On 6 July 2010 the European Court of Justice (ECJ) handed down their judgement in the case of Monsanto Technology LLC v Cefetra BV and Others1, a referral to the ECJ from the Rechtbank’s-Gravenhage of the Netherlands2. This case is of particular significance for patentees in the biotech industry since it has provided one of the first opportunities for the ECJ to address the scope of gene patents in Europe in light of Directive 98/44/EC (the Biotech Directive).
Importantly, the ECJ, following the Advocate General’s Opinion, have concluded that the scope of protection for gene patents, as it relates to products incorporating the gene sequences claimed, does not extend to situations wherein the sequence does not perform the function for which it was patented. The ECJ have also confirmed that the Biotech Directive lays down an exhaustive body of rules and as such, national legislation cannot provide for patent protection wider than that conferred under the Directive.
Background to the Referral
Monsanto, the world’s largest seed company, is the holder of European patent EP0546090 protecting their ‘Roundup Ready’ (RuR) soybeans, which express an enzyme conferring resistance to the herbicide marketed by Monsanto as ROUNDUP®. The patent includes claims to both isolated DNA sequences and specific DNA sequences encoding the enzyme. In 2005 and 2006, Monsanto seized cargoes of soy meal imported into Amsterdam and found their patented DNA sequences to be present in the meal thereby establishing that the meal was derived from RuR crops grown in Argentina. Monsanto subsequently brought an action in the District Court of The Hague against the Dutch importer, Cefetra, for infringement of the European patent.
In their defence, Cefetra cited the provisions of the Biotech Directive and in particular, Article 9 which states:
“The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material, save as provided in Article 5(1), in which the product is incorporated and in which the genetic information is contained and performs its function.” (emphasis added)
On the basis of this wording, Cefetra argued that patent protection did not extend to the imported soy meal derived from the soy beans because the DNA sequence was not ‘performing its function’ in the dead meal material.
Although Monsanto did not agree that this was the correct interpretation of Article 9, they argued in addition, that there was infringement of their patent by virtue of the absolute protection afforded to product claims under Dutch national law. They contested that their DNA sequence was protected as a product per se, irrespective of the fact that it was present within the imported meal.
Given the legal uncertainty surrounding the interpretation of the Biotech Directive and its relationship with national law, the Dutch court referred a number of questions to the ECJ for a preliminary ruling. In particular, question one sought clarification on the interpretation of Article 9, and question two addressed whether the Directive stands in the way of national law permitting absolute protection for product claims to DNA sequences as such. For further details of the Referral, see: “Monsanto Puts Biotech Directive Under the Spotlight”; Bio-Science Law Review 4; (2006/2007), 160-163.
The ECJ’s Judgement
Question one – Interpretation of the Biotech Directive
Question one focussed on interpretation of Article 9 of the Biotech Directive and in particular, whether the DNA sequence comprising part of the imported material must ‘perform its function’ at the time of the alleged infringement.
On this point, the ECJ concluded in paragraph 38:
“…the protection provided for in Article 9 of the Directive is not available when the genetic information has ceased to perform the function it performed in the initial material from which the material in question is derived.”
The ECJ went on to consider Monsanto’s further arguments on the grounds that the general provisions of the Directive were without prejudice to the ordinary law of patents and as such, Article 9 served to extend that basic protection without depriving the DNA sequence of absolute protection as a product per se.
Regarding these submissions, the ECJ held this analysis of the situation to be unacceptable. Instead, the court, closely following the AG’s Opinion on this matter, narrowly interpreted the Biotech Directive as only allowing for ‘purpose-bound’ protection for gene sequences.
In particular, the ECJ stated at paragraph 45:
“Since the Directive thus makes the patentability of a DNA sequence subject to indication of the function it performs, it must be regarded as not according any protection to a patented DNA sequence which is not able to perform the specific function for which it was patented.”
On the basis of Article 9 and the principle of ‘purpose-bound’ protection, the court decided on the facts of the case that the claimed ‘resistance gene’ was no longer performing its specific function in the dead soy meal and as such, importation of the meal did not infringe Monsanto’s patent.
