2004 decision by President Chavez of Venezuela to ban GM soy

* the April 2004 decision of the California Department of Food and
Agriculture (CDFA) to reject the application of Ventria BioSciences to grow
pharmaceutical GM rice in California (Winnick, 2004)

* the 27 May 2004 introduction of a bill in Ohio designed to ensure the
right to save seed and reduce production costs while compensating companies
for reuse of the seed

* the May 2004 decision of Monsanto to withdraw from commercializing RR
wheat in Canada and the US (Unger, 2004; see also
http://www.monsanto.ca/news/news-display.shtml?pfl=news-display-single.param
&op2.rf1=23
<http://www.monsanto.ca/news/news-display.shtml?pfl=news-display-single.para
m&amp;op2.rf1=23> ) although the application is still pending at the CFIA

* the May 2004 withdrawal of Monsanto from GM canola trials in Australia
(Marino, 2004), following decisions by 4 of 7 Australian states - Western
Australia, Victoria, New South Wales, and Tasmania - to ban or restrict
commercial GM canola trials for 1 or more years

* the June 2004 withdrawal of Bayer from GM canola trials in Australia (ABC,
2004)
Given mounting societal opposition, the impact of the Supreme Court of
Canada's Decision in the Schmeiser v. Monsanto case on GM crop investment in
Canada remains to be seen.

2. Marketing Strategy. Employing the Patent Act rather than the Plant
Breeders Rights Act was arguably more effective at enabling intimidation to
expand market share than in protecting intellectual property. Because canola
pollen and seed are uncontainable, the unintentional arrival of patented
genes is a virtual certainty for every Western Canadian farmer. Because
farmers as well as Monsanto know this, Monsanto could plausibly threaten
legal and financial claims against virtually any farmer for 'infringement¹
simply because virtually every piece of land is likely to be the unwitting
host for patented gene-bearing seed and plants.

However, by determining that Monsanto was owed none of the value of
Schmeiser's crop, the Supreme Court removed or at least rendered shaky, this
pivotal leg from the Monsanto marketing platform. Thus, a farmer who
inadvertently infringes on Monsanto's patent may no longer need to fear
losing their crop, home, and farm.

What are the Implications for Farmer/Growers, Heritage Seedsavers, etc?

1. What about the rights of private land owners? What if the plant that
happens to become infected with a patented gene is on land owned by someone
under no contractual obligation to Monsanto? Does ownership of a patented,
uncontainable gene take precedence over ownership of land? Apparently so.
The uncontainability of the gene was seen as an irrelevancy to 5 of the 9
judges, which leads to a related question.

2. What about externalized costs? Why should someone under no contractual
obligation to Monsanto be obliged to absorb 100% of the cost and
responsibility for mitigating against uncontainable patented genes? By
declining to consider the issue of containability, the 5 of 9 judges
effectively forced everyone who does not sign a Monsanto TUA to accept legal
responsibility for identifying contaminants and reporting them to Monsanto.
Failure to do so incurs liability, just as it did for Schmeiser. Recall that
he was not found guilty of theft - only of saving and regrowing seed he knew
to be contaminated instead of calling Monsanto to come and fetch it. How he
- as a seedsaver - was expected to do this in back-to-back canola was not
specified in the judgement.

The fairness of externalizing costs to everyone else, to allow Monsanto to
maintain some vestige of control over an uncontainable technology, is
unclear.

Carrying this Decision to its logical conclusion will require every
grower/farmer/rancher to make multiple annual reports, not simply to
Monsanto, but to every proprietor of a patented gene. Why ranchers or
vegetable growers? If the 5 of 9 judges considered that Schmeiser deprived
Monsanto of its monopoly - infringed - simply by the presence of a patented
gene, even if he didn¹t engage the utility of the patented gene, then might
this not apply to everyone, whether or not they grow canola? By the same
reasoning, although this case dealt with a Roundup Ready gene, presumably
the same intellectual property protection would be equally applicable to a
gene for oil quality or disease resistance, and for every company - not just
Monsanto?

Perhaps the most prudent form of self-protection would be for every
grower/farmer/rancher in western Canada to make a point of sending a form
letter to every proprietor of a patented canola gene on an annual basis,
informing them of the possibility that their gene(s) was present on their
land and asking them to come and remove it. A particular day could be
designated as the annual Avoid Patent Infringement Day - perhaps 1 April.
Advertisements in the farm and market gardening press could remind everyone
to send in their letters by registered mail, to ensure that they were
protected against charges of knowing infringement, given that everyone will
know of the likelihood for at least some errant seed on their land.

