Canadian Inventor Sues State Research Universities

I like to toss "seed lawsuit" in the google search bar on occasion to see what's going on in the world-at-large beyond the comfortable confines of my office here in suburban Memphis, TN. I came across a story that I have posted on the reciprocal situation in the past. This time a Canadian inventor company sued three state universities from infringement. Duh-duh-duh-duuun, the plot has thickened on the agricultural patent landscape, and now no one is safe.

The full story can be found here, but I will give you a summary of the article. A Canadian inventor, Soheil Sharafabadi, claims that the University of Idaho in conjunction with Oregon State University and Washington State University infringed upon his patent to create new varieties of higher-yielding mustard seed. Obviously this is much further back in the litigation food-chain than a brownbagging case, as we have competing researchers claiming a "cheat" much like the ballyhoo of Irish in response to the Thierry Henry hand-ball situation.

Sharafabadi (more fun to spell than you think) claims that the research universities used his 1990 "Psuedoplastic Yellow Mustard Gum" patent in the development of U of I's new mustard seed varieties. Through his July 23, 2009 complaint, he claims that Idagold (developed by U of I) as well as more than two dozen other mustard seed varieties were developed by his patent. According to the article and Sharafabadi, the actual patented process consists of boiling the seeds to extract the "gum" or mucilage, which he claims is preferable and used by the Universities due to the alternative taking more time for extraction. The mucilage promotes water storage and germination that can lead to higher yields.

As a commenter noted on the article that at first blush the reporter makes this sound as if the Universities stole patented seeds and developed new lines, but rather this is purely a process patent infringement issue as noted in the previous paragraph. So, its not quite the "Escape from L.A." post-apocalyptic anarchy I foreshadowed in the beginning, but it is a slight twist of the stories that I have presented before.

This does not seem to be Sharafadi's first bout over his 1990 patent as can be seen on this website that seems to be set up by him himself, where it is claimed that there was some sort of plagiarism at the University of Manitoba by a Ph.D. candidate. The website is slightly disjointed and rather difficult to muddle through, but there is a letter by Sharafabadi explaining the educational deprivation that plagirism will bring upon the Canadian universities. Either way it seems a 1990 invention has brought Mr. Sharafabadi a 20 year plus fight.

Comment Period extended for High-oleic acid soybean

Animal and Plant Health Inspection Service (APHIS) has sent out notice that it is extending the comment period for Pioneer Hi-Bred International's high-oleic acid soybean petition for nonregulated status. The original petition that was posted to go with the initial period was found to be the incorrect petition, so the comment period has been extended to December 28, 2009. The comment period is also extended for the Environmental Assessment (EA) and the Plant Pest Risk Assessment. The Federal Register notice from October 26, 2009 is posted here.

Mexico Issues First GM Corn Permits

According to a Reuters article from last week, The Mexican Agriculture Ministry will issue two permits to grow experimental plots of GM corn in regions where there are no native corn varieties. This will put the "birthplace" of corn in the hotbed of controversy over GM foods, but many feel it will help with productivity. The article further states that some Northern Mexico farmers were getting in the game early by illegally growing GM corn prior to any government approval of permits. Supposedly, thirty-five businesses have applied for the permits, including Monsanto.

This battle has gone back over the years, as it was always acceptable to consume GM corn in Mexico, but not plant or grow it. It was said that many farmers ignored this and planted the seeds anyway therefore causing an unintended spread of GM corn within Mexican fields. The report that is the centerpiece of this 2004 Washington Post article states that the proliferation of GM corn in Mexico was also contributed to cross-pollination (a.k.a. genetic drift). That about scares the hell out of most, so its understandable way many fears begin to align in these debates. We'll see how this further develops as this process gives us very interesting insight into the development of biotech plan and attitude that swirled by many of us in the US.

Consumer Choice sends Monsanto's Roundup Ready Sugar Beets back to the Deregulation Drawing Board

The Northern District of California handed down a ruling in Center for Food Safety v. Vilsack, No. C 08-00484 JSW (N.D. Cal September 21, 2009) that would requires the USDA to perform an Environmental Impact Statement (EIS) as opposed to an Environmental Assessment (EA) in their determination of whether to deregulate Genetically Modified Sugar Beets (known as Event H7-1). The court procedurally granted plaintiffs' motion for summary judgment and denied Defendants' cross-motion for summary judgment in order to line up its decision with the Geertson Seeds decision out of the Ninth Circuit regarding Roundup Ready Alfalfa.

The actual technology would make the sugar beets glysophate tolerant, which is similar to roundup ready alfalfa technology in the Geertson case. APHIS created an EA in response to the application for deregulation and reached a Finding of No Significant Impact (FONSI). The Court reasoned that the decision not to use the hard look of the EIS was arbitrary and capricious as there was evidence acknowledged by the agency, but cursorily tossed aside, that proved to be "significantly effect" the human environment as stated in the the procedural statute the National Environmental Policy Act (NEPA) .

