Farm v Pioneer: Will Supreme Ct. Uphold Plant Patents?
August 9, 2001
The issue in Farm Advantage v. Pioneer Hi-Bred International, now before the Supreme Court, is whether farmers should pay once for genetically modified seeds or should they pay for new seeds with each crop they plant? A win for the Farm Advantage will allow farmers to save seeds from their first bio-engineered (or genetically modified) crop for planting successive crops. A win for Pioneer, a Dupont subsidiary, will require the farmers to buy additional seeds for each new bio-engineered crop they plant. Verdict cautiously predicts the Supreme Court will rule in favor of Dupont because the Court will interpret section 101 of the patent statute “strictly” using the “plain meaning” method of statutory interpretation. The court will read section 101 in light of its 1980 decision in Diamond v. Chakrabarty that opened the door to utility patent protection for new life forms.
II. Legal History of Patents and Plant Protection:
The Constitution gave Congress the right to enact patent laws and Thomas Jefferson drafted the first patent law in 1793. A key provision in Jefferson’s statute survives virtually unchanged as current § 101. Section (§) 101 governs what subject matter is capable of being patented in utility patents. Section 101 provides:
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.”
Utility patents differ from design patents because design patents must be non-utilitarian. Design patents are governed by different statutory provisions, which are not relevant to this discussion.
For most of our legal history, it was universally assumed that moral considerations precluded “patenting life.” Although Congress never enacted an explicit legal prohibition barring utility patents from new plant and animal life forms, Congress enacted two separate laws to protect the inventors of new plants with the prevailing assumption in mind. The Plant Patent Act of 1930 (PPA) gave limited patent protection for inventions of asexually reproduced plants. At one time, this protection was part of §101. Subsequently it was moved elsewhere in the patent statute, but PPA patents still fall within the administration of the U.S. Patent and Trademark Office (“USPTO”). The Plant Variety Protection Act of 1970 (PVPA) created another form of even more limited protection for some novel, sexually reproduced plants, but administration of this statute was given to the Department of Agriculture which issues plant protection certificates. The important thing to remember is that these provisions, individually and cumulatively, afford much more limited protection than §101.
Section (§) 101 utility patents have significant advantages over PPA patents and PVPA certificates:
|Features||Utility patents (section 101)||PPA patents||PVPA certificates|
|Period||20 years||20 years||20 years|
|Infringement||Make, use, sale, offer||Reproducing, using, sale, offer||Requires further propagation|
|Damages||Yes + treble for intentional||Yes + treble for intentional||Requires actual knowledge|
|Exclusions||None||Tuber propagated||Fungi, bacteria|
|Exemptions||None||Reduced written description||Research, crop saving|
|Agency||USPTO||USPTO||Agriculture, farmer reps|
|Reproduction||No restriction||Asexual only||Sexual only|
III. The issues before the Court:
On October 3, 2001, the Supreme Court will hear oral arguments in Farm Advantage. A decision is expected early next year. This case will decide the following issues:
1-Should farmers pay once for seeds or should they pay for seeds with each crop they plant?
2- Will the approximately 1600 existing “utility” patents issued under §101 that currently cover genetically engineered plants remain valid?
3- Can the U.S Patent and Trademark Office issue utility patents for bio-engineered plants under §101 so that plant patents have full protection of §101 utility patents and not the limited protection of PPA patents or PVPA certificates?
IV. Major Shift in Assumptions about “Patenting Life:”
In 1980, the Supreme Court in Chakrabarty reversed the prevailing assumption and held that moral considerations did not exclude life forms from patents under §101. The court held that bacteria could be patented. The court approved patenting of “everything under the sun,” including bacteria and other life forms. In this case, the Supreme Court considered whether or not human-made, genetically engineered bacteria should be patentable under §101. Chakrabarty invented a bacterium that could break down multiple components of crude oil. The invention was valuable in treating oil spills. The Court in a 5-4 decision by Chief Justice Burger held that, because no naturally occurring bacteria possessed the properties of Chakrabarty’s invention, the bacteria (the invention) came within the scope of the language in §101 that says: “any …manufacture…or composition of matter”.
The Court noted that, in the 1952 re-codification of the patent law, Congress intended statutory subject matter to “include anything under the sun that is made by man.” The Court went on to say:
“This is not to suggest that § 101 has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable… Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are “manifestations of . . . nature, free to all men and reserved exclusively to none.”
Judged in this light, respondent’s microorganism plainly qualifies as patentable subject matter. His claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter — a product of human ingenuity “having a distinctive name, character [and] use.”
The Chakrabarty decision rejected the PTO’s three objections to the patent application:
(1) That microorganisms are “products of nature,”
(2) That as living things they are not patentable subject matter under §101; and
(3) That the PPA’s coverage of plants but silence on bacteria and other living organisms reflects Congressional intent to exclude bacteria from the scope of §101.