3. What about seedsavers? What about the tens of thousands of genes in a
canola plant that are not "owned"and forcibly inserted into the genome but
were instead selected through conventional plant breeding, including the
traditional work of generations of farmer/seedsavers? Does one patented gene
trump centuries of work by all of these public as well as private breeders -
globally? Does one patented gene confer ownership over everyone elses'
'public good' work? Apparently so. This leads to subsidiary questions.

a. Does a single contamination event permanently contaminate self-saved
seed, making the seedsaver who grows out their own seed a permanent
infringer?

Apparently yes. The only way to resolve this liability is to destroy your
seed - all of it - because there is no way to distinguish contaminated from
uncontaminated seed without spraying Roundup, which would itself kill all
the uncontaminated seed. If carried to its logical conclusion, this Decision
means that you - and every other grower/farmer on the planet - would
eventually be obliged to destroy every seed (of crops which have been
genetically modified) that was not intentionally fitted with a patented
gene(s), to avoid charges of patent infringement. Recall that none of the
Decisions made in the Schmeiser case stipulated the degree of contamination
that was actionable. Is 25% too much? 1%? 0.1%?

But given the other half of this Supreme Court Decision, does this implied,
unavoidable, permanent liability really matter? If the same logic which the
Supreme Court applied to Schmeiser pertains to other farmers, then what can
Monsanto do if it finds its patented gene in your bag of seed or growing in
your heritage plant patch? By this logic, the simple growing and regrowing
of your contaminated seed - which is what Schmeiser did and which the Court
found to be infringement upon Monsanto's monopoly - would not oblige you to
pay Monsanto anything, presuming of course that you are not benefitting from
the RR gene by spraying Roundup. What would Monsanto have to gain by hauling
you into court, as they did Schmeiser, simply to incur legal fees which
Monsanto would have to pay themselves, without the expectation of extracting
unwarranted TUA, crop value, or punitive costs?

So, does this Decision threaten seedsavers and seedsaving? Perhaps not. The
determination that Monsanto was owed no fraction of the value of Schmeiser¹s
crop may, in fact, be an effective countervail to the technical finding of
patent infringement.

b. Who 'owns' a plant that contains more than one inadvertent patented gene?
Such plants are already in existence now, and could become increasingly
common if agricultural biotechnology actually does deliver other GM traits.
Friesen et al. (2003) at the University of Manitoba compared 33 seed lots of
certified canola seed for contamination with one or more of the three
commercially available herbicide-resistance genes (glyphosate- and
glufosinate-resistance, as well as non-GM imidazolinone-resistance (IR)). Of
the 33, 18 seedlots were supposed to be non-herbicide tolerant, 8 were
glufosinate-resistant, and 7 were IR seed lots. No glyphosate-resistant
cultivars were sampled, because farmers are contractually prevented from
providing seed to third parties for any reason, including research. They
found that 7 of 33 seedlots (21%) contained individual seeds bearing both
glyphosate- and glufosinate-resistance (the same plants survived both
sprays), of which 3 seedlots exceeded the 0.25% standard of purity for
certified canola seed. And keep in mind, these are certified seed lots, from
certified seed growers, who are specialists at maintaining genetic
integrity. So - who owns the doubly-contaminated seed? This degree of
already existing dual-contamination raises questions about the practical
workability of the Supreme Court Decision in an era with multiple patented
genes travelling uncontainably across the continent.

4. What about contaminated certified seed? The same paper by Friesen et al.
(2003) determined that 42% of the 33 tested seedlots of certified canola
were in fact contaminated above the allowed 0.25% threshold for same-crop
contamination in certified canola. Recognizing that it is impossible to
wholly segregate GM from non-GM seed, companies routinely put a disclaimer
on every sack of non-GM seed of a genetically modified crop, such as that
which has been on Pioneer Hi-Bred non-GM soybeans since at least 2000 (
http://www.nelsonfarm.net/validation.htm ):

Should you worry about such a little bit of contamination? Van Acker et al.
(2003) estimated that seeding certified canola seed at the upper limit of
allowable same crop contamination (0.25%) could result in 1 herbicide
tolerant volunteer canola plant per 1.3 m2 (7700 plants ha-1) the following
year, given reasonable assumptions of yield and shattering losses. For
pictures of just such a situation, see
http://www.percyschmeiser.com/contamination.htm . If you plant back-to-back
like Schmeiser, then those volunteers will be indistinguishable from your
sown canola plants. If you are a seedsaver like Schmeiser, the contaminated
progeny seed will go into the bin along with everything else, making you an
infringer when you plant them out again.