The determination of whether an impact is significant will be determined by the context and intensity or severity, as it is defined by factors in 40 CFR 1508.27. The analysis of these will be reviewed by the judiciary under the APA's arbitrary and capricious standard. As stated, the Court found the Agency's conclusory statements regarding severity to deifferent factors arbitrary and capricious and ruled against it.

The evidence the court pointed to was the difference in opinion regarding length of time sugar beet pollen that can be carried by wind or animals was viable and the distance it could travel. In the related point that the Court considered significant was the socioeconomic effect on organic farmers or simply non-GMO farmers if genetic drift were to occur and consumer choice, if there is a significant limit of non-GMO sugar beets used in the market. Defedants countered that there was no real organic sugar beet market and that they simply do not have to take socioeconomic factors into the analysis of whether to issue an EIS. Obviously, the counter-arguments did not win the day. The Court reasoned that the socioeconomic and consumer choice factors were interrelated, if not a diresult of, the environmental factors that must be considered, and therefore carry as much weight.

Simple to this analysis is that consumer choice will be taken into account in the Ninth Circuit (if not elsewhere based on the focus of natural and organic products), and the skepticim especially abroad of GMO seeds should send a message to just use the EIS and scrap the EA in assessing deregulation possibility as of right now.

Don't Gulp the Force Majeure De Jure - a cautionary tale

Recently I read an article on Farm.com by Stu Ellis that was sent out by a colleague regarding the effect of COOL and H1N1 on vertically integrated livestock agriculture. There has been large scale unprofitability in the pork market due to increased food inputs and a decrease in exports attached to the misperceptions of the H1N1 virus based on its more common nomenclature of "swine flu". According to the article, there has been reported losses by the

Iowa State Economists for 18 months in the pork market. Naturally, there is a push down the chain effect as these vertically integrated businesses are set up through production contracts with hog producers that are minimally negotiable. In these contracts there is a "ForceMajeure" Clause, a.k.a. "Acts of God." The secondary name is slightly misleading as a forcemajeure clause can typically cover many things that typically wouldn't be attributed to a diety, such as a changes in law, regulations, riots, and coups. The clause is anticipated to cover extraordinary situations that are beyond the control of the parties and would frustrate the purposes of the contract. These clauses are typically enforceable unless it can be shown that the the use of the clause was overreaching or unconsciousable (a legally defined term).

The panic around the H1N1 pandemic and the push of COOL are now being used as rationale to repudiate contracts through the force majeure clauses, which is a major concern in the livestock sector as there is a lack of insurance options that can be found in row cropping operations. The pork integrators have either repudiated the contracts or simply renegotiated a new contract based on there being a "frustration of purpose" (another legally defined term) in implementing the original contract based on the terms as they were drafted. Some scholars argue that the renegotiation aspects is not typical of use of the force majeure clauses. However, tobacco contracts that were considered void by one party through a force majeure clauses were renegotiated based on price terms in the past. Therefore that behavior has been accepted in general agribusiness dealings beforehand, whether a court would enforce that is still unclear as I can assume that many producers simply took the lower renegotiated price.

Now there are a few concerns I have regarding the whole situation of H1N1 and COOL being used under a Force Majeure clause triggering occurrence, even if there is language in the forcemajeure clause speaking to changes in regulations and legislation.

1.) These are market aberrations directly linked to the product, which can be broadly anticipated by the very participation in a fluid market. A Force Majeure typically covers things such as catastrophic crop damage, earthquakes, four horseman, and rain that forces you to grab two of every animal.

There is an obvious counter in that if the market shuts down where the goods were anticipated to go due to back-to-back contracting (Having a sales contract in place to hedge a production contract, where you as a merchant or integrator are the middle person) than there would be a frustration of purpose of the overall operation that the production contract is just merely one aspect. However, I would argue that unless there is explicit language created a escape hatch for the integrator based on the frustration of purpose in another contract or there is precondition that the "non-producer to integrator" back-to-back contract must be enforceable. More concisely, a force majeure clause should only pertain to events that frustrate the contract that is subject to the clause, not to the entire market unless that is explicitly stated in the contract.

2.) In line with the lack of insurance available to livestock producers, there also seems to be a lack of any traditional or spot market outside of the contracts where the pig producer could sell the pork. Therefore, the unconsciousability could be used in the new offer to renegotiate as there are no viable alternatives to the producer at the time. This argument would obviously depend on the other clauses of the contract and the state where it is brought as contract laws vary from state-to-state.

