Agracetus: Patenting all transgenic cotton
||Grace/Agracetus; Private industry; Cotton; Patent law;
||Bijman, J. (1994), "Agracetus: Patenting all transgenetic
cotton." Biotechnology and Development Monitor, No. 21, p. 8-9.
In recent years the US biotechnology firm Agracetus has received much
attention for its aggressive patent strategy. The company currently holds
wideranging patents on transgenic soya bean and cotton. Many claim
these patents are unjustified and should be challenged since they block
rather than stimulate innovation.
Agracetus specializes in biomedical and plant products. The
company, based in Middleton, Wisconsin, was founded in 1981 as a subsidiary
of Cetus Corporation. In 1990 Agracetus became a subsidiary of W.R.
Grace & Co. This US transnational corporation produces specialty
chemicals and health care services and products.
The core research competence of Agracetus is in gene delivery and in molecular
and cellular biology. The three main business operations are: (1) plant
as bioreactors, i.e. the production of biopharmaceuticals in green plants;
(2) Accell=FE gene therapy, i.e. genebased treatment of genetic
and acquired illness; and (3) specialty fibres, i.e. highperformance
cotton fibres by genetic engineering. Both biopharmaceuticals and gene
therapy are developed for the human health market.
One of AGRacetus' most important proprietary techniques is its Accell=FE
gene gun. This device uses an electronic accelerator to fire DNAcoated
microprojectiles (e.g. gold particles) into living cells to introduce new
genes into these cells. Agracetus uses this technique for genetically engineering
plants, transforming somatic animal cells, and even for human gene therapy.
Agracetus is applying its gene gun technique to a broad range of plants:
poplar and spruce trees, (Indica) rice, cranberry, tobacco, maize, green
and dry beans, and peanuts.
Most of its research, however, focuses on cotton and soya beans, two of
the major agricultural crops in the world, both in industrialized and developing
countries. With the use of its Accell=FE technique Agracetus was, in 1990,
the first to show that soya beans could be genetically engineered. The
agronomic traits of transgenic cotton and soya beans focused on, are pest
resistance and herbicide tolerance.
With its genetically engineered cotton, Agracetus wants to develop
and market specialty fibres that will combine the preferred appearance
and texture of cotton, with enhanced fibre properties. These customized
fibres will be tailored to the needs of the textile industry. New properties
may include greater fibre strength, enhanced dyeability, improved dimensional
stability and altered absorbency. Another example are fibres containing
enzymes that can biodegrade environmental contaminants. These fibres would
be placed in filters through which contaminated water is led.
Agracetus also works on transgenic cotton plants with brightly coloured
cotton bolls. Although several naturally coloured cotton varieties have
been obtained by traditional breeding methods, no blue variety exists.
As blue is in great demand in the textile industry, particularly for jeans
production, synthetic fabric dyes are used. However, the ingredients of
these dyes are often hazardous and their wastes are polluting. Additionally,
they take time and energy to work into the cloth. Natural blue cotton does
not have these disadvantages and therefore has great market potential.
The genetic engineers plan to insert into cotton plants the genes that
are responsible for the production of the blue colour in the indigo plant,
formerly the source of blue dye, until a cheaper synthetic method of making
it was discovered. Also Calgene, USA, has started a research project
aimed at developing blue cotton.
|How did Agracetus obtain such a broad cotton patent in
Agracetus' broad patent was granted largely on a precedent set in Scripps
versus Genentech. In 1991, Scripps Research Institute successfully
challenged Genentech for infringing its patent for a purified clotting
factor made from blood. The courts ruled that Genentech must obtain a licence
from Scripps even though Genentech produced the factor using genetic engineering,
thus using a different process.
The precedent of this case is that process limitations can be ignored,
because ultimately only the product (the matter) counts. Originally, Agracetus
filed for all of its claims in one patent. At that time the patent office
rejected the broader claim focusing on the matter instead of the process.