So, who is liable when GM seed arrives as a contaminant in a sack of non-GM
seed? The disinclination of the Supreme Court judges to acknowledge the
implications of the uncontainability of patented canola genes means that you
are liable, just like Schmeiser. According to this Decision, it would not
matter if the GM seed arrived as an inadvertent contaminant in a sack of
non-GM seed, or through wind-swept windrows from a neighbor or through
pollen transfer.

Conclusions

So, what, in the end, did Monsanto actually 'win'? And did their win
outweigh their losses in this pivotal case?

They won legal authorization, by 5 of 9 Supreme Court justices, for doing
what they were already doing with their elasto-patent. The 5 agreed that
plants containing their patented gene were theirs, regardless of where they
were found or how they got there. OK. So what does this let Monsanto do that
they weren't doing already? Arguably, not much.

What did they lose? Arguably, quite a lot. Quite apart from losing their own
accumulated court costs as well as the value of Schmeiser's 1997 crop, their
ability to threaten financial reprisals to inadvertent infringers was lost
or greatly weakened. Hopefully, the arrival of Monsanto's investigators on
the doorstep of guiltless farmers will soon be a thing of the past.

But of greater long term importance, Monsanto's behavior toward Schmeiser
and hundreds of other farmers has now been exposed to the world. The Amnesty
International approach of 'the world is watching' is a powerful deterrent to
abuse of power, whether in prisons or on isolated farms. Through countless
speeches, in unnumbered countries, over the past 7 years, Schmeiser
informed, mobilized, and integrated an ever widening circle of people - who
are going to have to pay the downstream costs of GM technology - into this
unfolding story. Everyone from environmentalists, scientists, and
homemakers, to elevator operators, religious groups, grocery chain
operators, food processors, and policymakers has now been awakened to the
implications of farming as envisioned by Monsanto. Externalized effects on
non-adopting farmers, on seedsavers, on the integrity of heirloom varieties,
on narrowing crop biodiversity, and on property rights have now been exposed
for all to see, to debate, and to act upon.

By broadening the impacted and engaged community, the Schmeisers have
effectively shifted the balance of power between Monsanto and farmers, to
the great and lasting benefit of farmers.

ABC (Australian Broadcasting Corporation) 2004. Monsanto withdraws from GM
canola trials in Australia.
http://www.abc.net.au/rural/news/stories/s1107529.htm

Friesen, L.F., A.G. Nelson, and R. C. Van Acker. 2003. Evidence of
contamination of pedigreed canola (Brassica napus) seedlots in western
Canada with genetically engineered herbicide resistance traits. Agron. J.
95:1342-1347

Kinzel, B. 2004. Vermont governor signs GMO bill into law.
http://www.publicbroadcasting.net/vpr/news.newsmain?action=article&ARTICLE_I
D=629248
<http://www.publicbroadcasting.net/vpr/news.newsmain?action=article&amp;ARTI
CLE_ID=629248>

Marino, M. 2004 Monsanto halts GM canola trials.
http://www.theage.com.au/articles/2004/05/12/1084289748081.html?oneclick=true

Unger, E. 2004. Monsanto pulls RR wheat plans.
http://www.biomedcentral.com/news/20040512/01

Van Acker, R.C., A.L. Brule-Babel, and L.F. Friesen. 2003. An Environmental
Safety Assessment of Roundup Ready Wheat: Risks for Direct Seeding Systems
in Western Canada. Report for the Canadian Wheat Board, Winnipeg, MB.
http://www.worc.org/pdfs/WheatCWBEnviroReportJune2003.pdf
<http://www.worc.org/pdfs/WheatCWBEnviroReportJune2003.pdf>

Winnick, E. 2004. No go on GM pharm rice crops.
http://www.biomedcentral.com/news/20040415/02/

-end-
This paper was presented to members of the National Farmers Union,
Milverton, Ontario on June 10, 2004. ©2004 E. Ann Clark. CropChoice is
publishing this piece with Professor Clark's permission.