The market would only be a concern if the integrator repudiates the contract and abandons the hogs or signs over title to the hogs to the producer. However, the market is still virtually unavailable to go at it your own if you are a hog farmer which would still allow anunconsciousability argument for any renegotiation.

3.) The contractor's lien spoken of in the article should be expanded and enacted in all states that there are a multitude of vertically integrated agriculture. These producers are purely service providers, much like a mechanic, where they have a temporary possessory interest in the goods (hogs in this case) but do not have actual title to the animals. As long as the producers actually file these statutory liens it could be effective means, so long as there is some form a non-retaliation provision for enforcing statutory rights.

****I put this on the seed law blog since many seed companies are going into new areas through use of production contracts and crops that will not have subsidized crop insurance, therefore no crop insurance may be covering the product as many contractors will say "give me whatever you produce as we need to use it all so that we can ramp up production." This is where I implement this cautionary tale due to the increased used of GM seeds and the constant back-and-forth on the general acceptance of GM. So:

1.) Please read the contract and understand it. Have an attorney trained in these type of contracts to take a look to help with the understanding. I understand this can be pricey, but if you are undertaking a huge obligation in your business (you be the judge), please seek assistance in understand the legally defined terms.

2.) You may be able to negotiate the contract much more than a vertically integrated hog producer without having the other party walk away from the table.

3.) Make the expectations and clauses known in the contract to avoid future surprise - it will save money and hurt feelings, as well allow the parties to truly assess liabilities. In other words, Be a Straight Shooter.

4.) Get to know your rights if there is future communications where the other party tells you want the contract means, and you take it as a surprise.

Don't be afraid of taking advantage of opportunities for new markets or technologies, but please make informed choices or you may be eventually visiting another type of attorney - a bankruptcy one.

Has Consumer Fear Truly Halted Genetic Engineering?

A recent article out of the trade journal Nature Biotechnology, according to seedquest, states that the failure of certain genetically engineered traits to make it to market such as nutritional content, ripening control and processing attributes to reach consumers and processors was due to a failure in the European regulatory regime to allow these products to make it through the approval process. It seems that the sell of herbicide resistant and insecticide resistant were much more successful as the regulatory channels allowed these to go through a relatively easy process and were accepted by the end user - the farmer. Without going into the developments of the regulations themselves, I believe there exists a natural inquiry into this tale - why? Some of the summary of the argument presuppose that the problem arises because the latter benefits were researched and developed during the infancy of agricultural biotechnology.

I believe this is attributed to the basic disconnect between consumers and consumers and producers and/or production methods. The perceived end user for an herbicide resistant soybean would be the consumer as they would be given a cheaper price for soy products due to the possibility of increased yield as it knocks out a predator from depleting the volume of soybeans produced on the same amount of acreage. However, on a practical level, it would seem the consumer does not notice the difference in food prices unless there is significant magnitude in the change. Therefore the true sell would be to the producer as he/she would be the one dealing with the pests that the consumer would never even know about unless there is significant change in the price as they are so far removed from the production of the soybean.

The case is not the same for GM nutrition traits as the true customer would be the consumer as it does not seem to solve a problem for the producer. The technical problem being solved would be a nutrition deficiency or a convenience to obtain nutritional benefits from the product. Allan Bennett, a professor at UC-Davis professor, stated "It had been hoped that these products would directly benefit the general public and change the public perception of agricultural biotechnology". This mentality would be the reason there is opposition from the customer, since many may have not seen the problem beforehand or even recognize the nutrition deficiency as an issue, unlike the producers dealing with crop pests. Therefore the groundwork was never done to create "public" acceptance of the GM benefits as there was never a problem or a recognized problem as it wasn't a generally accepted problem.

I would suggest the regulatory regime is merely a reflection of biotechnology market assuming that there product would be accepted without doing the groundwork of showing how the GM nutritional traits would solve a problem or create a convenience for people that should be desired. It would seem that many developers just assume that there is benefits in the development of these traits and the general usefulness of the technology. GM needed a better marketing and advertising campaign showing the benefits and easing fears for these more direct consumer traits from the get-go, which would have taken pressure off of the regulatory regime and allowed quicker approval without as much mainstream skepticism.

Therefore, the I would venture to say that the regulations were not the true cause of halting "direct benefit to consumer" GMs, but the way they were marketed to the public. The fear of the public, caused by a non-recognition of the benefit as opposed to percieved cost, created a stringent beuracracy.

Tobacco may Help Diabetic Patients in the Future

SemBioSys Genetics Inc., out of Canada, was granted U.S. patent number 7,547, 821 entitled"Methods for the Production of Insulin in Plants". A similar patent was granted in Europe last year, and there are patent applications submitted in a multitude of countries worldwide according to the official company press release. The ever-increasing obesity problem that is facing the United States virtually guarantees great success on the patent as plant production is considered the fastest and cheapest methods of reproducing proteins. They will have a lock on the commercialization processes of this plant production method, I bet you wish you would have wanted to know this before its IPO last week.