Only the product by process claim was awarded (US patent no. 5,004,863,
in April 1991). Then Agracetus filed a continuation application saying
that because of the Scripps versus Genentech case the process language
is meaningless. Therefore it wanted to drop this useless process language,
and keep the product claim. Thus, a patent for composition of matter was
awarded on appeal by the Court of Appeals, Federal Circuit (CAFC). This
patent (no. 5,159,135) was granted on October 27, 1992.
Sources: R. Mestel (1994), "Rich Pickings for Cotton's Pioneers".
New Scientist, 19 February, pp.13-14. Genetic Engineering News, July 1994,
Agracetus has been very aggressive in obtaining patent protection for
its newly developed techniques. On April 2, 1991, Agracetus was granted
a US patent (no. 5,004,863) covering cotton plant genetic engineering technology
using Agrobacterium tumefaciens. Also in April 1991, Agracetus received
a US patent (no. 5,015,580) covering a method for genetically engineering
soya bean plants using the gene gun technology. The Accell=FE gene gun
itself was patented in 1992 (US Patent no. 5,120,657, issued in June 1992).
Other patents do not only cover the technique, but also the transformed
plants. For instance, in October 1992 Agracetus was granted a US patent
(no. 5,159,135) covering all genetically engineered cotton plants. Similarly,
in March 1994 the company was granted a European patent (no. 0,301,749,B1)
on all transgenic soya beans (in the US the patent application is still
pending). The cotton and soya bean patents have broad coverage, meaning
that the most comprehensive claims cover all cotton and soya bean seeds
and plants which contain a recombinant gene construct, i.e. are genetically
engineered. A similar broad cotton patent has been granted in India, and
patent applications are pending in Brazil and China. Together, the United
States, Brazil, China and India account for sixty per cent of world cotton
Agracetus is in the business of developing and selling technological knowledge.
Besides contract research, licence fees are its main source of income.
Through nonexclusive licences others can use the genetic engineering
technique. For its transgenic cotton, Agracetus already has nonexclusive
commercial licence agreements with Monsanto and Calgene.
Calgene is developing a herbicideresistant cotton variety, while Monsanto
plans to market an insectresistant variety, transformed with a gene
from Bacillus thuringiensis (Bt). Details about these terms are
confidential. For companies that do not have the resources to develop transgenic
plants, Agracetus provides a service to improve soya bean varieties under
Agracetus stated that its broad patents will not affect public funded research,
because research licences are available, free of charge, to all academic
or governmental researchers. EU patent law includes a research exemption,
allowing the use of protected intellectual property for true research purposes,
without infringement of patent rights. In the USA, however, utility of
industrial patent law (the type of patent granted to Agracetus) has no
research exemption, although judicial decisions (in US courts) appear to
provide an exemption for noncommercial research. As can be expected,
this leaves room for ambiguity in determining what constitutes "noncommercial"
research. Agracetus and public sector researchers may have differing opinions
on this issue.
These broadcoverage patents so far have met criticism in the USA,
in Europe and in developing countries. Given the farreaching impact
of those patents the criticism has been relatively small.
Initially, the opposition came from NGO's which are concerned that the
patents may lead to monopoly positions for companies or nations, thereby
adversely affecting cotton production in developing countries. The Rural
Advancement Foundation International (RAFI) has been one of the most
outspoken opponents. In its Communique of July/August 1993, RAFI concludes
that the Agracetus patents on cotton will stifle, rather than stimulate
innovation on genetically engineered cotton outside the three to four major
corporations and plant biotechnology companies that dominate transgenic
But other new biotechnology firms as well as seed companies have also expressed
their concern, even though in general they support patentability of intellectual
property. Although most biotechnology firms are eager to licence their
technology, there is no obligation to licence. Even if Agracetus does want
to licence, it can exert considerable control over production and sale.
The terms of the licence cover the height of the fees, but may also hold
restrictions on special applications of the technology and on commercial
activities in certain markets. For instance, for the improvement of special
fibre qualities, Agracetus is not likely to grant any licence, as developing
and selling specialty natural fibres is part of its own core business.
