Geneva, Switzerland
August 17, 2010
Source: Intellectual Property Watch?
The potential impact of Monsanto Technology LLC v. Cefetra et al. on patent infringement
By Richard Peet, Vid Mohan-Ram, and Philippe Vlaemminck
Executive Summary
A recent Court of Justice of the European Union opinion in Monsanto Technology LLC v. Cefetra BV et al.1 may unintentionally inflict serious economic harm on the European biotechnology industry. In its ruling, the European Court of Justice (ECJ) interpreted Directive 98/44/EC (the “Directive”) in the context of patent infringement as requiring functionality for there to be infringement of important types of claims. The ECJ reasoned that patent claims covering isolated DNA or transgenic products that contain the patented DNA cannot be infringed if the DNA is not functional at the time of alleged infringement.
As a result of the ECJ decision, there is a significant risk that countless biotechnology products are not protected by enforceable patent claims. An accused infringer, for example, could deny infringement by simply asserting that the patented polynucleotide or gene does not perform its function at the time of alleged infringement. Because many genes are only temporarily functional, or functional only in some tissues or organs, or have many functions, this defense may have merit. Furthermore, the opinion’s impact may extend far beyond a narrow conception of the biotechnology industry. For example, the viability of patents claiming isolated DNA or RNA sequences used as reagents – including reagents used in diagnostic methods such as gene tests and DNA chips – are now in jeopardy.
The ECJ decision is surprising because Article 9 of the Directive, which was an important basis for the ECJ’s ruling, was intended to define what constitutes patentable subject matter when the claims in question cover living and replicating organisms. Article 9 was not intended to define the scope of enforceable rights in the context of alleged patent infringement. We believe that, in the context of patent infringement, so long as the patented genetic information is present in the commercial product, its activity at the time of commercialization is immaterial. We propose steps the biotechnology industry in Europe and the U.S. might take to remedy the serious consequences of the ECJ ruling including legislation and World Trade Organization litigation.
In the meantime, intellectual property owners should immediately review their portfolios with an eye toward obtaining additional protection that is not affected by the ECJ’s decision. Utility patent claims, for example, covering products with unique characteristics, have always been important but now have increased significance in view of the opinion, as do method claims. Plant biotechnology companies also should obtain Plant Breeder’s Rights for important plant varieties to protect harvested material and products made from harvested material.
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