From the abstract of the Patent "Production in seeds offers flexibility in storage and shipment of insulin as a raw material, and insulin retains its activity upon extraction from stored seed. Further, the amount of biomass subjected to extraction is limited, due to the relatively low water content of plant seeds." The benefits also include the cost factor in production as the scientists do not have to spend tons of money on generating the proteins within labs in small quantities. There is one aspect of the work that seems to worry me based on language in the patent. The claims of the patent seem to use tobacco, as it is typically an easy plant to use due to its regeneration and large pours that let you pop those proteins right out of the leaves in a vacuum chamber. However, it seems that the inventors would prefer to use the Arabidopsis (first plant that had its genome sequenced due to its simplicity), flax plant, or safflower. I am not sure the reason to steer away form tobacco, as it works well in demonstration scale tests, but perhaps its the perception, cost, complexity of the plant, or a host of other factors in which a learned expert in science or business could provide illumination.

This preference for other plants besides the Arabidopsis concerns me, as I believe it will give it a tougher time through the regulatory channels that transgenic crops must go through with APHIS and FDA. No one is much on tobacco, even smoking "unprocessed" tobacco is odious and the demand for consumption of Arabidopsis is virtually non-existent, so there would be no concern of these seeds getting into the food supply as there is no channel for these seeds. However, flax is being used more and more as an alternative to "traditional" foods with its presumed or known health effects, and safflower is used in vegetable oil and salad dressings. I believe this could cause more obstacles than need to be there during the regulatory phase as well as the possibility of public relations problems. This push-back from segments of the public can be seen in the opposition of corn's usage in pharmacropping.

I will continue to follow the progress of this company's patented invention as it continues its clinical trials and comment on the legal steps it will take and possible ramifications of actions taken while attempting to install it into the commercial chain.

I want to comment, and give credit, on where I get my base information to run off with into fanciful flights of legal discovery and opining upon all things seed. Please visit SeedQuest as they provide far more of an overview of the seed industry than my blog ever could, as they should. Another great resource for topic ideas and the most comprehensive blog regarding the extremely broad field of agricultural law is a combined effort of the National Agricultural Law Center and the American Agricultural Law Center, which can be found here.

-Craig

When can a Farmer Legally Save Seed?

This post was inspired by a news report on Seedquest and a portion of the movie Food, Inc. that focused on Maurice Parr a traveling seed cleaner in the Midwest that was accused of assisting in the unlawful resale of patented seeds. Many people are attempting to save seed in these economic times as a way to cut cost, however there is some considerations you have to keep in mind regarding the legality of that action especially as more groups are enforcing their rights through U.S. patent laws or the Plant Variety Protection Act (PVPA).

In regards to patented seeds these are typically protected as Utility Patents, administered by the USPTO, which allows the patent owner to exclude others from making, using, offering for sale, selling, or importing, the protected seed for a period of 20 years. Diamond v. Chakrabarty, 447 U.S. 303 (1980), broadened the scope of patentability to "anything under the sun that is made by the hand of man," which included living organisms. An asexually reproduced plant, excluding tubers, can also be protected by a Plant Patent, also administered by USPTO, which gives the patent owner the right to exclude others from reproducing, selling, or using the plant for 20 years. The defenses, such as the experimental use exception, to patent infringement are narrowly tailored and will typically require great expense to present, so you are better off not attempting to save this seed at all. The main thing the farmer needs to know is the contract or license language that prohibits the saving of the seed, which should be heeded as any violation of this will constitute a breach of the license and actionable infringement.

The Plant Variety Protection Act, administered by the USDA, offers two exemptions to the granted exclusive rights of the certificate holder. The PVPA covers sexually reproduced seeds that are "new","distinct","uniform" and "stable", and grants the certificate holder the right to exclude others from selling, marketing, offering for sale, reproducing, consigning, exchanging, importing or using a variety in the production of a hybrid or different variety for 20 years. One exemption to the exclusive right is for breeders or researchers to use the seed in developing a new variety, and the other exemption is for farmers to save seed for replanting if they lawfully purchased the seed. This latter exemption does not give the right to resell the protected seed, but only for replanting for personal use, or get one "off the hook" for purchasing unlawfully sold seed. Please see the ways to identify the PVP seed has been certified and lawful by the Kansas Crop Improvement Association here.

Note: Please be careful, as US law allows double protection through a patent and PVPA certificate if the owner desires and the "invention" qualifies.

