Public Germplasm Development at a Crossroads: Biotechnology and Intellectual Property

Peggy G. Lemaux

"The greatest service which can be rendered to any country is to add a useful plant to its culture"
Thomas Jefferson

Genetic Diversity: a Valuable Raw Material

Some ten to twelve thousand years ago, human beings began to make the transition from hunting and gathering to the practice of agriculture. Green plants were pivotal to that transition because they are the primary renewable source of energy and biomaterials and one of the key recyclers of air, water and bioavailable minerals. During the agricultural revolution, plants traveled with people as sources of food and they began to adapt to new climates, soils, insects and diseases, which led to incredible diversity in germplasm. This genetic diversity has become, in the eyes of many, the world's most valuable raw material. Diversity is required for agricultural crops to continue to adapt to changes in the environment and their natural enemies.

Since genetic diversity is an essential component of the ability of living organisms to continue to evolve, the "health" of this resource is of immense importance. As we enter the "age of biotechnology" where genes, which form the basis for biodiversity, are also the basis for manipulating organisms, the fate of the human race is tied even more closely than ever to this biological diversity and its control. Questions of ownership and control over biological resources will be the basis for political and economic skirmishes and will influence how effectively this valuable resource is used and conserved.

The manner in which these issues are resolved will affect the way in which the benefits of diversity are shared or not. How did the mechanisms for control of this valuable resource come into existence? To answer this question, one must study the history of plant domestication.

History of Germplasm Development

Early seed distribution programs

The discovery of new and potentially useful plants in the North America came at a time when England in particular was beginning to develop the capability to exploit the discoveries by creating scientific institutions and networks, which engaged in the orderly classification, collection and evaluation of plants. Botanical gardens focused on plant collection, helped acclimatize the new crops and developed knowledge about the plants. At this time, patent protection was not viewed as feasible because of the biological characteristics of plants and the legal, administrative and economic structures of the period.

In the U.S. a different pattern of seed collection and control emerged through the USDA who collected and distributed seeds in an effort to make agriculture more productive. Control over seeds was held by farmers, who played an active role in developing this genetic material to suit their own needs. Farmers saved seed for their own use and distributed it to neighbors because there was no good commercial sources of seed. Expansion not limitation of production was the goal. Legal protection was not attempted because of the difficultly of enforcement; unlike other inventions, like the electric light bulb, plants were able to reproduce themselves!

The arrival of the train in the late 1800's changed the distribution of agriculture since now products could be shipped to distant markets. Shipments of grains and grain products rose dramatically. In addition, the railroad served as an extension service, distributing improved crop varieties.

Nature's own patent

Introduction of double cross hybrids in the 1930's began to change the role of the farmer. Farmers were now suppliers of raw materials to commercial breeders who could acquire control over the new seeds they created. This was a paradigm shift in the relationship of farmers to their seed because now the breeder maintained control over the inbreds, not the farmer. And hybrids did not breed true - so saving seed was not successful. This led to the concept of a proprietary product - this was nature's own patent which was similar in many aspects to a legal patent.

This was revolutionary. Selecting and saving seed linked farmers to hundreds of generations of ancestors; it was often a form of family heritage. The use of genetics to create desirable germplasm meant that breeders had tools to use in creating germplasm that were not available to farmers. Farmers could continue to "fine-tune" germplasm for their particular uses, but the major advances and rapid progress would be within the research establishment. This seems comparable in many ways to the situation in which public germplasm breeders find themselves today with the advent of biotechnology, which is practiced in the laboratory away from the breeders fields and it is practiced with tools that are not available to breeders.

Plant Patent Act of 1930

The advent of the hybrid offered germplasm protection for certain crops. The burgeoning nursery business, however, still relied upon the fortuitous discovery of chance mutations for new varieties. Fruit trees, berry bushes and roses could be clonally propagated. The commercial drawback, however, was that once sold these varieties could be easily multiplied and sold by competitors.

The Plant Patent Act of 1930 was directed toward protecting this type of germplasm, which was actually not the result of inventive activity. In fact the goal of Plant Patent Act of 1930 was not to protect an inventor but to capture economic and legal control over a variety - whether it was invented or not.

The PPA excluded seed bearing plants because Congress would not allow patents on foods. However, in the 1950's- 60's, breeding of crop species was no longer haphazard; it was approached rationally and scientifically. The market became appreciative of breeder's efforts at improvement. Seed companies tried hybrid approaches and breeder/grower contracts, but these forms of protection were not reliable. Price-cutting seedsmen would take varieties, developed through years of breeding, multiply them and sell them at cut rates.

