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Supreme Court Rules For Monsanto In Key Battle Over Genetic Seed Patent

Dennis Bueckert
Canadian Press
May 21, 2004

OTTAWA (CP) - The Supreme Court of Canada sided with U.S. biotech giant Monsanto on Friday in the firm's lopsided patent fight against Saskatchewan farmer Percy Schmeiser.

The court ruled 5-4 that Monsanto holds a valid patent on a gene it inserted into canola plants to make them resistant to Roundup herbicide, and that Schmeiser infringed the patent by knowingly planting the Roundup Ready seeds.

The court said that, even though a plant is a higher life form and therefore cannot be patented, a gene in a plant can be patented, and that gives the patent-holder some rights over the use of the plant.

"Infringement (of the patent) through use is thus possible even where the patented invention is part of, or composes, a broader unpatented structure or process," said the majority.

The minority of the court said Monsanto should not be allowed to do indirectly what Canadian law has not allowed it to do directly: to acquire patent protection over whole plants.

"Once the cell begins to multiply and differentiate into plant tissues, resulting in the growth of a plant, a claim should be made for the whole plant. However, the whole plant cannot be patented.

"Accordingly, the cultivation of plants containing the patented gene and cell does not constitute an infringement."

Schmeiser did win on one issue: he won't have to pay his profits from the 1997 crop year to Monsanto, because he never sprayed the crop with Roundup, and therefore didn't profit from patented gene.

Monsanto welcomed the court's decision: "The Supreme Court of Canada has found that Monsanto's patent pertaining to the Roundup Ready gene is valid and enforceable.

BIOTECanada, representing Canada's biotech companies, echoed that enthusiasm.

"We have a strong, vibrant biotech industry in Canada that is growing every day," said Janet Lambert, president of the association. "We congratulate the Court for confirming the vital role scientific discovery and innovation play in Canada."

Schmeiser, who has become something of a hero for critics of biotechnology, accepted the verdict with disappointment. He said farmers should have the right to use their seeds from year to year.

"My wife and I lost 50 years of research and development on rapeseed and canola; that was very difficult to also accept - that overnight we could lose our rights through patent law."

He thanked supporters from around the world who have been contributing to his legal fees.

Lower courts rejected Schmeiser's claim that the canola landed on his fields by accident, but didn't deal with the deeper issue of whether Monsanto can control use of a plant because it has patented a gene in the plant.

The high court ruled that Monsanto has a legal claim to such control.

The court ruled earlier in the case of the Harvard mouse, that higher life forms cannot be patented and Schmeiser based his case on a claim that a plant, too, is a higher life form, and exempt from patent.


Canada's Top Court Backs Monsanto Against Farmer

by Stephen Leahy
May 21, 2004

BROOKLIN, Canada, May 21 (IPS) - Canada's top court ruled against farmer Percy Schmeiser on Friday, upholding agri-business giant Monsanto's patent on genetically modified (GM) canola, a decision observers say will have implications for agriculture worldwide.

However, the Supreme Court of Canada also ruled Schmeiser does not have to pay Monsanto's court costs of more than 200,000 dollars (146,000 U.S. dollars) and can keep 20,000 dollars in profits from his 1997 crop that sparked the six-year legal battle.

"I can save my home and my farm," Schmeiser said.

"My battle is over but not the battle in my heart. A farmer should never lose his right to use (his) seeds from year to year," the 73-year-old added in a press conference.

In upholding Monsanto's patent over the process that created the plant the court, in a tight 5-4 decision, in essence granted the company control over the plant. At the same time the majority decision said plants are higher life forms and therefore cannot be patented, explained Schmeiser's lawyer, Terry Zakreski.

Ann Clark, a crop scientist at the University of Guelph who has written extensively on this issue calls the decision "bizarre".

"These are the same set of judges who said in 2002 that higher life forms can't be patented," she told IPS.

That decision concerned a laboratory mouse used in cancer research, known as the Harvard Mouse.

The very unusual fact that Schmeiser did not have to pay Monsanto's court costs and that it was a 5-4 decision means there will be more litigation in future, Clark predicted.

"It's about as a weak a victory for Monsanto as you could get."

Nonetheless it is a serious loss, because not only did the court not recognise the fundamental right of farmers to save seeds, "it's allowing seeds to become a tool of oppression," said Terry Boehm of Canada's National Farmers Union (NFU).

