27(3). Members may also exclude from patentability: (b) plants and animals other than
micro-organisms, and essentially biological processes for the production of plants or
animals other than non-biological and microbiological processes. However, Members
shall provide for the protection of plant varieties either by patents or by an effective sui
generis system or by any combination thereof.
The draft TPP splits this into separate paragraphs dealing with (a) plants and animals, and (c) essentially biological processes for the production of plants and animals.
I find the notation to this provision a bit confusing, but as I understand it, the US proposes that both potential exclusions would be eliminated:
3. Each Party shall make patents available for inventions for
(a) plants and animals
(c) essentially biological processes for the production of plants or animals, other
than non-biological and microbiological processes for such production
Ten countries, including Canada (Japan’s position is not noted), propose that (the “majority proposal”):
3. Each Party may exclude from patentability
(a) plants and animals, other than microorganisms
(c) essentially biological processes for the production of plants or animals, other
than non-biological and microbiological processes for such production
In the alternative, five countries, including Canada, propose that the TRIPS potential exclusions be maintained as is (the “alternative proposal”):
3. Each Party may also exclude from patentability
(b) plants and animals other than microorganisms, and
essentially biological processes for the production of plants or animals other than
nonbiological and microbiological processes.
However, Parties shall provide for the protection of plant varieties either by patents or by
an effective sui generis system or by any combination thereof.
The difference between the majority proposal and the alternative is that the majority proposal would not explicitly require that parties provide an effective alternative to patent protection for plant varieties. However, since all of the TPP countries are WTO members, they would be bound be the TRIPS provision in any event, unless they qualify for the LDC transitional extension. So, it may be that the effect of the alternative would be to require LDCs to provide for an effective system of plant protection under TPP even if not required to do so under TRIPS. However, this may be parsing the draft too finely; the leaked draft simply provides notes, and the negotiators would understand more clearly the implications of the alternatives.
I will discuss in turn the paragraphs relating to higher life forms and essentially biological processes.
Plants and Animals
Existing Canadian law is that while lower life forms are patentable, higher life forms are unpatentable as such (Harvard Mouse 2002 SCC 76), though the cells of higher life forms are patentable (Monsanto v Schmeiser, 2004 SCC 34). The net effect of current Canadian law is that plants and animals which are developed through traditional hybridizing are unpatentable, because they cannot be adequately claimed at the cellular level, but genetically engineered plants and animals are effectively patentable, via a claim to their cells. Thus the Canadian negotiating position would not require any change to current Canadian law. The US position would require a change to existing Canadian law, but that change would largely be formal with respect to GMOs, which are already effectively patentable. Allowing patentability of traditionally hybridized plants and animals would be a substantive change, though plants are already protectable under the Plant Breeders Rights Act. So, the US proposal would require Canada to change the form of protection for traditionally hybridized plants, though not the fact of protection. The idiosyncratic Canadian approach is not required by the majority proposal, which would allow TPP members to exclude patents for higher life forms, such as GM crops, which are effectively patentable in Canada. That would have a far greater impact on the innovation regime for higher life forms than does current Canadian law. The current Canadian position is not principled – it is the result of a change in the composition of the SCC between the Harvard Mouse decision and the Schmeiser decision – though that does not necessarily mean there is no principled justification for current Canadian law.
The most general argument against patenting higher life forms is that the patents are intended to promote innovation by providing an incentive to invent, but at the same time inventions build on inventions, and by raising the cost of using prior inventions, patents have the potential to impede innovation, rather than promoting it. Whether patents are good on the whole depends on this trade-off, and it is clear that the trade-off varies between industries: see my review of the literature in “The Structure of the Law of Patentable Subject Matter,” (2011) 23 IPJ 169. Whether patents promote innovation in a particular industry depends on the characteristics of the innovation system in that particular industry, which is ultimately an empirical question. With that said, as a broad generalization patents are likely to be important to innovation in “discrete” product industries, in which a single innovation which is expensive to develop yet easily copied provides most of the value of the product in which it is embodied. In contrast, patents are less likely to be important in promoting innovation in “complex” product industries, in which the product embodies a large number of constantly changing small innovations. In my view, GM plants and animals, such as an oncogenic mouse, or herbicide-resistant canola, fall very close to the discrete product end of the spectrum, so patents are very likely to be important to innovation. This means there is a strong prima facie argument in favour of patenting higher life forms, or at least those produced by genetic modification. This general argument supports the US position.