Those involved opted against broadening the existing patent act for strategic reasons because they were afraid that the Supreme Court would strike down all plant patents for lack of invention since the horticultural industry really could not justify "inventorship" of their varieties. Proving patentability of plant varieties seemed problematic in terms of patent law. The move toward finding a solution was aided by the corn blight of the late 60's. A reason for its severity, put forward by the seed companies, was that the seed industry needed some protection for their "creations" in order to invest in creating varied germplasm.

Plant Variety Protection Act of 1970

The formulation of Plant Variety Protection Act, passed in 1970, was thought to open up public breeding efforts to focus on issues like the corn blight, while companies pursued more lucrative areas. Therefore the genesis of the split between public and private efforts. This act permitted the protection of new varieties through the USDA, but was limited to just the plants themselves. It permitted the saving of seed for replanting and to sell to neighbors. These varieties could also be used in breeding new varieties without license or royalties.

By 1980 the seed industry had become big business. In addition, the biotechnology industry was entering this arena. In this industry the ability to raise funds for research was tied to being able to secure patent position and protection. Property rights over plant varieties came to be viewed as though there was essentially no difference between light bulbs and plants or that there was no difference in the inventive process between the two. This view led companies to seek protection in the courts, as well as the USDA.

It seemed that further broadening of property rights would probably not entail an amendment to the PVPA; Congress did not seem the appropriate arena for these changes and relief was sought in the courts. In addition at this point agriculture had become international and companies sought international protection which was beyond the capabilities of the U.S. Congress or the USDA. The broadening focus of the agricultural sector on international markets and the rapid development of the "new biotechnologies" in the 80's presented companies with remarkable commercial opportunities. The U.S. Congress was not interested in providing protection for the new genetically engineered organisms. Companies were stymied in their ability to protect their research investment and secure their position in the marketplace.

Utility Patent Option

Some "players" sought to increase utility patent protection by asking the courts to reinterpret existing patent law in order to expand the applicability of those laws. In the 1970's General Electric fashioned a powerful test case on the patentability of life forms, which went all the way to the Supreme Court. The case was won by General Electric and their creation of an oil-eating bacterium, was judged to be of human manufacture. This set the stage for modern patent rights over biological organisms.

Contrasts between PVP and Utility Patent Protection

This chronicle indicates what the options are for plant protection today. PVP, which is mediated through the USDA PVP office, and utility patents, which are adjudicated through the courts. In both cases, the invention must be novel. PVP protection requires that the cultivar be distinctive; the distinctiveness can be satisfied if any trait, regardless of the trait's importance differs from all previous lines. For utility patents, close "look-alike cultivars" do not generally afford patent protection for both cultivars, under the doctrine of equivalents, which states that, if the product accomplishes the same thing and in substantially the same way, there is infringement. In this case, the first patented cultivar may exclude patent protection on the "look-alike cultivar. In addition, if the invention is predictable to one "skilled in the art", it will not be patentable.

Another difference between the two forms of protection has to do with the extent of coverage. Under PVP, the seed and plant of a cultivar are protected; with utility patent protection, a broader array of tangibles can be protected, e.g. seeds, whole plants, plant parts, cultivars, hybrids, genes or physical traits, methods of plant regeneration and other biotechnological processes and products. Another significant difference is that PVP has farmer's exemptions and research exemptions for creating new commercial cultivars, while utility patents have neither of these exemptions. Research exemptions for noncommercial purposes are available for both.

In 1994 there was an amendment to the PVP, called PVP(a). This extends the coverage of the protection to cultivars which are "essentially derived" from the original protected variety. This includes genetically engineered traits as long as the fundamental variety itself is not substantially changed. Certificates prior to 1994 are not "grandfathered" in under PVP(a). So a variety protected before 1994 could be used by another entity and changed through genetic engineering but could not be prosecuted by the breeder. With post-1994 varieties, this could not be done without violating the breeder's PVP certificate; the entity making the change in the PVP variety could obtain a patent on the new variety. However, to date, this has not been challenged in the courts.

Examples of Protection in the Marketplace

How would this type of legal protection play out in the market place? For example, what if a rice variety which was developed in the state of California was used by a biotechnology company to insert a new gene for herbicide tolerance. Does the new herbicide-tolerant variety belong solely to the company that inserts the gene? Or does organization who developed the original variety have some rights over the germplasm?

Us of an analogy might be helpful. A company spends years designing a car with all the right engineering and aesthetic aspects. The car is then protected through a utility patent. In the meantime another company invents and patents a new computer chip, which, when added to the car, allows the driver to avoid certain types of accidents. Obviously, the new computer chip is a very important trait, which adds value to the existing car, but the trait itself is worth nothing without the car.

The question is who has rights over the new car with the computer chip? The newly developed car in this example would have utility patent coverage on some of its features. Within a utility patent's coverage, it would be an infringement to change the car, regardless of whether the change includes something new and patented. A license to change the original invention would be needed. For example, the new computer could be added to the patented car, but the end product would still infringe the original utility patent on the car. Even if the new computer chip is patented, the result is the same since patented new improvements are often subordinate to a dominating patent.