Schmeiser has steadfastly maintained that his fields were contaminated by pollen from a neighbour's GM canola (oilseed rape) fields and by seeds that blew off trucks on their way to a nearby processing plant.

Monsanto maintains that Schmeiser knowingly infringed on their patents.

Lower courts and now Canada's highest court have ruled that no matter how the plants got there, Schmeiser infringed on Monsanto's legal rights when he harvested and sold his crop.

"We conclude that the trial judge and Court of Appeal were correct in concluding that the appellants 'used' Monsanto's patented gene and cell and hence infringed the Patent Act," said Friday's judgement.

All crop seeds are the result of thousands of years of seed saving and selection by farmers around the world, said Boehm. Allowing a de facto patent, "usurps the entire history of that seed".

One positive outcome of the decision, he added, is the court recognised that Monsanto has to take responsibility for any genetic pollution.

With much of the two-million canola hectares in Canada planted with GM varieties from Monsanto and other companies, canola plants with patented genetics can be found growing wild in farmers fields, along roadsides, in schoolyards and parks.

A Monsanto official was predictably happy with the decision.

"The Supreme Court has set a world standard in intellectual property protection, and this ruling maintains Canada as an attractive investment opportunity," Executive Vice-President Carl Casale said in a statement.

The ruling will affect farmers worldwide, says one expert.

"This will come as shocking news to indigenous farmers in Mexico, whose maize fields have been contaminated with DNA from genetically modified plants, and to farmers everywhere who are fighting to prevent genetically modified organisms from trespassing in their fields," said Silvia Ribeiro, from the Mexico office of ETC Group, an international civil society organisation based in Canada.

According to Ribeiro, advertisements in Chiapas, Mexico are already warning farmers that if they are found using GM seed illegally, they risk fines and even prison.

"In Monsanto's world, we're all criminals unless a court rules otherwise," she added in a statement.

"It's a bit strange that if your land is contaminated that the legal onus is on you to report it," agrees Clark.

In order to not infringe on Monsanto's patent, according to ETC Group, farmers who suspect that GM canola is on their property must notify the company in writing.

Accordingly, ETC Group and partner organisations around the world are organising a campaign to have people send Monsanto Chief Executive Officer Hugh Grant a letter advising him the company's seeds may be squatting on their property.

According to Clark, every farm in western Canada probably contains GM canola. But of the three agri-business companies selling canola in Canada, Monsanto is the only one that protects its patents this way, she added.

It is well past time for the Canadian government to deal with the issue, said Nadège Adam of the Council of Canadians, a non-governmental organisation (NGO) that has supported Schmeiser.

The patent laws need to be amended to ban patents of life forms because there will be further abuses, Adam told Friday's news conference.

At the very least, Canada should amend laws to allow a "farmers exemption" for the re-use of seed and an "innocent bystander" provision so that you cannot be charged with infringing on a patent unless you use or benefit from it, said Zakreski.

"Monsanto's victory will be short-lived," predicts Adam. "The backlash against GM crops is getting stronger."

"This ruling will unite farmers and others opposed to corporate control of food and life, and galvanise civil society to take the issue out of the courts and back to politicians," agreed ETC Group's Executive Director Pat Mooney, in a statement.

Although there is much hype about the success and potential of the biotech industry, all is not well. According to a recent report in the 'Wall Street Journal', publicly traded biotechnology companies in the United States lost 41 billion dollars from 1990 to 2003.

Last week, Monsanto said it would stop development of its Roundup Ready GM wheat, citing lack of a market for the crop.

"By not caving into the extraordinary pressure from Monsanto on this issue, Percy Schmeiser and his wife Louise have changed the course of history," says Clark.

Questions Over Schmeiser’s Ruling by Lim Li Ching
What does it really mean?


Monsanto Wins Key Biotech Ruling

By Kirk Makin and Allison Dunfield
Globe and Mail Update
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. Canada is believed to be the first country where a top court has ruled 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.

At a news conference after the ruling, Mr. Schmeiser said he felt that the past six years had been a personal victory because the case made it all the way to the Supreme Court.

"That's where I always wanted it to be, at the Supreme Court, where the whole issue of patenting life forms would be addressed, or the patent of organisms. ... It may not be the victory that we were looking for, but ... I and my wife have done everything possible to bring it this far."

He said he hoped that the whole issue of patenting genes and putting them into organisms and then claiming ownership of the plants would be examined in the near future by Parliament.