Question two – The relationship with national laws
As noted above, the second question addressed the issue of whether the Biotech Directive prevents national legislation offering wider protection for biotechnological inventions, for example gene sequences as products per se.
On this point, the ECJ agreeing with the AG concluded at paragraph 63:
“…Article 9 of the Directive effects an exhaustive harmonisation of the protection it confers, with the result that it precludes the national patent legislation from offering absolute protection to the patented product as such..”
As discussed in greater detail by the AG, it was held that a minimalist harmonisation approach would not allow the Directive to fulfil its intended objectives, namely the harmonisation of biotech patenting across Europe.
This position is perhaps unsurprising given the conclusions reached by the ECJ in relation to ‘purpose-bound’ protection for gene sequences noted above. In particular, the question was raised in the AG’s Opinion why Article 9 would need to refer to functional performance if a sequence enjoyed absolute protection under national law even when not performing its function.
Questions three and four
The additional questions referred related to matters concerning (i) the significance of the date on which the Biotech Directive entered into force, and (ii) whether it was necessary to take into consideration the TRIPS Treaty, in particular Articles 27 and 30 relating to patentable subject-matter and the exceptions to patent-holders’ rights.
In relation to the first of these questions, the ECJ confirmed that new rules apply as a matter of principle immediately to the future effects of a situation which arose under the old rule. As such, the fact that the patent at issue was granted before the Biotech Directive came into force did not affect the answers to questions one and two. Secondly, the ECJ agreed with the AG that there was no inherent conflict between the current interpretation of the Biotech Directive and the provisions of the TRIPS Agreement.
As the ultimate arbiter of Community law, the ECJ’s judgement is binding on member states as regards interpretation of the provisions of the Biotech Directive. Thus, it has direct relevance to the proprietors of European gene patents in the Biotech industry seeking to prevent the import of harvested material derived from transgenic plants grown in territories, such as South American countries, where no patent protection is available or is difficult to enforce.
Beyond this, the ECJ’s conclusions as regards ‘purpose-bound’ protection for gene sequences may affect other patentees in the pharma and biotech industries depending on how the national courts interpret the current judgement, notably the concept of a gene ‘performing its function’. In particular, the wording of paragraph 45 as quoted above appears to leave open the possibility that protection may extend to situations wherein gene sequences are merely capable of performing the specific function described in the patent.
In this regard, the judgement also remains unclear on the issue of isolated gene sequences. If, as the ruling suggests, DNA sequences are not considered equivalent to that of other patented chemical entities, patentees may find that their protection does not extend to future commercial uses of their DNA sequences, for example as diagnostic probes. Whether an isolated DNA sequence is considered ‘able to perform the specific function for which it was patented’ will undoubtedly be an issue.
Many have already criticised the AG’s opinion and as such, will not agree with the current judgement. Notably, in a recent paper by Michael Kock3, the author disputed the non-existence of absolute protection for gene sequences in view of the Biotech Directive and contested that the Directive should not be interpreted as overruling national law on this point. In particular, he noted that the Directive is in fact silent on the issue of the scope of protection afforded to gene sequences as products per se and as such, national law should govern this area. Moreover, to introduce a ‘purpose-bound’ restriction when there is no explicit guidance on this point would conflict with the intention of the European legislature not to provide a special body of law for DNA sequences but rather to clarify the provisions in areas particular to biological inventions.
In view of the Biotech Directive’s complex history, it is perhaps unsurprising that one of the first ECJ cases to deal with its interpretation has raised as many questions as it has answered. It will certainly be interesting to see how national courts accommodate this decision in future litigation in this area.
1 Case C-428/08
2 Since Monsanto withdrew their complaint in the underlying Dutch litigation after the negative opinion from the Advocate General, it was thought by some that the ECJ may not issue a final judgement in this case.
3 Kock.M.A. “Purpose-bound protection for DNA sequences: in through the back door?”; Journal of Intellectual Property Law & Practice 2010 5, 495-513.