We’re just at the start of figuring out how to balance protecting investment with furthering innovation.
In my three decades in the business of seeds, I’ve seen very few topics complicate a conversation as quickly as intellectual property. Talk to one person and the bigger issue is protection: companies have to be able to protect years, sometimes decades, of investment. Talk to someone else and the conversation quickly turns to access: where will the genetics and biological material needed to build the next innovation come from?
That tension is exactly why the sector has watched the dispute between Corteva and Inari so closely.
I’m not here to weigh in on which company was right. What interests me more is what comes next. As our ability to work with genetics becomes more precise and powerful, the decisions companies make about what they protect, what they license and what they need legitimate access to are becoming increasingly important business decisions. Access itself is becoming a strategic asset.
What Was Settled?
First, a quick refresher: Corteva filed its lawsuit against Inari in September 2023. At the centre of the dispute were Corteva seed materials deposited with the American Type Culture Collection (ATCC) for patent purposes. Court records say Inari acquired Corteva seeds from ATCC more than 200 times under several material transfer agreements between Inari and ATCC. What Inari could lawfully do with that material became one of the issues in the case.
Corteva alleged that Inari had wrongfully exploited its seed technology and asserted claims involving utility patents, plant variety protection certificates and the material transfer agreements. Inari disputed Corteva’s claims and challenged aspects of Corteva’s intellectual property and Corteva’s interpretation of the restrictions surrounding the deposited material. The dispute made it to a federal trial in Delaware before the companies settled three trial days in. Because the case settled during trial, there was no verdict on the remaining disputed claims and no final determination that Inari’s conduct crossed the lines Corteva alleged.
Under the settlement announced Sept. 28, Inari agreed to destroy Corteva material it accessed from seed depositories and material developed from those deposits, and to assign Corteva intellectual property related to its edited versions of Corteva events. The companies also agreed to negotiate certain licensing arrangements. Other terms are confidential.
While the lawsuit is settled, some of the questions the industry is wrestling with remain very much alive.
Access, Permission and Freedom to Operate are Different Things
One reason this case attracted so much attention was the role of biological depositories. For some biological inventions, a deposit may be needed to satisfy patent disclosure requirements when access to the material is necessary to adequately disclose the invention. The existence of a deposit does not, by itself, mean the deposit was legally required, but qualifying deposits can make biological material available to the public under defined rules.
In May, the U.S. Department of Justice entered the case with a statement of interest. It emphasized the importance of the public’s ability to access and “read” patented biological material for follow-on innovation and competition. At the same time, the DOJ took no position on how the court should resolve the dispute between Corteva and Inari and did not argue that access answered every question about what could subsequently be done with the material.
The court record also shows why the details matter. The parties disputed how patent rights and the material transfer agreements applied to Inari’s use of the deposited seed, while Corteva also asserted separate plant variety protection rights. In August, the court declined to grant Corteva summary judgment on its breach-of-contract claims, leaving the factual question of breach for the jury.
The Licensing Line is Worth Watching
One line in the settlement announcement caught my attention in particular: Corteva and Inari agreed to negotiate certain licensing arrangements. We don’t know what those arrangements involve, what will be licensed or on what terms, and the rest of the settlement is confidential, so I would be careful about reading too much into a single sentence. Even so, licensing is worth paying attention to because it is one of the ways this industry can protect innovation while also creating legitimate access to it.
As gene-editing capabilities advance and existing germplasm and traits become useful in new ways, the agreements around those assets become more consequential. Licensing can determine not only who gets access, but what they can do with that access, in which markets and for what purposes.
Companies will have to decide what they keep proprietary and what they are willing to license. Where does collaboration create more value than exclusivity? When is tighter control necessary? Could creating a legitimate route into your technology expand its value rather than give that value away? Those are commercial decisions, which means IP discussions belong as much in the boardroom as they do with legal counsel.
The Boardroom Conversation is Changing
A verdict in this case would have resolved at least some of the disputed issues between these companies. Because the companies settled, we don’t get that verdict. What we do get is a very visible example of how quickly questions about deposited biological material, existing genetics, modern editing tools and commercial rights can move from the lab to the courtroom. The DOJ’s decision to enter the case also shows that federal antitrust officials saw broader competition and follow-on innovation issues in the dispute.
For me, there is a practical takeaway here that extends well beyond this particular case: availability, permission and freedom to operate are different things.
Being able to obtain material does not, by itself, answer every question about what can subsequently be done with it. As the science gives us more possibilities, companies are going to need much greater clarity about those boundaries at the front end.
The right path forward isn’t to weaken intellectual property protection. Major commercial breeding, trait and technology programs can require substantial long-term investment, and companies need credible ways to earn a return on successful R&D. Closing access is also clearly not the right answer. Innovation builds on knowledge, research and the work that came before it.
What I think changes over the next five years is the conversation between those two positions. There will still be value in building sophisticated strategies around owning and protecting IP. The next competitive capability will be deciding intelligently what to license, to whom, for what purpose and under what conditions.
I think boards will increasingly need to ask two key questions: “What do we have that someone else could make more valuable?” and “What do we need access to that would let us move faster?” That changes licensing from something you negotiate after the strategy is decided into part of the strategy itself.
The lawsuit is over. The much bigger conversation about how intellectual property works in the next era of seed innovation is just getting started.
What do you think? We’d like to hear it. If you’ve got a perspective you’d like to share with Seed Worldreaders, send it our way to editorial@seedworldgroup.com.