The saving of seed of the now limited Public Varieties, is of no consequence to the farmer as they are not afforded any protection unless there was some contract the farmer may have entered into himself for the purchase of the seed. However, this is highly unlikely. This seed can be saved, but please remember practical considerations such as the germination rate that will be of value to you that can be checked at the State Seed lab (Some states its an independent body, university, or the Crop Improvement Association) or can be handled by seed cleaners, like Maurice Parr, who will have the germination checked, clean out the debris from your seeds, and bag it for you.

Please remember form previous posts located on this blog that public varieties are much more limited, as research budgets have swell at the universities as the demand for technology has increased in the recent years, thereby increasing the amount of varieties gaining protection. In addition, groups that traditionally were not enforcing their rights are now beginning to bring suit and enter into hefty settlements as money is thinning.

To avoid potential trouble, please do a little homework on where you got the seed, whether it is protected, and what kind of protection the seed has: patent or PVP certificates, or both. In addition, check any contract you may have signed and its provisions regarding left over or second generation seeds.

More on KSU Plant Variety Protection Infringement Settlement

I mentioned in last week's post regarding a lawsuit filed by South Dakota State University over wheat varieties, a lawsuit that was settled between the Kansas State University (KSU) and defendant farmers. I stumbled upon an article from the Salina Journal of Salina, Kansas that goes into the situation a little more in-depth and I wanted to add a little commentary.

Once again the central tenet behind these large research universities bringing suits is the frustration of neighbors who see the perpetrators as stealing from the community chest. This community chest is funded through public dollars and payments into the Wheat Checkoff program, which has recently gone up to $0.015 per bushel and should generate about another $1.5 million from wheat farmers. This money is needed as states across the country become cash-strapped and the technology demand is increasing in wheat. The overall spending by the University of its budget has went up 3% to 11% over the past 10 years, but the state funding has not been able to keep pace.

An interesting point in the Salina journal article was that some believe that the payments through the checkoff program brings about the mentality that "I already paid for it, so I should be able to do what I want with it." I hope this is not true, since we have all been conditioned to make our annual penitence payment to the IRS and do not demand to be able to do what we want with the public goods such as roads or parks. Through this and other actions of paying taxes, we as a society get the point that somethings you "pay" for are not exclusively yours to exercise your control over at the expense of others.

The increases in expenses and the ability for to make a profit to dump back into research has led many research universities to have closely connected businesses that they will grant exclusive rights to commercialize or outright assign the patent or plant variety protection certificate. This allows for money to be made by the University through the assignment of contractual rights and by a company who now has the right to commercialize and market the technology. It is in these steps that may get many farmers in trouble, as many research universities once upon a time exclusively put out public varieties, which can still be done today after the PVP certificate or patent expires. This was done as the University was to be working in the public trust and therefore should disseminate the product to whoever wants it.

Due to different times and circumstances, I personally believe that this can still be said, the Research Universities are still protecting the public trust through legal protection of their seeds. The legal protections allows a profit to be made, which allows the University research foundations to fund new wheat varieties that can be funneled back out to the farming community. The brown-bagging of seeds could raise the cost, but it could potentially stall research, hence why these certificate owners must protect the varieties and many will contractually hold themselves to do so through exclusive licenses. These actions benefit the farming community as a whole, despite the ugly sound of an organization that works on behalf of the citizen and citizen farmers suing the one of those citizen farmers. In the instant litigation, the complaint alleged that the unauthorized selling of the protected varieties could have led to the harvesting and replanting of 4 million fifty-pound bags of seed within five generations. That is evident how the theft of this technology can put a huge hindrance upon the ability of the creator to generate money upon its invention to make more inventions, much liked a leaked copy of a movie on the Internet will decrease the income of the production company upon the opening in the theaters.

As for the case itself, the details of the settlement, which occurred within a month of filing, were not de minimis in any sense as the the Stockton, Kansas farm family settled for a monetary award of $150,000 with the Kansas Wheat Alliance, Kansas State University Research Foundation and WestBred, LLC who had joined the case as a co-plaintiff due to one of its seed varieties also being sold without authorization. In addition, according to Seedquest, the defendant farmers gave the right to KWA and WestBred (now a Monsanto Co. after a recent acquisition) the right to inspect all of the family farm business and farming records and premises for the next 3 years for possible violations. If any violation is found, the farmers must pay $35.50 for every 50-pound unit of seed they sell. This creates a liquidated damages clause for any future violation and creates a probationary period for the Stockton, KS farm. This will reduce cost on any future claims that may have to be brought on behalf of the Plaintiffs,.

There is an educational effort being brought together by multiple partners regarding protected varieties through the Farmers' Yield Initiative - check it out.

Monsanto not the only one suing over IP rights

There seems to be constant controversy over larger companies suing farmers for intellectual property infringement, however, Monsanto and the big boys of seed are not the only racing to the courthouse anymore.