Carl Casale, Monsanto's vice-president of North American and Latin America North, said the decision shows a genuine regard for technological innovation.

"The message that Canada sends in terms of respect for intellectual property and what it means to international investment is very, very strong," he told in an interview.

Mr. Casale said Monsanto will continue to expand its product lines in Canada, in contrast to its activities in countries such as Argentina, where the company recently withdrew from the soya bean market "because our intellectual property rights were not being respected."

The 5-4 majority, led by Chief Justice Beverley McLachlin and Mr. Justice Morris Fish, concluded: "The appellants actively cultivated Roundup Ready Canola as part of their business operations. 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 dissenting judges, however, said the majority were being inconsistent with a recent Supreme Court ruling that higher life forms – which include seeds – cannot be patented. That case involved 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.

On Friday, Mr. Schmeiser said he got into the legal battle because he felt that "a farmer should never, ever lose his rights to use his seed year to year.

"That was the basis we fought for, for the rights of farmers, and I know that if my grandfather and my father were here today, that's exactly what they would want me to do because that's the reason they came to this country, to be free and to use their seeds from year to 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.

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."

Mr. Schmeiser's lawyer, Terry Zakreski, said Friday that he felt that "we're at the end of the road as far as the legal battle is concerned. " While he characterized Friday's Supreme Court decision as a "well-fought legal battle," he said he had hoped that they would have won their ground of appeal that they won on was the one that would say that just because a company has a patent on a gene or a cell, it does not have a patent on a plant.

He said he feels the decision gives a large company such as Monsanto the ability to patent a higher life form.

"Many people around the world had pegged their hopes on that ground of appeal and hoped that we would succeed, but I don't think it ends the war. The war's going to continue."

A representative for the Council of Canadians said that the council is calling on elected officials to assume responsibility and to update the country's Patent Act to address these newly created life forms.


Percy Schmeiser Claims Moral And Personal Victory In Supreme Court Decision

by Percy Schmeiser

(Tuesday, May 25, 2004 -- Cropchoice guest commentary) -- The Supreme Court handed down their decision yesterday and I have mixed emotions to it.

I have received many phone calls and emails from concerned supporters and friends and I appreciate this very much. It was a personal victory and I want to thank my lawyer Terry Zakreski for his dedication and perseverance on my behalf. On the broader issues of my case, I regret that things did not work out for my supporters.

I do not have to pay Monsanto one cent for profits, damages, penalties, court costs or their technology use fee of $15/acre. I feel good about this ruling, as I have said all along that I didn't take advantage or profit from Monsanto's technology in my fields. I am pleased that the Supreme Court felt that way as well. It has been my position that I didn't want their technology in my fields, that I didn't use their technology by spraying, didn't sell their technology as seed to another farmer and didn't earn any profit from it. I felt it hard to accept that I should have to pay them for it.

I believe that Monsanto will have a hard time in pursuing patent infringement against other farmers. They are now going to have to prove that a farmer profited from having RR canola in their field. The Court noted that my profits were the same whether I had conventional canola or RR canola, so I find it hard to see how Monsanto can say in any future case that the farmer made more money because of their product. This decision may have removed the teeth from their patent.

I also believe that Monsanto will face huge liability issues down the road. The Court determined that they have ownership to the plant and that I infringed by having it in my field. With ownership comes responsibility and I assume more lawsuits will be filed against them for the contamination of farmer's fields. I was always concerned about this lack of responsibility that Monsanto took for the unconfined release of RR canola in western Canada. I think the Court's decision will force them to be held accountable for it now.

On the bigger issue of whether or not their patent was valid, the Court ruled that it is, and we have to accept that judgment. For this to be changed our Parliament will have to act. We have a conflict between plants breeder's rights and patent law and the government will have to sort that out. All I did was save my seed from year to year. Now it is clear that a company's patent will take precedence over the rights of farmer's to save and reuse their seed.

Farmer's should be concerned about this judgment as they now may lose their ability to continue with this practice. I believe that this ruling is an injustice and Parliament must act to ensure that farmer's rights are protected. The playing field between farmer's rights and the bio-tech companies rights has been tilted towards the companies with this decision.

I have always campaigned on the right of a farmer to save and re-use his own seed. This is what I have been doing for the last 50 years. I will continue to support any efforts to strengthen the rights of a farmer to save and re-use his own seed.

