By Lawrence Hoffman
There’s good news and bad news. The good news is that as of 1 July 2017, the EPO lifted its suspension of examination of applications which depend entirely on the patentability of a plant or animal obtained by an essentially biological process.
The bad news is that these applications will likely be rejected and that it will take some years and at least one Enlarged Board of Appeals decision or some outside intervention before the patentability of such inventions becomes clear.
And even if such applications are allowed and survive opposition because they are not produced by essentially biological processes, there’s a good chance they won’t be enforceable in several EU countries.
The Historical Perspective:
Patent eligibility for plant-related inventions is based on Art. 53(b) of the European Patent Convention which states:
European patents shall not be granted in respect of:
. . . (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision shall not apply to microbiological processes or the products thereof;
Virtually every part of this provision has engendered controversy. For example, what is the scope of “plant or animal varieties”? Clearly, certain processes are excluded, but what kinds of processes are “essentially biological”? And given the reference to products of microbiological products, are the products of essentially biological processes patent eligible?
These questions were largely answered in a pair of Enlarged Board decisions in 2010 and 2015 involving consolidated appeals from oppositions against two patents.
The Patents in Question:
One of the patents concerned broccoli plants containing increased quantities of a certain anti-carcinogenic compound (“the Broccoli Case” or “broccoli patent”). The claims in the patent as granted were directed to a method for producing the plants, to an edible plant, to a broccoli floret, and to a broccoli plant cell produced according to the claimed method. At the Opposition Division level, all the claims in somewhat modified form were all found to meet the requirements of Art. 53(b). The opposers appealed to the Technical Board of Appeals.
The other patent concerned tomato plants bearing fruit having decreased water content. This allowed the tomatoes to remain on the vines beyond the point of ripeness and achieve wrinkled skin without spoilage. The patent as granted contained claims directed a method for breeding the plants, to a tomato fruit characterized by a capability of natural dehydration while on a tomato plant, and to a tomato fruit characterized by an untreated skin which permits dehydration of the fruit. In the opposition, the method claims were held to be excluded under Art. 53(b), but the tomato fruit claims were sustained. The patent owner appealed the decision invalidating the method claims.
The Appellate Decisions:
A bit of procedural perspective, appeals from EPO decisions on patentability and oppositions are heard by Technical Boards of Appeals composed of individuals experienced in the subject matter involved. To ensure uniform application of the law, or if an important point of law arises, a Technical Board or the EPO President can refer a question to the Enlarged Board of Appeal.
In 2007, a Technical Board referred the Broccoli Case to the Enlarged Board and in 2008, it referred the Tomato Case. In both cases, the Technical Board asked the Enlarged Board to decide if a process which contains the steps of crossing and selecting plants can avoid the exclusion of Article 53(b) EPC if it also contains an additional feature of a technical nature. If this was not enough to avoid the exclusion, it asked what the relevant criteria are for determining what processes are excluded under Article 53(b). In regard to the second issue, it particularly asked if it is “. . . relevant where the essence of the claimed invention lies and/or whether the additional feature of a technical nature contributes something to the claimed invention beyond a trivial level”.
The 2010 Decision:
The 2010 opinion of the Enlarged Board is lengthy (71 pages) and complex. It includes a comprehensive review of legislative history, a well-reasoned analysis, and by which the Enlarged Board ruled that process claims which recite crossing and selection for desired characteristics are not patent eligible, and that merely adding a step of a technical nature that enables or assists the crossing and/or selecting does not help.
However, if a claim also recites a technical step which results in a new trait in the genome or modifies an existing trait that is not the result of the mixing of the genes of the crossed plants, the process is not excluded under Article 53(b) EPC.
Finally, in determining if a process is “essentially biological” within the meaning of Article 53(b) EPC and therefore not patent eligible, it does not matter whether a technical step is new or whether it is trivial or a fundamental alteration of a known process, or whether it does or could occur in nature.
Reconsideration by the Technical Board after the 2010 Decision:
Based on the 2010 decision of the Enlarged Board, when the two cases were reconsidered by the Technical Board, the method claims were deleted from the tomato patent and new claims were substituted into the broccoli patent by the respective patentees. The new claims in the broccoli patent were directed to a broccoli plant, an edible portion, and the seed of a broccoli plan produced by the previously claimed method. Also added were claims directed to a broccoli plant per se, and to florets characterized by the increased level of the anti-carcinogenic compounds.
But now there was a new legal problem: whether plant parts or products produced by processes that were not patent eligible under Art. 53(b) were also excluded. This was of concern because use of a plant part or fruit covered by a product-by-process claim or by a broad product claim might effectively allow the patentee to protect the ineligible process indirectly.