Still, other companies are not expected to take action against the broad
coverage as some have already signed a deal with Agracetus and/or hope
to obtain broad patent coverage for their own areas of work. Calgene, for
example, has filed a patent that would cover all genetically engineered
vegetables in the Brassica family, including cauliflower, broccoli and
kale. Plant Genetic Systems, Belgium, has filed patents covering
all transgenic plants containing Btgenes, and genes to induce nuclear
male sterility, important for plant breeding.
Reexamination of cotton patents
The US Department of Agriculture (USDA) as well as an US law
firm (for an undisclosed client) have filed for reexamination of Agracetus'
transgenic cotton patents. The US Patent and Trademark Office has
agreed to reexamine Agracetus' two product and process patents on
cotton. The law firm argues that the Agracetus patentee omitted citation
of relevant information on transgenic cotton that appeared in a European
patent application filed earlier by a third party, thus challenging the
novelty of the techniques.
The criticism of the USDA is much broader in scope, claiming that the patents
deter cotton research. USA's Agricultural Research Services administrator,
dr. R.D. Plowman, has stressed his concern that the trend towards lockingup
germplasms, both plant and animal, with patents could be disastrous for
agriculture. The patents may give Agracetus virtual control over all applied
research on transgenic cotton. The USDAattorney also believes that
the inventions patented by Agracetus are taught in the prior literature.
Thus the claim of nonobviousness, one of the criteria for patentability,
does not hold.
More arguments against these broad coverage patents for cotton and soya
beans have been put forward. This precedent would encourage others to corner
crops that depend on genetic engineering or other process technologies
(like the Calgene and PGS examples). Agracetus contends that it has not
set a precedent, pointing out that the very broad Cohen/Boyer patent covers
all DNAtransfer. However, the latter does not claim any rights to
matter that is produced by using the patented technology. The Agracetus
case is clearly unprecedented in that it gives the company rights to all
genetically engineered products from an entire crop.
In India the Agracetus'' patent has led to a strong debate, even at
the highest government level. The broad cotton patent was granted in 1991.
But now the Indian Council of Agricultural Research and the Department
of Biotechnology are trying to revoke the patent, because it may restrict
India's access to a crop line produced by this method or harm the interests
of India's cotton economy. Through the working of this patent, Indian scientists
working on transgenic cotton (even with totally different techniques) are
in a stranglehold by Agracetus.
That Indian scientists and producers have difficulties in gaining access
to new technology developed by foreign companies, was shown in a case with
Monsanto. The Indian government wanted to enter into an agreement with
the USbased agrochemical and biotechnology company for their transgenic
cotton variety in which Bttoxin is expressed successfully. However,
the licence fee demanded by Monsanto was extraordinary, and the Indian
government had to put off the deal. Several Indian NGOs have emphasized
this case to criticize the installation, as part of the recent GATT agreement,
of a new patent system that does not take into account the negative impact
that such a "foreign" system may have on national innovation activities.
Agracetus (1993), Transgenic Cotton Patent: Background and issue
brief, 10 December.
Agracetus (1994), Transgenic Soybean Patent: Background and issue brief,
Agricell Report, June 1992, p.45.
P. Christou et. al. (1990), "Soybean Genetic Engineering: Commercial production
of transgenic plants". Trends in Biotechnology, June, pp.145151.
Down to Earth, March 31, 1994, pp.57.
D. Holzman (1994), "USDA files to Reexamine the Recombinant Cotton
Patent". Genetic Engineering News, July, p.1, p.13.
R. Mestel (1994), "Rich Pickings for Cotton's Pioneers". New Scientist,
19 February, pp.1314.
New Scientist, 31 July 1993, p.7.
Seed & Crops Industry, June/July 1994, p.29, p.42; Aug/Sept
RAFI Communique, JulyAugust 1993.
Contributions to the Biotechnology and Development Monitor are not
covered by any copyright. Exerpts may be translated or reproduced without
prior permission (with exception of parts reproduced from third sources),
with acknowledgement of source.