Tuesday, October 21, 2014

Expiration Date

**The following article raises many questions around patent expiration. A lot of work is being done on this issue by industry so watch for more on this topic and the progress being made in the June issue of Seed World.

The expiration of Monsanto’s Roundup Ready patents in 2014 is creating a wave of discussion and confusion in the seed industry, and is raising new questions for the entire sector.

In 2014, the last of the Monsanto’s Roundup Ready U.S. patents will be expiring. During the term of these patents, Monsanto has had the exclusive right to exclude others from making, using, offering for sale or selling the protected technology. Once these patents have expired, in theory, Monsanto will no longer have the right to exclude others from the protected technology. However, the regulatory mechanisms that must be maintained for the commercialization of the Roundup Ready traits may make it difficult for others to make, use or sell products incorporating the protected technology after the patents have expired.

The agricultural industry has tackled a variety of issues over the years, but no issue has produced as much discussion and confusion as the expiration of Monsanto’s various trait-based patents in the next couple of years. The expiration of Monsanto’s Roundup Ready or glyphosate patents creates interesting new questions for the industry.
• Will the expiration of the Roundup Ready patents lead to generic Roundup Ready seed in the U.S. market?
• Who will pay for the maintenance of the regulatory approval in the United States and world-wide?
• How will the expiration of the Roundup Ready and other trait-based patents affect the import and export of seed in the U.S. marketplace?

Regulatory Background 
According to the United States Department of Agriculture Economic Research Service’s website, of all crops planted in 2011 in the United States, GM soybeans, corn and cotton accounted for, respectively, 94, 88 and 90 percent of these crops planted. Other GM crops such as canola, sugar beets, melons and peppers have taken off as well.
Fortunately, the United States has a solid regulatory system—most of the traits that are incorporated into GM crops are required to be regulated by USDA, the Environmental Protection Agency and the Food and Drug Administration. The USDA regulates the development, transportation, testing and disposal of plant material as an agriculture product.  In turn, the EPA will then regulate a GM product if there is a pesticide substance incorporated into the plant, such as the Bt gene. Finally, the FDA regulates the food and feed aspects of the GM product.

During the life of the Roundup Ready patents, Monsanto has maintained the regulatory requirements of each agency for the introduction and commercialization of the Roundup Ready traits, including all of the data, in order to use these traits in the United States and international markets.

According to the article entitled “Roundup Ready Soybean Post-Patent Regulatory Commitment Extended through 2021” on the company’s website, Monsanto estimates that it spends approximately $1-1.5 million per year for the maintenance of regulatory approvals for a product.  With the expiration of the last of the Monsanto Roundup Ready patents, Monsanto has stated that it will maintain the Roundup Ready regulatory approval globally through 2021.

System Needed for Maintaining Regulatory Expenses
Based on this statement, it appears that Roundup Ready seed will still be available until 2021. Nevertheless, it is still unclear whether other seed companies will be able to produce and sell generic versions after this point. In addition, who will maintain the regulatory approval after 2021? Will smaller seed companies be able to afford the costs of the maintenance of regulatory approval, and will they be able to produce the data necessary for regulatory compliance based on the current system?

The issue of patent expiration and the maintenance of the regulatory approval for GM seed is very confusing and leads to the question: isn’t there a simple mechanism for GM seed to be made available for companies to use once a patent expires, without the need for large regulatory maintenance expenses?
A similar market that comes to mind is the pharmaceutical industry. Obviously, the pharmaceutical industry has dealt with similar issues over the years with the regulatory requirements for the development and commercialization of drugs.

Over the years, the pharmaceutical industry has developed a system with the U.S. regulatory agencies to allow for generics to enter the marketplace once a patent has expired. The Drug Price Competition and Patent Term Restoration Act, more commonly known as the Hatch-Waxman Act, allows the FDA to approve applications to market generic versions of brand-name drugs released after 1962 without repeating efficacy and safety research

A generic drug maker must simply submit an application after a patent has expired that basically states that the generic drug maker will be creating an identical drug to the patented drug that went through the regulatory approval process.

There are of course obvious differences between the pharmaceutical and agriculture industries which may create new hurdles for the development and implementation of similar regulatory mechanisms for the agriculture industry. However, it is yet to be determined whether the U. S. government will develop some sort of similar mechanism to the Hatch-Waxman Act to aid in the introduction of generic GM seed into the marketplace after a given trait-based patent expires.

In the end, in spite of the fact that the United States has a long history as a world leader for innovation and the introduction of new technologies, the effect of the expiration of the trait-based patents on the United States and the world is a complete unknown. Obviously, there does not appear to be a silver bullet to the complexity of the issues. The next couple of years will be interesting for the agriculture industry.

Barbara Campbell and James M. Weatherly

Editor’s Note: Barbara Campbell and James M. Weatherly are attorneys in the Intellectual Property, Technology and Media Department of Holme Roberts & Owen LLP in Denver, Colo.  Campbell and Weatherly have over 11 years of experience in prosecuting agriculture and biotechnology-based patents, plant patents, United States Plant Variety Protection, plant breeders’ rights and trademarks throughout the world. Campbell can be contacted at 303-866-0571 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Weatherly can be contacted at 303-866-0544 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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