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Canada Rules in Favor of Monsanto over Seed Saving Farmer Percy Schmeiser

Monsanto Wins Key Biotech Ruling

Globe and Mail Update (Canada)

May. 21, 2004

The Supreme Court of Canada made biotechnology history Friday with a 5-4 ruling that a Saskatchewan farmer violated a patent Monsanto Canada Inc. held on genes of genetically engineered canola seeds.

The ruling is considered to have global importance to the biotechology industry, farmers, health care and any other field where genetic engineering has made inroads. With the ruling, Canada follows the U.S. Supreme Court in deciding on patent issues involving plants and seed genes.

At the centre of the litigation was a gene that Monsanto invented, patented and introduced into canola. Created in 1996 and known as Roundup Ready, it makes canola plants resistant to a common weed-control herbicide that the company markets under the name of Roundup. Its progeny are equally resistant.

The litigation commenced in 1997, when Monsanto found its genetically engineered canola plant growing on Percy Schmeiser's farm. Mr. Schmeiser contended that since a plant is a higher life form and cannot be patented, he had done nothing wrong.

Monsanto did not claim protection for the genetically modified plant itself, but rather for the genes and the modified cells it is composed of.

"The appellants actively cultivated Roundup Ready Canola as part of their business operations," a majority led by Chief Justice Beverley McLachlin and Mr. Justice Morris Fish concluded. "In light of all of the relevant considerations, the appellants used the patented genes and cells, and infringement is established.

"By cultivating a plant containing the patented gene and composed of the patented cells without licence, the appellants deprived the respondents of the full enjoyment of the monopoly," they said, writing on behalf of Mr. Justice Ian Binnie, Mr. Justice Jack Major and Madam Justice Marie Deschamps. "The appellants' involvement with the disputed canola was also clearly commercial in nature."

Mr. Schmeiser saved the seed and reused it "for production and advantage," the majority noted. "Whether or not patent protection for the gene and the cell extends to activities involving the plant is not relevant to the patent's validity."

The other judges, however, dissented in part, saying the majority were being inconsistent with a recent Supreme Court ruling that higher life forms ‹ which include seeds ‹ cannot be patented. That case involving a genetically engineered laboratory animal known as the Harvard mouse.

Led by Madam Justice Louise Arbour, the dissenting faction said a reasonable observer would conclude that "gene claims and the plant-cell claims should not be construed to grant exclusive rights over the plant and all of its offspring.

"Mr. Schmeiser was entitled to conclude that since plants cannot be patented, they fell outside the scope of patent protection," they said. "Accordingly, the cultivation of plants containing the patented gene and cell does not constitute an infringement. The plants containing the patented gene can have no stand-by value. To conclude otherwise would, in effect, confer patent protection on the plant."

Mr. Schmeiser, 74, cast himself as a farmer of the old school who habitually used seeds from previous crops to plant new canola. No fan of chemical herbicides, Mr. Schmeiser used Roundup sparingly in 1997 to eliminate weeds around some power poles and ditches.

He has steadfastly insisted that the seed somehow blew onto his fields from passing trucks or from neighbouring farms, which had paid Monsanto Canada Inc. the licensing fee of $15 an acre to use it.

He said he was astonished to discover that a great deal of the canola in those areas survived his spraying, suggesting that had somehow acquired a resistance to the herbicide. He used portions of the seed from those areas for his crop the following year.

With the aid of environmentalists, he quickly acquired the image of a little guy taking on a greedy corporate conglomerate.

Although Monsanto disputed Mr. Schmeiser's version of events, the company's main contention was simply that Mr. Schmeiser reaped and reused the herbicide-resistant seed without authorization.

Approximately 20,000 farmers now plant Roundup Ready canola, representing 40 per cent of the Canadian canola crop.

Mr. Schmeiser lost the first round on March 29, 2001. Mr. Justice Andrew MacKay of the Federal Court of Canada ruled that Mr. Schmeiser "knew or ought to have known" his 1998 seed was resistant to Roundup. He said it was more likely that he planted the seed himself than that he came by it innocently.

The Canadian Canola Growers Association, one of a dozen intervenors in the case, warned when the case was argued in the Supreme Court that an overly restrictive court ruling could harm Canadians interests.

Such a ruling, it said, would make Canada "the only significant canola exporter to refuse to patent plants and plant material, which would drive away technology developers and leave Canadian growers without access to technological advances in new varieties."

In assessing damages after the original trial, Judge MacKay noted that tests revealed that 1,030 acres of the canola on the farm were more than 95 per cent resistant to the herbicide. He awarded Monsanto the equivalent of Mr. Schmeiser's profits on his 1998 canola crop ‹ $19,832 ‹ as well as legal costs estimated at $153,000.

The Federal Court of Appeal upheld the ruling in 2002. In an unexpected twist on Friday, however, the Supreme Court reduced the damages to zero and said each side must bear its own costs.

It said that Mr. Schmeiser profits "were precisely what they would have been had they planted and harvested ordinary canola."

Since there was no evidence that he sprayed Roundup herbicide to reduce the weeks, the majority said, there is no way to conclude that he gained any financial advantage. "On this evidence, the appellants earned no profit from the invention and the respondents are entitled to nothing on their claim of account."
WINNIPEG.CBC.CA   News   -   Full   Story :
Schmeiser loses Monsanto battle
May 21 2004

WINNIPEG -The Supreme Court of Canada has sided with the U.S. biotechnology giant Monsanto in the firm's patent fight against Saskatchewan farmer Percy Schmeiser.

In what is thought to be the first ruling of its kind anywhere in the world, the court ruled in a 5-4 decision that Monsanto can hold a patent on its genetically modified canola plant.

Monsanto inserts a gene into a canola plant to make it pesticide-resistant. The company holds patents over the gene and the insertion process, and argued the patent should extend to control of the plant.

The company alleged Saskatchewan farmer Percy Schmeiser grew the patented canola seeds without paying for them, therefore infringing on the company's patent.

Schmeiser argued the canola seed blew onto his property from a nearby farmer's truck without his knowledge. He has said the plants "polluted" his fields.

In a small victory for Schmeiser, the Supreme Court ruled he does not have to pay the $19,000 he made off his 1998 crop harvest to Monsanto.

Schmeiser had already lost his case in lower courts.

In 2002, the Federal Court of Appeal upheld an earlier ruling that found Schmeiser guilty of illegally planting the Monsanto canola on his property. He was ordered to pay $175,000 in damages, plus court costs.

In 2003, the government of Ontario intervened in Schmeiser's Supreme Court case, saying it has "important implications for the development of public policy in Ontario including the delivery of health care to its residents." Ontario argued a gene molecule can be patented, but not the genetic information within the molecule.

The Supreme Court of Canada has already ruled against patenting a higher life form in the case of the Harvard mouse.