A lawsuit was filed today in Sioux Falls, South Dakota by South Dakota State University claiming that five producers violated its plant variety protection (PVP) certificates on spring wheat varieties Traverse and Briggs by knowingly selling or offering to sell without authority, a seed dealer's license, or proper seed certification. This practice of reselling seed is also known as brown-bagging and is violative of the PVPA as the farmer is selling seeds that he does not have permission to sell. Other large research universities, such as Kansas State University, Colorado State University, Oklahoma State University, have been more dogged in enforcing their IP rights through PVP certificates or patent protections, claiming that the proliferation of brown-bagging is leading to a decrease in research funds thereby hurting the dependent farming community as a whole.

These lawsuits are serious matters, as one lawsuit in Kansas resulted in a $150,000 agreed judgment against a producer. It also does not curry you favor with many neighbors who believe you are holding up research on new technology coming out of the large state-run universities that will work with the Crop Improvement Associations in providing limited amounts of public seed.

Interestingly, but not connected in anyway, these lawsuits come on the heels of Monsanto delving further into the wheat world by acquiring a smaller company Westbred in the Upper Midwest. I only mention this, because there probably would have been more of a public outcry if these producers alleged to have brown--bagged seed were sued by one of the larger seed/chemical companies.

Companies, institutions, people spend money, lots of it in many cases, to bring a product to market whether it be for purely profit or innovation's sake. Virtually all will file for protections that have been created by our Constitution or by statute in order to protect their right in the product from someone who did not put the time and money into research. No matter the size, or policies one may believe in regarding IP rights whether on products or life forms, the right to protect your property through the courts is fundamental to our economy and society. Actually, the reason for allowing suits for conversion (civil theft essentially) was to avoid the result of individual's taking justice into their own hands or being bullied by the offender. In that mindset, ironically, one of the most civil and socially acceptable actions you could commit in our society is by taking a dispute to the Courts.

Regardless if you are South Dakota State University, Monsanto, a small seed company, or the guy/girl that created the slap-chop on late night infomercials it is important for that individual or company to enforce any IP property rights that they took the time and trouble to obtain through these suits in an effort to keep structure in the system, as well as deter others from stealing someone else's idea. I understand its not always black and white in these situations, and that the majority of individuals or farmers are not committing these violations, but it is important to send a message to that very small minority that are causing a loss of money to research and undermining a private property system.

APHIS seeks comments on Genetically-Engineered Draft Standard

USDA-Animal and Plant Health Inspection Service (APHIS) is seeking comments until August 3, 2009 on its draft audit standard for the pilot Biotechnology Quality Management System (BQMS).

BQMS is a voluntary program that aims to enhance compliance with regulations for field trials and transportation of certain GE organisms, by compiling draft standards that utilize current regulations on environmental releases, importations and interstate movements. APHIS selected five participants in September, 73 Fed. Reg. 51266, for the BQMS pilot program that have applied the draft audit standard to their organization's regulated biotechnology program to plan, implement, document, and examine the efficacy of quality assurance and quality control measures related to introductions of regulated articles.

APHIS is seeking comments on the draft audit standard that is currently in use in the pilot program as a whole, and specifically Requirement 7 regarding critical control points for the introduction of regulated articles by developing containment procedures for regulated articles; developing measures for the identification of regulated articles in storage, being moved, imported, or transferred, and in field locations; developing procedures for planning and monitoring environmental releases of regulated articles; developing methods for post-harvest handling activities and methods to maintain the identity of regulated material; developing procedures for the devitalization and disposition of regulated articles; as well as developing procedures for the submission of regulatory compliance incidents to the appropriate regulatory authorities.

The specific questions to submit comments are:

1.) Does Requirement 7 cover all areas required to comply with 7 CFR Part 340?
2.) Is the draft audit standard consistent with current best practices for the regulated commodity?
3.) Are there identifiable incentives to encourage participation in the BQMS?
4.) Is the flexibility to apply to any organization apparent in the draft audit standard?

The notice can be found in the June 4, 2009 Federal Register at 74 Fed. Reg. 26831. A copy of the draft audit standard can be downloaded as a PDF from here!

North Dakota State Seed Commissioner warns of seed law violations.

As reported by North Dakota State University and Seedquest, the North Dakota State Seed Commissioner, Ken Bertsch, cautioned individuals to avoid seed law violations in the purchase and planting of protected varieties.

The prevalence of new technologies in the industry has led to more variety protection therefore, knowledge and adherence to seed laws becomes imperative for growers, seed conditioners and producers who maintain stocks of protected varieties of all types. Varieties protected by Plant Variety Protection (PVP) Title V can be sold only as a class of certified seed as will be designated by the individual states. Even those protected varieties outside PVP Title V purview, can only be sole with approval from the variety owner in the form of a license or some other IP rights granting agreement.