A second argument against patenting of higher life forms is that plants and animals have special characteristics, such as the ability to self-propagate, which raise unique considerations requiring special treatment, such as a greater potential for innocent infringement through crop contamination, or the possible need for a “farmer’s privilege” which would allowing farmers to save seed. It is these kinds of arguments that persuaded the majority if the SCC in Havard Mouse that Parliament did not intend that higher life forms should be patentable. Whatever the merits of the arguments that plants and animal inventions require special treatment, they do not justify denying protection altogether. To do so would be to throw the baby out with the bathwater. If we accept that patents (or some form of IP protection) are necessary to promote invention with respect to higher life forms, then the obvious response to any special considerations is to allow patents and implement specific provisions to deal with the special problems. The legislature is in a different position from the courts in this respect.
The third, and strongest, argument against patenting of higher life forms is that the Plant Breeders’ Rights Act (PBRA), and similar acts worldwide under UPOV, already provides adequate protection for such inventions. This is a variant on the second argument; it says that we don’t need to provide amendments to the Patent Act to deal with unique issues related to plants, because we already have a regime that deals with those issues, while providing an adequate incentive to invent, namely the PBRA. This is a reasonable argument, which supports the alternative position (and the majority position as well, to the extent that the only issue is as to when the requirement to provide an effective alternative will kick in). Indeed, on its face, it is entirely unobjectionable, since it would require “effective” protection for plant inventions, which might be taken to mean a system that is just as effective as patents, but tailored to the specific problems of plants. However, there is a real debate as to what it means for a system to be “effective.” The UPOV system, as the most obvious alternative, is different from the patent system, for example in allowing for the farmer’s privilege (the right to save protected seed for planting a subsequent crop, permitted by UPOV 15(2) as an optional exception), or the breeder’s exemption (required by UPOV 15(1)(iii)). The question is whether the UPOV system, with these exceptions, provides “effective” protection, and more broadly, whether it strikes a better balance than the patent system. Thus, whether this Canadian proposal is better than the US proposal that plants shall be patentable depends on the details of a comparison between the patent and UPOV regimes. I am inclined to think that a farmer’s privilege is not desirable, at least for GM crops, and while a breeder’s exemption may be desirable, it may be adequately provided for by an experimental use defence to patent infringement. I see the plant breeders’ rights under UPOV as a complement to patent rights, which allows protection for plant varieties that can only be described morphologically, and so cannot be defined sufficiently clearly to be claimed under the patent system, rather than a replacement for patents. With that said, these issues are complex and are open to reasonable debate.
The situation with respect to animals is different, as there is no equivalent to UPOV which might replace patent protection. My understanding is that in practice the sexual nature of animal reproduction means that IP protection is not necessary for traditionally bred animals, as the unique characteristics of a prize animal are not exactly preserved in its offspring. This contrasts with clonal propagation of plants. However, the majority proposal would allow for the exclusion from patentability of GM animals, and I don’t see any good reason for this, at least from an innovation perspective.
The difficult issues raised by plant protection in particular invites the more general argument in favour of the alternative position, which is now is not the time to resolve these difficult issues, which require more study. The counter-argument is that the TRIPS exemptions were included because of the “large uncertainty that existed in the field of biotechnology at the time of the Uruguay Round negotitions” Pries de Carvalho, The Trips Regime, §27.92. Biotechnology is now largely a mature industry. If we are not ready now to resolve these questions, then when? I must admit that I would be more comfortable with this counter-argument if the patentability of plants and animals were the only difficult issue on the TPP agenda, but, as subsequent posts will describe, it is not.
Essentially Biological Processes
As I understand the notation, the position of the parties is as follows:
US proposes that:
3. Each Party shall make patents available for inventions for (c) essentially biological
processes for the production of plants or animals, other than non-biological and
microbiological processes for such production
Others (including Canada, but excluding Japan, whose position is not noted) propose:
3. Each Party may exclude from patentability (c) essentially biological processes for the
production of plants or animals, other than non-biological and microbiological processes
for such production
Again, the majority position would preserve the flexibility in TRIPS Art 27(3)(b), while the US would close that potential exclusion. The majority position would potentially permit the exclusion of enhanced methods of classical breeding such as marker assisted breeding. Traditional breeding methods, such as visual selection of prize animals, are no doubt “essentially biological,” but they are not patentable in any event as not being novel. I am not familiar with the details of this debate, though I must say that I don’t see any obvious reason why new and inventive methods of assisted breeding should not be patentable. Now, it may be that an exclusion for “essentially” biological processes does permit patenting of new biotech processes, on the ground that they are not essentially biological, but there is a grey area as to what this term means: see Nuno Pires de Carvalho, The Trips Regime, §27.94 arguing that the exception should be restrictively interpreted; and see Michael A. Kock, Essentially biological processes: the interpretation of the exception under Article 53(b) of the European Patent Convention, (2007) 2 JIPLP 286 for a review of the law on the equivalent EPO provision. But if biotech processes are to be patented, and classical processes are unpatentable in any event as not being novel, it strikes me that this exclusion does nothing but create uncertainty.
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