The situation with PVP protection is much different. When a "PVP-protected car" is changed to introduce a new characteristic, like the computer chip, the new car is considered a different entity, even if the original car was the subject of PVP protection. PVP protection can be sought for the new car with the computer chip. In the plant situation, even if a variety were PVP-protected, the addition of a new trait creates a new variety for which new protection can be sought.

The unanswered question of law is whether in this example the new car with the new computer chip or the new plant variety made by inserting an herbicide tolerance gene into a PVP-protected variety would infringe the original PVP. This issue of an "essentially derived" variety is an attempt by Congress to expand PVP protection to PVP varieties that already exist, but the extent of the legal protection afforded by this expansion has not yet been tested in the courts. The bottom line is, however, that protection afforded by a utility patent is much broader and safer than that afforded by PVP, but it is also much more costly.

If the original car or plant variety is not protected with PVP, then there is little legal recourse, although clearly in many cases considerable resources have been invested in developing the car/variety and it is likely not in the best long-term interests of the licensee to "raid" the original car/variety without reaching some "gentleman's agreement" with the holders of the original car/variety.

A different approach to sharing in the "fruits" of the improvement between the inventors of the car and the computer chip is to transfer the ability to replicate or modify the car, subject to a contract which restricts what the recipient can do with the car unless the car manufacturer is involved and potentially benefits from the changes. This can be in the form of a material transfer agreement. As a legal agreement , formalized between the partners involved, it is in effect a form of intellectual property protection.

The restrictions in such a contract, which would relate to plant varieties, might include the non-exclusive right to possess the cultivar to asexually propagate it for the purposes of producing fruit. The Licensee is expressly prohibited from altering the licensed cultivar through any means. This is a way in which the "inventor" can control the illegal propagation and manipulation of plant varieties. This agreement, however, is only as good as the licensee's compliance with the agreement since it is very difficult to enforce the ban, since it is easy for plant material to change hands.

Frequency of Types of Protection

In the U.S. the number of Plant Patents, Plant Variety Protection Certificates and Utility Patents has increased dramatically in the last 25 years. For example, the number of PVPs issued for new varieties of field crops, grasses and vegetables climbed from 153 in early 1970's to 992 in the early 1990's. New soybean, corn and vegetable varieties accounted for 57% of this number and the private sector owned approximately 87% of these PVPC's. By the end of 1994, 286 utility patents had been issued for plants or plant parts. The trend in the biotechnology arena is clearly toward utility patents because of the high cost of product development.


In summary, the public sector has been an important player in the development of new plant varieties through the use of federal and state monies. The varieties so developed were moved to the commercial field with little thought, in the case of seed-bearing varieties, for legal protection until the 1970's. In some cases, the development of hybrid seed obviated the need for legal protection. However the advent of biotechnology has resulted in practices relating to plant variety development which are expensive, requiring substantial up-front investment for developing enabling technologies, identifying useful genes and engaging in product development. This reality has led to increasing intellectual property protection of key elements necessary for product development in order for companies to recoup the substantial costs of product development.

This protection is sought long before products enter the field for key product development elements and this has resulted in protecting innovations early in the game or else sometimes the requisite intellectual property rights needed to "practice the invention" are not available. Some of the early efforts in marketing products of biotechnology by the public and private sectors hit roadblocks and resulted in a substantial drain on resources; some entities simply got out of the business. This practice is unprecedented in the agricultural sector and has led to a new paradigm for production agriculture.

It will be difficult for individual commodities to be able to capture the tools needed to practice biotechnological inventions. Commodities need to work with and invest in the development of requisite tools within the universities. These would include transformation technologies, value-added genes and control sequences. A commodity also needs to protect the germplasm which they develop so that they have bargaining power with the requisite players in biotechnology. In addition growers need to be encouraged to use protected germplasm. Commodities need to work closely with the public sector to identify goals of common interest and invest in research in such a way that intellectual property rights are captured.

In the short-term, companies have many "vendors" from which to obtain germplasm and therefore some organizations might not be involved in commercially important germplasm development. In the long-term, however, companies must concern themselves with many public sector breeding efforts. Public germplasm efforts might focus on traits from which the private sector will not see sufficient financial gain. These traits can then be "piggy-backed" with more lucrative traits which are pursued in the private sector. If this path is not followed, the genetic diversity of the germplasm used by the private sector and its suitability for certain environmental niches will be compromised. This does not seem like a good strategic move for agriculture. The corn blight of the 1950's was a dramatic demonstration of this!! A working partnership between the two sectors, where both parties gain something from the partnership, seems to be the most rational and prudent strategy.