In Chakrabarty, the Court used conservative “plain meaning” method of statutory interpretation [see section V below] (using dictionary definitions) instead of the more liberal congressional intent (that uses legislative history and interplay with other laws, the plant-specific PPA and PVPA). However, the (predominantly conservative) majority did consider the congressional intent and interplay with other laws, if only to conclude that they supported the plain meaning analysis. There were two crossover votes: Stevens, a liberal, joined the generally conservative majority and Powell, a conservative, joined the generally liberal dissenters.
V. “Congressional intent” (liberal) versus “Plain Meaning” (conservative)
“Congressional intent” and “plain meaning” are labels for a philosophical battle that has occurred between liberal and conservative justices of the Supreme Court since the 1950s. The battle has occurred repeatedly on administrative law issues for 30 years. Both are tools of “statutory construction” and neither is the exclusive province of one wing or the other.
Liberal justices invented the use of legislative history to divine Congressional intent because it permitted them to broaden the scope of regulation. Critics say this means that the Supreme Court rewrites laws when it engages in statutory construction. Many legislators make speeches about what they want laws to accomplish. The speeches become important much later when administrative agencies push the envelope on the scope of their powers and then liberal judges uphold the agency’s use of power by declaring that the words of the statute were not conclusive so that the legislative history must be examined. Because sweeping statements from legislators could always be found, those words would justify the expansive interpretation of the law.
Conversely, conservative justices care less about what legislators set out to legislate; but rather, examine the words of statutes to determine what a law means from the precise words of the statute: hence the label of “plain meaning.” Justice Scalia has forged a conservative majority on many issues so that the plain meaning analysis has limited expansive interpretations of statutes based on statutory construction of congressional intent.
VI. The Farm Advantage v. Pioneer Hi-Bred International Case:
Highlighting the highly political nature of this case, the plaintiff Pioneer was founded in 1926 by Henry A. Wallace, who later served as Secretary of Agriculture and Vice President. The current case arises from a 1996 patent infringement suit brought by Pioneer against seed vendors and farmers, who after buying Pioneer’s bio-engineered corn seeds once, saved some of the resulting crop as seed corn for subsequent sexually propagated crops.
Neither the PPA nor PVPA would protect Pioneer under the facts of the Farm Advantage case. The PPA does not apply because the corn was sexually propagated. The PPA covers only asexual propagation. The PVPA does not apply because, although it applies to sexually propagated plants, it exempts seeds saved from crop and requires further propagation to establish infringement.
VII. Farm Advantage argues congressional intent:
Farm Advantage’s complex legal analysis relies upon the determination of “congressional intent” as the tool for “statutory construction.” Farm Advantage argues:
1 The 1930 PPA and the 1970 PVPA are plant-specific laws that exclude plants from § 101;A- Therefore Pioneer’s utility patents on sexually reproduced plants are invalid; B- USPTO had no right to issue them;
2- other numerous amendments to patent laws confirm Congress’ intent to exclude plant life;
3- Committee reports and lawmakers’ speeches express that intent; and
4- FDA v. Brown & Williamson, decided by the Supreme Court in March of 2000, dictates that result here. In that case, the Court ruled that that the FDA had no authority to regulate nicotine as a drug or tobacco products as drug delivery systems. The Court reasoned that Congress must have intended to preclude FDA regulation authority because it enacted specific statutes governing tobacco and tobacco products.
The analysis uses “legislative history” to determine “congressional intent.” Farm Advantage contends that the Congressional intent underlying the 1930 and 1970 plant protection laws was to provide separate, different and exclusive protection for plants. According to Farm Advantage, the enactment of the statutes in 1930 and 1970 means that Congress intended to exclude plant patents for the bio-engineered corn seeds from §101 utility patent protection. Accordingly, the utility patents in the lawsuit are all invalid and the suit should be dismissed.
VIII. Pioneer Hi-Bred argues plain meaning:
Pioneer argues that the Supreme Court’s 1980 Chakrabarty decision trumps Farm Advantage’s analysis. Pioneer contends that:
1- the Chakrabarty decision reversed the pre-1980 presumptions against patenting life;
2- the Chakrabarty decision established the “plain meaning” of §101,
3- the plain meaning interpretation in the Chakrabarty decision gave broad scope to §101 so that any type of invention, not specifically excluded, is included within §101 and that plant patents are consequently valid (assuming they comply with other requirements of the patent law);
4- The plain meaning interpretation in the Chakrabarty decision obviated the complicated inquiry into Congressional intent underlying the 1930 and 1970 plant protection laws upon which Farm Advantage would have the Court rely; and,
5- the Chakrabarty decision legitimized the patent office’s issuance of Pioneer’s patents.
Under Pioneer’s analysis, the 1930 and 1970 plant protection provisions would supplement rather than limit the protections available to inventors of bio-engineered plants under § 101. For all these reasons, Pioneer argues that its case against Farm Advantage for patent infringement should proceed to trial for the usual determinations of patent validity, infringement and damages.