The eligibility of plants and plant parts was not addressed by the Enlarged Board in its 2010 decision. Consequently, there were new referrals to the Enlarged Board in both the Broccoli Case and the Tomato Case.
The Second Referral to the Enlarged Board:
Briefly summarized, the Technical Board requested the Enlarged Board to decide if the process exclusion of Article 53(b) also applies to a product claim directed to plants or plant parts. In particular, it asked if the Art. 53(b) exclusion applies to a product-by-process claim that recites an excluded process and/or to a conventional product claim for which the only method available at the filing date for generating the claimed subject-matter is an excluded process.
In addition, if such product claims are excluded because they indirectly protect the excluded process, The Technical Board asked if it would be possible to avoid the exclusion by “disclaiming” the excluded process.
The 2015 Enlarged Board Decision:
In the analysis underlying the 2015 decision, the Enlarged Board noted that the referred questions only concerned the impact of the process exclusion in Art. 53(b) on the patentability of product claims and product-by-process claims. The questions did not relate to the interpretation of Art. 53(b) in respect of the exclusion from patentability of plant or animal varieties. The most relevant prior decisions did not answer the referred questions because they all involved consideration of issues related to plant varieties.
The Board therefore proceeded with “a methodical interpretation of Article 53(b) EPC in respect of, primarily, its wording and, secondarily, considering also the legislator’s intention and the aspects of systematic and historical interpretation”.
The resulting analysis is of considerable interest to practitioners and others seeking to predict future developments. Nevertheless, it is complex and detailed and beyond the scope of this discussion. We will therefore simply summarize the resulting Order, and proceed to the subsequent developments which it triggered.
In summary, the 2015 Order states that (a) the process exclusion of Art. 53(b) does not apply to a product claim directed to plants or plant material such as plant parts. (b) This is so even if the process features of a product-by-process claim directed to plants or plant material are excluded as “an essentially biological process”. (c) Therefore, it is of no relevance that the protection conferred by the product claim encompasses a process excluded as such under Art. 53(b). (d) The Art. 53(b) exclusion does not apply to a conventional product claim even if the only method available at the filing date for generating the claimed subject-matter is an excluded essentially biological process.
Given points (a) through (d), the question of disclaimer did not apply.
What Happened Next:
In understanding what happened as a result of the 2015 Order, the global opposition patentability of plants and plant material produced by conventional methods, which has been characterized as “relentless” must be kept in mind. The Order, on its face, is obviously and decisively pro-patent and overall, favorable to innovative plant breeders and agrochemical companies. Some commentators have also suggested that, as biotechnology continues to evolve, expanded patentability for genetically modified organisms and techniques of synthetic biology might expand.
Be that as it may, the usual anti-patent forces generally and those opposed to plant patents in particular (including the European Seed Association, the European coalition No Patents on Seeds!, farmer groups, those opposed in principle to genetically modified plants, etc.) reacted to the 2015 decision with dismay and even fury.
The major reasons given in opposition to and in support of the 2015 decision are easy to articulate. The opponents argue that granting such patents will accelerate the already significant monopolization of seed and food production and stifle innovation.
The supporters argue that effective protection is needed to justify the purportedly enormous investments needed to support innovation in the agricultural field.
To this observer, the arguments of the opponents are not persuasive. Setting aside the question patentability of plants as a matter of principle, the real problem is not market dominance, but the risk that market dominance will lead to practical anticompetitive effects or socially unacceptable results such as suppression of innovation.
These are not patent issues. Rather, they are related to policy objectives. For the EU, these include sustainable development based on balanced economic growth and social justice, a social market economy – highly competitive and aiming at full employment and social progress, and a free single market.
Realistically, market dominance may be inevitable in a free-market economy and certainly there will be instances of anticompetitive or otherwise antisocial behavior. But these are readily dealt with by laws that limit that behavior, even to the extent that limits are placed on the use of patents without barring patentability.
Even the fear that plant patents might hinder innovation can be dealt with by laws that define use of patented plants or plant materials as starting materials for research purposes as not being acts of patent infringement or by requiring that plant patent owners license their patents for such purposes.
While the major supporters of plant patents are the large agribusiness, and that large R&D expenditures are best protected by strong patents, are not necessary the only ones who stand to benefit from a strong patent system. Even in the agricultural field, there are many examples of success by startups and smaller innovators which have received funding. The possibility of effective patent protection is notably a factor in the availability of venture capital.
On balance, then, the 2015 decision appears to be correct as a matter of policy and practicality.
Be that as it may, political and other pressures were applied, and as of November 2016, at least Austria, Germany, the Netherlands and France had amended their national patent laws to prohibit patents covering plants and animals derived from “essentially biological” breeding, effectively nullifying the 2015 Enlarged Board decision for European patents validated in those countries.
