Limitations on the scope of DNA patent claims in Europe: Monsanto struggles in its attempt to block importation of soy meal containing patented DNA

A while back Hal Wegner of Foley and Lardner forwarded me an English translation (courtesy of Dutch IP lawyer Charles Gielen) of a recent decision by a Dutch [corrected May 6] court in the case of Monsanto Technology v. Cefetra. I think the decision should be of great interest to the biotech community, so I’ve attached it here, and provide some of my own commentary below.

Monsanto holds a European patent (EP 0 546 090) essentially claiming a gene that encodes a glyphosate-tolerant form of the enzyme EPSPS, derived from bacteria. Expression of this gene in a recombinant plant, such as soy, renders the plant resistant to glyphosate (Round-Up®), and is the basis for Monsanto's highly successful line of Roundup-Ready® crops. However, Monsanto was unable to secure patent protection for the invention in Argentina, a major agricultural country, so farmers in that country are essentially free to use the technology without paying royalties to Monsanto.

In the currently pending case of Monsanto v. Cefetra, a Dutch court is struggling with the question of whether importation into Europe of Argentinian soy meal constitutes infringement of Monsanto’s European patent. Monsanto argues that because the processed soy meal comprises the patented DNA, the importation of the product is infringing. However, Cefetra argues that the mere presence of patented DNA in the processed soy meal does not amount to infringement of any of the claims, and so far has met with some success.

The Dutch court hearing the case held that "there can be no question” that Monsanto's claims directed to "isolated" DNA sequences were not infringed because DNA incorporated in soy meal is not present as "isolated matter.” Monsanto argued that the term isolated encompasses any DNA sequence taken out of its natural environment - in this case, the bacterial chromosome. But the court found that “the average person skilled in the art would understand the term isolated DNA as DNA that has been retrieved from the cell (core) of an organism for further treatment in a manner as is usual in the relevant profession.”

Likewise, the court held that claims directed to a method of producing a genetically modified plant harboring the glyphosate resistant gene were not infringed by the soy meal. While the court accepted that the soy plant and soybean have been directly obtained by the method, the court found that the subsequent crushing, separation, and treatment stages were "too drastic to still assume a direct relationship between the methods and the soy meal."

The remaining unresolved question for the court is whether claims directed to the DNA sequence per se, without any limitation to "isolated DNA," are infringed by the soy meal. The court found that even if the “DNA sequence is only present in the soy meal in minimal quantity, this does not deter from the fact that there is a breach of the Monsanto patent, if and to the extent that the scope of protection extends to the product, the DNA, as such.” In other words, the court rejected a de minimis argument, holding that even traces of DNA as a contaminant amount to literal infringement of a claim broadly directed to the DNA. The court did note that mere coincidental contamination, for example, resulting from residue from previous cargo in the ship, might not constitute infringement, but the court did not have to decide this issue because it was clear that the defendant's soy meal was the source of the patented DNA.

However, the defendants argue that Article 9 of the EU Biotech Directive bars patent protection for DNA present in an inert material such as soy meal. The Biotech Directive was issued by the European Parliament in 1998, essentially to clarify that biotechnological inventions are patentable in Europe, and provides direction with respect to the scope of that protection. Article 9 states that the “protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material . . . in which the product is incorporated and in which the genetic information is contained and performs its function.” The defendants argue that since soy meal is dead material, the DNA present in the soy meal is incapable of performing its function of coding for a protein, and hence is not eligible for patent protection under Article 9. Monsanto counters that soy meal is not a biological material and thus does not fall under Article 9. Monsanto further argues that the Directive is intended to extend the scope of protection for biotechnological inventions, not to restrict it, and that in any event, it is “sufficient that the [claimed] DNA has exercised its function (namely the provision of resistance to glyphosate in the soy plant) or that the DNA, should it be isolated from the soy meal, can be incorporated in a cell in a soy plant and can then (once again) exercised its function."

The Dutch court found this Article 9 argument important and novel, and has referred the question to the European Court of Justice. In particular, the ECJ has been asked to address whether Article 9 should be understood such that patent protection is extended in situations where “the DNA is present in a material and does not express its function at the time of the stated breach but has indeed expressed its function or possibly, following the isolation from the material and its incorporation in the cell in organism, could once again express its function.” The ECJ has also been asked whether Article 9 "stand[s] in the way for the national patent legislation to (additionally) allow absolute protection for the product (the DNA) as such, whether or not the DNA expresses its function and must the protection provided by article 9 therefore be considered exhaustive?”
Monsanto has already lost similar infringement lawsuits in 2007 in Spain and England. Monsanto’s Jan. 1, 2008 10-Q filing with the SEC reports that the English court found that patent valid, and that the patented sequence is present in the imported soy meal, but that the claims as interpreted by the court were not infringed. In Spain, the judge ruled that the soy meal does not fall under the protection of the patent as the [patented] DNA in the meal no longer expresses its function (apparently the same argument that the Dutch court is referring to the ECJ) I.
The 10-Q filing also reports that the “Argentine government has opposed our use of patent infringement actions as a means of securing payment for the use of our technology in Argentina and has been admitted as a co-defendant to the proceedings in the Netherlands and as an observer to the proceedings in Denmark. In addition, the national competition commission in Argentina (CNDC) has initiated a formal investigation regarding our patent infringement actions in the European Union.”
These cases raises a number of fascinating but perhaps troubling issues for the biotechnology industry. Claims directed to isolated DNA sequences are extremely common, particularly in the United States, where the patent office normally will not allow a claim directed to a DNA molecule per se, but will require the applicant to include a limitation like "isolated" to distinguish from naturally occurring forms of the molecule, e.g., naturally occurring genes. I'm not sure how common it is even in Europe to get claims to DNA molecules per se as a Monsanto was able to do in this case. But if a US court were to construe the term “isolated” as narrowly as this Dutch court did then patent owners might find themselves in possession of a very limited scope. In the US it is often assumed that a claim to isolated DNA covers the DNA essentially in any context different from us naturally occurring environment - people often refer to claims reciting isolated polynucleotide' as gene claims and assume that they broadly cover any use of the gene. However, depending on how a court interprets the term isolated, the scope of such claims might be much narrower, as exemplified by this Dutch court’s interpretation.

Also, consider the impact of new genetic use restriction technologies (GURTs) which essentially result in removal of recombinant genes from the seeds produced by recombinant plant. This technology has a number of advantages. For example, it would obviate much of the arguments by opponents of genetically modified crops, because the seeds and food produced by the plants would not contain any foreign DNA. It would also make it harder for farmers to save and replant genetically modified seeds, because the second-generation seeds would not retain the trait. But if farmers in a country such as Argentina, where an effective patent protection for a genetic modification is lacking, were able to get access to the first-generation seeds they would seem to be free to export the recombinant DNA-free crops to other countries without having to worry about infringing any patent directed to the DNA sequence encoding the trait.

Most importantly, it is a good example of the challenges biotechnological patent owners face in enforcing their patents. Although many critics of gene patents argue that gene patents are particularly restrictive of follow-on technology because it is difficult if not impossible to design around a gene, in practice the actual scope of protection is often dramatically limited in the courts, in many cases allowing accused infringers to escape liability.