"In general terms, unless the seed being purchased is accompanied by a certified, registered or foundation class label or comes from a reputable dealer with authorization from the owner to market the seed, you shouldn't purchase and plant the seed," Bertsch says. "Brown-bagged seed isn't worth the risk and everyone involved in the transaction is a part of that risk pool."

As stated Bertsch cautioned to obtain seed through legal channels as it ensures all the proper rights are granted and applicable laws are applied. Brown-bagging or illegal transactions typically farmer-to-farmer does not have the ability to make these guarantees and can lead to fines levied by federal and state agencies from anywhere between $250 to $5000.

However, the kicker is the fact that the violation could potentially be used in civil infringement suit by the rights-holder of the illegal use of the protected variety. The damage award can be up to treble damages of the seed sold and grain derived from the planting. Seed Quest states that the violations of PVP and labeling laws have resulted in fines and fees upward of $50,000.

Bottom line – Learn the seed laws applicable to your enterprise, federal and state, and follow them as the initial fine may not be seem steep, but can quickly turn into much more. If you are found to be in violation of a seed law, please consult with counsel, preferably those familiar with the industry and agencies involved, in order to weigh out the options as there may be potential settlements with government agencies without an admission of guilt or some other more amicable alternative.

Deregulation of Genetically Engineered Plants by APHIS

The Animal Plant Health Inspection Service (APHIS) regulates genetically engineered (GE) products and/or organisms along with the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA) depending on application or use. APHIS’ Biotechnology Regulatory Service (BRS) handles much of the actual permitting and notifying for transportation and interstate commerce of the GE products. Enough acronyms for now, essentially this post will show you how to petition for deregulation of a GE product or organism and what should go into the petition. As of the current date, APHIS has deregulated 75 GE products according to a press release deregulating GE cotton, found at http://www.aphis.usda.gov/newsroom/content/2009/05/cottonge.shtml .

So you find yourself having to fill out permits or notifying APHIS ever time you need to transfer your GE article even though you know its not introducing any plant pests or new plant pests that other organisms already bring into the environment. Well, there is two ways to be determined deregulated for purposes of permitting and/or notification procedures: submitting a new petition or submitting an extension to determine nonreglation base don an antecedent organism.

Submitting a Petition – The Long Haul

We will look at the first method of petitioning first as it will be more applicable for more novel scientific endeavors. The regulations located at 7 CFR 340.6 lay out the steps that need to be taken to petition the Administrator of APHIS for deregulation of a genetically engineered article. APHIS requires the petition to conform to the following format:

Petition for Determination of Nonregulated Status

    The undersigned submits this petition under 7 CFR 340.6 to request that the Administrator, make a determination that the article should not be regulated under 7 CFR part 340.

(Signature)_______________________________________________________

A. Statement of Grounds

    A person must present a full statement explaining the factual grounds why the organism should not be regulated under 7 CFR part 340. The petitioner shall include copies of scientific literature, copies of unpublished studies, when available, and data from tests performed upon which to base a determination. The petition shall include all information set forth in paragraph (c) of 7 CFR 340.6. If there are portions of the petition deemed to contain trade secret or confidential business information (CBI), each page of the petition containing such information should be marked ``CBI Copy''. In addition, those portions of the petition which are deemed ``CBI'' shall be so designated. The second copy shall have all such CBI deleted and shall have marked on each page where the CBI was deleted: ``CBI Deleted.'' If a petition does not contain CBI, the first page of both copies shall be marked: ``No CBI.''

    A person shall also include information known to the petitioner which would be unfavorable to a petition. If a person is not aware of any unfavorable information, the petition should state, ``Unfavorable information: NONE.''

B. Certification

    The undersigned certifies, that to the best knowledge and belief of the undersigned, this petition includes all information and views on which to base a determination, and that it includes relevant data and information known to the petitioner, which are unfavorable to the petition.

(Signature)_______________________________________________________

(Name of Petitioner)_______________________________________________

(Mailing Address)_________________________________________________

(Telephone Number)_______________________________________________

As stated in Section A of the Petition there is required data that must be submitted in the petition. You must:

(1)  Submit a biological description of the unmodified recipient plant and information to identify narrowest taxonomic group of the recipient plant. This is the host plant as in the case of the deregulated cotton, it would be the cotton and the information concerning its narrowest taxonomic identifier;

(2)  Provide relevant experimental data and publications that will give an overview of the GE article, including published and unpublished studies ad tests;

(3)  Describe in detail the “ingredients” of the transformation of the unmodified organism into the regulated GE article including, the differences in genotype, any scientific or common name, as well as locality of the collection, development and production of the: donor organism, vector or vector agent, the inserted genetic material, and the regulated article. Be specific and transparent in these descriptions and remember to label “CBI” if you do not want your trade secrets in the public domain;