In passing, it may be noted that such exclusions are consistent with Article 27(3)(b) of the TRIPS agreement which explicitly allows member states to exclude plants and essentially biological processes for the production of plants from patentability. Countries outside of Europe including China and India, have also taken advantage of this possibility. The U.S., Patent and Trademark Office, in contrast, takes a very liberal approach and regularly grants patents for plants.
The Newest Developments:
As a result of lobbying (or if you prefer, entreaties) at the EU level, in December 2015, the European Parliament requested the European Commission (the executive branch of the EU) to consider the patentability of products derived from essentially biological processes. On 3 November 2016, the Commission issued a notice interpreting certain articles of the Biotech Directive of the European Parliament in a manner expressly contrary to the 2015 Enlarged Board decision. Specifically, the Commission asserted that, in its view, it was the intent of the Biotech Directive that plants and animals obtained by means of essentially biological processes not be patent eligible.
In a submission to the Enlarged Board in connection with the second referral, the President of the EPO had supported the positions of the patent owners with respect to product claims. Nevertheless, in view of the potential impact of the Commission Notice, on 24 November 2016, the President of the EPO suspended all proceedings before EPO examining and opposition divisions in which the decision would depend entirely on the patentability of a plant or animal obtained by an essentially biological process.
It should be kept in mind that European patents are governed by the national laws of the countries in which the patents are validated. However, the EPC and the EU are not legally connected and the EPO is not an EU administrative body. Indeed, while all EU member states are adherents to the EPC, there are also non-EU states that are also EPC adherents. Likewise, it is the EPC as interpreted by the Enlarged Board and not EU law that governs practice in the EPO.
That having been said, the EPO Administrative Council (“the Council”) has adopted parts of EU law into its Rules of Practice, and in particular, it has incorporated the Biotech Directive into its rules. Faced with the conflict between the 2015 Board decision and the November 2016 Commission Notice, the Council adopted a new Rule 28(2), effective 1 July 2017, which states “Under Article 53(b), European patents shall not be granted in respect of plants or animals exclusively obtained by means of an essentially biological process”.
The suspension of proceedings has been terminated, but the EPO has placed itself in direct conflict with the Enlarged Board’s interpretation of the law (i.e., Art. 53(b) of the EPC) which governs its practice.
A Look Towards the Future:
So what will happen now? According to EPC Article 164(2), in case of conflict between the provisions of the Convention and those of the Implementing Regulations, the provisions of the Convention shall prevail. Nevertheless, it must be assumed that examination of applications and oppositions will proceed according to the new rule, with the inevitable result of more appeals to the Technical Board and more referrals to the Enlarged Board. Realistically, absent intervention by some higher authority, it will be years before the effect of the new rule will be clarified.
Such intervention is a real possibility. One avenue is an EU Directive implementing the Commission’s interpretation of the Biotech Directive. As a result, all EU members would be required to refuse patent protection for plants and plant parts derived from essentially biological processes. That would not apply to non-EU states presumably including the UK, but there would be nothing to prevent such states from adopting similar prohibitions.
Note that such a Directive would need to define clearly what is meant by an essentially biological process to assure EU wide uniformity. The definition in the 2010 decision of the Enlarged Board seems like a good definition, or at least a good starting point.
Another possible intervention might come from a referral by a national court or other tribunal of an EU members-state to the Court of Justice of the European Union (CJEU) for an interpretation of the Biotech Directive. Such a referral by an EPO Board of Appeal would not be possible under the EPC, nor would the EPO be bound by a decision of the CJEU Nevertheless, enactment of Rule 28(2) and incorporation of the provisions of the Biotech Directive into the Rules certainly suggests that a CJEU ruling would be accorded considerable deference, if not literally followed.
Yet another possible intervention might come from the Unified Patent Court once the Unitary Patent System comes into effect. According to Article 24 (1) (c) of the Agreement on a Unified Patent Court, one source of law for procedures before that Court shall be the European Patent Convention.
The Unitary Patent System will become operational upon ratification by the UK and Germany. The ratification process is proceeding in the UK but has been delayed in Germany by a request by the German constitutional that ratification be delayed pending investigation of a constitutional challenge. (There has been no disclosure source or basis for this challenge.)
In short, despite the clear ruling in the 2015 decision, the EPO will resume examination of applications directed to plants and plant materials and will allow oppositions to proceed, but for the present, patents will not granted for plants and plant materials produced by essentially biological processes as defined in the 2010 Enlarged Board decision. Thus the opponents of such patents appear to have won a battle in the longstanding war, but the war is far from over.