Agritechs impacted by breeding methods patent ruling

The decision issued by the Enlarged Board of Appeal at the European Patent Office (EBA) is contrary to previous decisions the EBA has issued on the patentability of conventional breeding processes.  That the EBA – the EPO's highest board of appeal – has reversed its previous approach is perhaps surprising, but is thought to be as a result of political pressure from farmers and breeders, who consider that patents on plants obtained from such methods will have a huge impact on their business operations.  However, the decision is likely to be viewed with some concern by businesses in the agritech sector who will be wondering how innovation in this field can be protected. 

Previous decisions and a change in the law

This latest case ruled on by the EBA regarding patentability of conventional breeding processes, known colloquially as the 'Pepper' case, relates to the interpretation of Article 53(b) of the European Patent Convention (EPC), which provides that European patents shall not be granted in respect of "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". 

In previous decisions in cases known as 'Broccoli II' and 'Tomatoes II', the EBA interpreted Article 53(b) of the EPC narrowly, as being a limited restriction on patentability for only three distinct items: plant varieties; animal varieties, and; those processes which are essentially biological processes for the production of plants or animals. As a result, products of these biological processes were found to fall outside of the scope of the exclusion and were, therefore, patentable. 

However, the decisions in Broccoli II and Tomato II led to disappointment amongst farmers and breeders, who viewed the decisions as putting unnecessary hurdles in the way of conventional breeding activities. 

The resulting political pressure led to a review of the EU Biotech Directive, which governs biotechnological innovations. This review concluded that the intention of the Biotech Directive was to exclude plant and animal products produced by essentially biological processes, not just the processes themselves, and led to the introduction of a new rule. Rule 28(2) of the Implementing Regulations to the EPC is controversial in itself, as it is considered by critics as a politically motivated amendment with the aim of limiting the scope of patentability in the agricultural field, as well as appearing to run contrary to the decisions in Broccoli II and Tomato II. It is this conflict that led to the referral to the EBA in the Pepper case.

The decision in the Pepper case

In light of the new rule 28(2), the EBA reversed its previous interpretation of Article 53(b) of the EPC and held that plant and animal products produced by essentially biological processes are not patentable. This interpretation will not have retrospective effect on European patents granted, or applications filed, before 1 July 2017 – this being the date on which rule 28(2) came into force.

While the departure from its earlier decisions may feel uncomfortable, the EBA indicated that in its view, the law in this area had since moved on and therefore required a "dynamic interpretation of Article 53(b)". It is an interesting turnaround by the EBA, which had previously said in Broccoli II and Tomato II, only two years prior to the adoption of Rule 28(2), that it could see no reason why the legislator's original intentions behind Article 53(b) of the EPC "would no longer be justified, just because today there are new techniques available in this sector". It has therefore, perhaps inevitably, led critics to speculate whether politics has influenced  the decision. 

In response, the EPO issued a statement, and justified the reversal on the grounds that "a particular interpretation which has been given to a legal provision can never be carved in stone, because the meaning of the provision can change or evolve over time". However, the narrowing effect of the decision on patentability in the agritech space will likely lead to greater reliance on other forms of protection for those operating in this area, such as plant variety rights.

Protection of rights in agritech and Brexit

Plant variety rights (PVR), also known as plant breeders' rights, are a form of intellectual property right similar to patents created specifically for the protection of new varieties of plants developed by plant breeders. A plant variety may be protected by a PVR if it can be demonstrated that it is new, distinct, uniform and stable.

From a UK perspective, the holder of a UK PVR has the right to prevent anyone else from doing in the UK certain acts including producing, selling, exporting or importing and stocking the protected variety without the holder's authority.

UK PVRs are valid in the UK for 25 years, except for trees, vines and potatoes where rights have effect for 30 years, subject to payment of annual renewal fees.

An alternative route to securing protection is through the Community plant variety right (CPVR).By applying to the Community Plant Variety Office (CPVO), breeders can receive a single intellectual property right valid throughout the EU for the same duration as that offered by the PVR . However, the creation of CPVRs is governed by EU law, and any pending CPVR applications that are not granted by the end of the Brexit transition period will not, as things stand, be automatically extended to cover the UK. Plant breeders that wish to obtain coverage in the UK will, at that time, need to make a separate application for a UK PVR.

However, obtaining a PVR is not without its hurdles, and may take a number of years due to a lengthy assessment process. They are also very narrow in scope, and only the specific variety is protected. Enforcement can be difficult if breeders make small changes to an existing variety to circumvent the protection offered by existing PVRs. In addition, two years after the grant of a CPVR, compulsory licences may be granted if the PVR holder has unreasonably refused to grant a licence or has imposed unreasonable terms. However, despite traditionally being seen as offering much weaker protection than patents, the ruling in the Pepper case could now spur an upsurge in PVR applications.

While the decision in the Pepper case is clearly important for the agricultural industry, and does appear to give some clarity as to the patentability of plants and animals produced by conventional breeding methods as opposed to microbiological processes, the comments by the EBA that the law must be given a "dynamic" interpretation, and that it can evolve over time, perhaps indicates that this may not be the final time we revisit this issue.

At UK level the longer term position is unclear. Following Brexit, the UK will no longer bound by the Biotech Directive. What this means in practical terms, for example whether the UK will continue to grant patents in respect of plant and animal products produced by essentially biological processes, remains to be seen.

Sarah Taylor and Asawari Churi are patent law experts at Pinsent Masons, the law firm behind Out-Law. Additional reporting by Charlie Davies, also of Pinsent Masons.