(4)  Describe in detail the phenotype of the regulated article, while paying attention to the known and potential differences with the unmodified organism that would show that the GE article poses no greater plant risk than the unmodified organism. You should discuss plant pest risk characteristics, disease and pest susceptibilities, expression of the gene product, new enzymes, changes to the plant metabolism, weediness of the GE article and its possible effect on other plants, transfer of genetic information, environmental effects, and other relevant information that stays within the scope of the showing that the GE article poses no greater risk than the unmodified organism; and

(5)  Provide Field Test Trial reports done under a permit or notification procedure that were done prior to the petition for nonregulated status or a submission for determination of nonregulated status based on an antecedent organism, which is a reference point organism that has already been determined nonregulated.

Filing and Administrative Steps

The Petition is then submitted with a copy to the Administrator at the address specified in the regulation, where it is stamped filed and assigned a petition number that will be used for all business related to the petition. After the filing, APHIS will publish a notice in the Federal Register.

The notice will specify a comments period for 60 days, where the agency will accept comments from any interested person and will utilize them to make a determination. The determination by APHIS will be made 180 days from the “receipt of the completed petition,” and it will either approve in whole or part or simply deny the petition. The petition will then be placed in the public petition file where it can be viewed.

Any person denied may file an appeal within 10 days of receipt of the written denial stating the facts and reasons for the appeal, including any after acquired information that could lead to an approval. This appeal is more or a re-petition as it goes back to the Administrator.

Requesting an Extension – The Express Lane

The second and more streamlined version for deregulation is employed if there is already precedent for deregulation of a similar article. You would request an extension of deregulation determination of an antecedent organism in order to cover your GE article and provide information showing the similarities based on similar criteria as set forth above in the petitioning section. However, unlike the petition there are no mandatory submissions.

APHIS will make a preliminary announcement in the Federal Register of an extension of the determination of nonregulated status 30 days before it is to become final and effective. The 30 days provides a cooling off period to allow other information to surface that may result in a denial of the extension.

If your request is denied, you can submit a modified request based on the rationale for the denial that will be received in the written denial or you can venture down the longer and more arduous process of filing a petition.

Afterthoughts

Although this may get you deregulated by APHIS, please remember that there are independent procedures for the EPA and FDA. I will attempt to discuss those in a later post.

 

Federal Seed Act Labeling Requirements

The Federal Seed Act, 7 USCS § 1551, et. seq., is the starting point for compliance as it is akin to the truth-in-labeling law. The purpose of the Act, which has state counterparts that may require more disclosure or standards, is for everyone to know what is exactly in the bag. The Act generally applies to any vegetable or agricultural seeds, including lawn and forage seed, that are shipped in interstate commerce or will eventually be shipped in interstate commerce.

Labels are to be affixed to the containers or bags that inform the agricultural seed buyer of the name of the kind or kind and variety and percentage of each present, the lot number, origin if the Secretary believes this information is pertinent and is in excess of 5% of the whole, percentage of weed seeds and noxious-weed seeds, kinds of noxious-weed seeds and rate of occurrence which cannot be outside the acceptable standard, percentage of inert matter, percentage of weight of agricultural seeds not specifically labeled. Additionally, for any seed in presence of 5% or more, the percentages of germination and hard seed along with the month and date of such test that must be completed in the preceding five months. Most states have a seed lab that can help you with this last step. Additionally, there are private seed labs that also perform these tests. Last, but not least you must provide a name and address of the person who transports or delivers the seed or the person who is receiving the seed plus a code designation identifying the transporter.

Vegetable seeds are divided on whether the containers weigh one pound or more and one pound or less to determine the amount of disclosures required to be on the label. Both require names and percentages, hard seed and germination percentages, as well as identifying people to link the seed, but the one pound or more designation requires a lot designation similar to agricultural seeds.

All disclosures must be truthful, and evidence any form of treating the seeds may have received along with the generic name of the treating agent and whether it is safe for humans and animals. Any mercurials or toxic substances must follow the “Poison” label guidelines.

Violations of these labeling requirements can result in misdemeanor liability and civil fines, as well as a possible seizure of any mislabeled seed.

This post will get you into the ballpark of proper labeling. However, each state has its own accepted guidelines regarding allowable percentages that must be consulted before shipping to these states.

Introduction

This blog is meant to put out ideas and allow discussion about concerns facing the seed industry generally and individuals within the industry. The topics can cover issues regarding compliance, contracting, IP, start-ups, environmental concerns as well as a host of other interests and areas of concern that seem pertinent to the trade. Please enjoy and feel free to comment.