The irony is that the conservatives used congressional intent (the liberals theory) to limit the FDA’s regulation of tobacco in FDA v. Brown & Williamson. Moreover, the liberal dissenting justices used the plain meaning statutory construction to argue for FDA’s regulation of tobacco. Farm Advantage now uses the tobacco case to support its argument that §101 excludes plants from the proper scope of patentable subject matter. The role reversal in the tobacco case was situational and probably not a permanent ideological shift. The role reversal occurred because the FDA itself had taken the position over many years that it lacked jurisdiction to regulate nicotine in tobacco.
IX. The Government Supports Pioneer:
The Supreme Court requested the federal government to file a friend of the court (amicus curiae) brief. The Solicitor General has filed a brief vigorously supporting Pioneer’s position despite the fact that its position in Chakrabraty argued the reverse. In the Chakrabarty case, the Solicitor General argued against patents on bio-engineered bacteria. Now, the Solicitor General argues that § 101 covers patents on all life forms.
X. The Precedents:
The U.S. Patent and Trademark Office has applied the Chakrabarty ruling to issue sixteen hundred utility patents for plants by 1998. Presumably, there are almost two thousand of these plant patents by now. The district court upheld the issuance of such patents in the current case. The Court of Appeals for the Federal Circuit agreed. If the Supreme Court rules in favor of Farm Advantage, all these patents will be invalidated.
XI. The legal issue:
The outcome of this case will depend on whether the Court’s majority uses the statutory construction or plain meaning analysis. The conservative block (with O’Connor and Kennedy as likely swing voters) will likely revert to their plain meaning analysis in Farm Advantage to include plant patents within §101 while liberal justices would use “congressional intent” analysis to exclude plant patents from §101.
1-Will the Court determine the intent of Congress by analyzing the exact words (plain meaning) of §101 after 1980, as generally favored by the Court’s conservative justices?
2- Or will the Court determine the intent of Congress based on what Congress was thinking when it enacted the earlier 1930 and 1970 lesser plant protection laws, by resort to the complex legislative history, as generally favored by the liberal justices?
XII. Verdict cautiously predicts the Supreme Court will also uphold the issuance of §101 patents to protect bio-engineered plants based on Chakrabarty and a plain meaning analysis, notwithstanding the Court’s recent FDA v Brown Williamson decision. Verdict’s prediction is based upon the fact that the swing voters on the Court generally side with a plain meaning analysis in property rights cases. Verdict’s prediction is based on our analysis that:1-The decision in Chakrabarty has essentially decided the Farm Advantage issues 2-It used a plain meaning analysis that would aid Pioneer; 3- Most importantly, Chakrabarty got rid of the moral argument. 4- But Chakrabarty also involved: a- the same statute and the same section 101, b- much of the same legislative history, c- the same plant-specific statutes, d- the same tools for legal analysis, and e- the same economic incentives: support and reward innovation.
Some of these considerations may move one or more liberal members as well. If the Court were to reverse and hold for Farm Advantage, thereby invalidating utility patents on plants, it would have to find some way to distinguish the outcome here over the Chakrabarty case. Because FDA v. Brown & Williamson involves an entirely different statutory scheme, that decision is more easily distinguished even though it is more recent.
XIII. Why did the Supreme Court take the case?
It takes the votes of four justices to grant cert. Several factors weighed against the likelihood of “granting certiorari” (the term used when the Supreme Court agrees to hear a case). The Supreme Court ordinarily would not be expected to hear a case when:1- it will only affirm the lower courts; 2- when the USPTO has issued similar patents for 20 years on plants; 3- there is unanimity between the USPTO and the two lower courts; and 4- no conflict exists between appeals courts.
The grant of certiorari thus implicitly challenges the logic of Verdict’s prediction that Pioneer will prevail. There are two possible sources of four votes to hear it:
1- The conservative property rights justices may have voted for review believing the time is ripe to shore up and clarify the 5-4 decision in Chakrabarty; or
2-The moderate and liberal members may have voted to review in hopes of a reversal or to blunt the sweep of a “plain meaning” construction the majority is likely to apply.
The Supreme Court’s 1980 Chakrabarty decision that that §101 included patent protection for bacteria was by a 5-4 vote. The Court’s FDA v. Brown & Williamson decision in 2000 rejecting the FDA’s claim of authority over tobacco products was also 5-4. Law professors and legal scholars will be watching this case because so much is at stake:1- This case is not a financial dispute between Pioneer and Advantage: the legal fees have dwarfed the amount in dispute; 2- This is a small farmer challenging the theory that life can be patented; 3- If the farmer wins, almost 2000 existing patents could be invalidated; 4- This is a dispute that places two conflicting Supreme Court cases before the Court; 5- When the Court could have easily avoided hearing the case; 6- But voluntarily choose to hear it.
This case transcends the issues because at least four Justices have decided to fight it out philosophically with their Brethren. Under these circumstances, the outcome is far from certain.