Some GM Canola Patents Expiring

SASKATOON - Jan 9/07 - SNS -- Some patents covered genetically modified canola varieties grown in western Canada will soon expire and growers in Saskatchewan are becoming anxious about whether they will derive an economic benefit when that occurs.

Concerned about the uncertainty of the patent issue and the potential impact to the Saskatchewan canola industry, the Saskatchewan Canola Development Commission (SCDC) is trying to determine whether farmers will benefit from lower costs once those patents expire.

Three key patent issues before the group are:

a.. Canadian patents that relate to HT (herbicide tolerant) canola,

b.. The potential for a research exemption in Canada so that research could be conducted in advance of a patent expiration,

c.. and what ( if any) the economic benefits of the development and commercialization of a generic HT canola could be.

Professor of Law Martin Phillipson and Research Associate Stuart Smyth with the University of Saskatchewan were enlisted to examine these issues. Their preliminary findings are:

1.. Research exemptions do exist but are presently limited to the pharmaceutical industry. It would appear that it may be possible to use such an exemption to get regulatory approval but the company cannot profit from development until after patent expiry has occurred. Further inquiry with the Canadian Food Inspection Agency needs to happen to rate the possibilities of such opportunities.

2.. Regulatory procedures to move towards risk assessment of novel traits seem to be in excess of two years - longer than even five years ago.

3.. Potential economic impact on farmers who would have access to savings gained from a reduced technology use agreement (TUA) cost is estimated to be $56-205 million per year in Saskatchewan alone. The range is wide because it represents best/worst case scenarios of how many Roundup canola acres are planted and also what the TUA may be. Both are unknowns presently. Currently, the TUA is a $15/acre fee farmers pay to access the Roundup Ready technology each year.

4.. Some companies have used competitive strategies such as a reduction in price for crop protection products as patents expire and perhaps would look at similar reductions in the price of technology use agreements in the near future. Using such strategies hinges significantly on what follow-up patents companies hold on improvements to the HT process. It is not entirely known what "evergreening" strategies companies may be using. Evergreening refers to attempts by a company to extend a patent by extending the intellectual property protection by filing new patents containing uninventive additions. More examination is needed. Complicating this further is the fact that there has been an 18 year delay between Calgene's patent filing in May 1987 and the Canadian Patent Office patent granting in April 2005. The Calgene patent laid the groundwork for the introduction of new traits in canola.

"The potential for economic gains with the expiry of patents is significant, but it is frustrating to not be able to ascertain when this may happen," says SCDC Chair, Jim Caughlin, a farmer from the Tisdale area.

"Farmers want to be able to plan for such an occurrence and capture the potential benefits. We are not finding fault with companies like Monsanto - it is probably good business practice if they can extend their patent protection. But on behalf of growers, we need to ensure proper patent protocol unfolds."