In the near future, I plan on spending more time with my wife, children, grandchildren and friends. They have been very supportive of my efforts and I want to thank them for it. I could not have done this without them. I also wish to thank the countless supporters that I had. I have met many people, groups and organizations that gave me personal, moral and financial support. I won't name them all at the risk of forgetting someone. I still have legal bills to pay and I am grateful to all for any past and future contributions.

Louise and I have made many friends and acquaintances in this crusade and we will cherish those memories and friendships forever.

What Makes Percy Schmeiser So Persistent? - An interview by Paul Goettlich


Schmeiser Loss Leaves Monsanto Empty Handed

by Paul Beingessner
Canadian farmer, writer

(Thursday, May 27, 2004 -- CropChoice guest commentary) -- Percy Schmeiser's day in the sun may finally be coming to an end with last week's Supreme Court of Canada decision in his battle with agrochemical giant Monsanto. Percy, no doubt, is glad to see the end of it. Since being accused by Monsanto of planting Roundup Ready canola without paying the tech fee, Schmeiser's quiet life as a farmer has turned into a continual media circus. And, while the decision went against Schmeiser, in that the court allowed Monsanto to control seeds and plants containing its patented gene, Percy must be trying to hide a wry smile at the outcome. He lost the appeal in one sense, but in another, he can claim victory. The Supreme Court threw out the huge award given to Monsanto by the lower court. It left Schmeiser with no further penalty and each side paying its own court costs.

The decision on the legality of Monsanto's patent is a disappointment to farmers fighting for the right to save their own seed, but there are some positive features to the Supreme Court's judgement.

For one, it was extremely close, with four of the nine Supreme Court judges agreeing with Schmeiser, and stating that, in their opinion, Monsanto should pay his legal costs.

The other five judges took Monsanto's position, but ruled that since there was no evidence that Schmeiser had actually sprayed the crop with Roundup, he did not benefit from the technology in the seed. Since he did not benefit, Monsanto was not entitled to the profits he derived from the crop. In a similar case in the U.S., an appeal court struck down a massive award against farmer Homan McFarling for saving seed from Roundup Ready soybeans. McFarling, net worth $78,000, had been ordered to pay Monsanto $780,000. The court ruled that the penalty Monsanto puts in its soybean contracts - 120 times the value of the technology fee - was not a fair way to assess the damage to Monsanto from McFarling's actions.

All nine judges in Schmeiser's case also seemed to agree that the issue of "higher" life forms was not clear enough in the Patent Act and should be clarified by Parliament.

Groups that supported Monsanto were pleased with the decision. The biotech industry was relieved, claiming that a Schmeiser win could have been a deterrent to large companies investing in ag research in Canada.

The latter comment merely echoes Monsanto's position. The truth is though, that large companies like Monsanto do not play a major role in plant breeding in Canada. Canada's major cereal and pulse crops are largely derived from public breeding programs paid for either by taxpayers or by farmers themselves through checkoffs. Only in canola is much private money being put into breeding. And in canola, so it seems, Monsanto has not done anything noteworthy since it put the Roundup Ready gene into a canola plant.

In plain truth, whether or not plants are protected by patents will have little short term effect on plant breeding. Whether or not biotech proponents like to admit it, genetic modification has had little impact in cereal (other than corn) and pulse breeding. We have been promised it will for some time, but we could get old waiting for promises like that. Where, for example, is the fusarium resistant wheat we've been promised would end farmer resistance to GM crops? Nowhere on the horizon, I've been told.

Interestingly, the dissenting opinion of the four judges recognized that companies that put a gene in a plant may benefit far more than they should from the results. To get a Roundup Ready variety of canola or corn or wheat, Monsanto must first take a conventional variety that has all the necessary characteristics needed in that crop. It then adds one additional factor - Roundup resistance, and claims ownership of the whole plant. The dissenting judges quoted the Canadian Biotechnology Advisory Council which noted in 2002 that that much of the value of a higher life form comes from what is inherent in all such life forms. The judges reasoned that a patent on a higher life form might in this way "overcompensate the relation to what was invented".

The end of Schmeiser's case is not the end of the GM issue. Organic farmers in Canada have a suit going against Monsanto for failing to control the spread of its Roundup Ready canola. The spread of Roundup Ready genes throughout canola varieties has made it all but impossible to grow organic canola in Canada. Farmers in the U.S. are challenging the validity of Monsanto's patents in their courts. While Percy's battle is over, other farmers fight on.

(c) Paul Beingessner (306) 868-4734 phone 868-2009 fax

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