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Agricultural law: containing the GM revolution
by
Martin Philipson
Keywords:  Genetic Engineering, Canada, Herbicide tolerance, Rapeseed, Canola, Regulation, Monsanto.
Correct citation: Philipson, M. (2001), "Agricultural law: containing the GM revolution ." Biotechnology and Development Monitor, No. 48, p. 2-5.

Roundup Ready Canola was introduced commercially into Canada in 1997. The plant's in situ behaviour, however, has created difficulties for farmers growing canola from their own selected and saved seed and for organic farmers. This article discusses how GM crops challenge current agricultural law

The benefit claimed for Roundup Ready Canola, patented by Monsanto in 1993, is that it is resistant to the company's hugely successful herbicide Roundup. Used in combination with Roundup, it is argued, RR Canola can increase farmers' yields and (over time) lower their input costs by eliminating weeds and plants that might inhibit the plants growth.

Given the alleged desirability of such an outcome, and the commercial potential of this crop system, Monsanto has gone to great lengths to protect its invention. Aside from obtaining patent protection that grants Monsanto the monopoly right to use, sell, license and manufacture the product in Canada exclusively for 20 years, the company also places strict constraints on farmers who choose to use the product. These constraints are contained in Technology User Agreements (TUAs) which farmers must sign prior to obtaining and using the product. Under the TUA, farmers agree to pay Monsanto a royalty fee of Can $15 per acre. In addition, farmers must not save and replant any of the Roundup Ready seeds, only use Roundup on their canola crop and allow Monsanto virtually unlimited access to their property to verify compliance with the terms of the TUA for a period of three years.

Monsanto v Schmeiser: the decision

On March 29, 2001 Justice William McKay of the Federal Court of Canada found Percy Schmeiser to have committed multiple infringements of Monsanto's patent and fined him Can $ 20,000. Justice McKay held that the levels of Roundup Ready Canola on Mr. Schmeiser's property were such that he "knew or ought to have known" that the crop he was growing had been planted with seeds that were Roundup resistant. As Mr. Schmeiser was not in possession of a TUA, he was guilty of using Monsanto's patented product without a license.

Mr. Schmeiser alleged that he had neither deliberately planted the canola, nor used Roundup on the crop, and therefore did not intend to benefit from the use of the patented product. Furthermore, he asserted that the Roundup Ready canola on his property was "volunteer" canola that had infested his field after being blown from neighbouring properties or passing trucks.

However, Mr. Justice McKay held that the levels of Roundup Ready Canola were too high to be of a "volunteer" nature. Furthermore, Mr. Justice McKay made it clear that once the existence of these levels was determined, a finding of patent infringement against Mr. Schmeiser was inevitable:

"It is well settled that infringement is any act that interferes with the full monopoly rights of the patentee (Monsanto). Intention is immaterial for 'infringement' occurs when the essence of the invention is taken regardless of the intent of the infringer."

Given that patent law does not require that an individual intended to use the product without permission, it is clear that a patent is a powerful weapon with which to protect one's product. Mere use, however unintentional, is sufficient to render an individual liable for prosecution.

In intellectual property law terms the McKay decision is unremarkable. The law of patents is quite clear and, given the findings of fact, the decision was entirely predictable. However, while much media attention was given to legal issues such as genetic contamination and increasing corporate control of farming practices, the decision itself did not and could not address these issues. This was a patent infringement suit and nothing more. In that sense, the decision is clearly a legal victory for Monsanto in that its patent has been upheld as valid. It is also clearly a defeat for Mr. Schmeiser in that he was found guilty of patent infringement. Beyond these two issues, the decision itself has little impact in legal terms.

Wider implications

The wider significance of Monsanto v Schmeiser lies in the fact that it represents the first Canadian skirmish in a long legal battle, which may well determine the extent to which corporations will be allowed to exert control over farmers and farming throughout the world. Monsanto has pursued similar actions in Canada, the United States and elsewhere, and will undoubtedly continue to do so. However, this scenario raises issues that go far beyond the mere determination of a patent infringement suit.

Corporate control

For thousands of years farmers have traditionally saved seed from one years' crop to plant the following year. The proliferation of patents over genetically modified seeds clearly threatens that practice, as evidenced by the decision in Monsanto v Schmeiser. Under the terms of a TUA, farmers are specifically prohibited from saving seed and must return to the patentee each year for a new supply. If this practice becomes the norm, farmers will be utterly dependent on these corporations for their seeds. Once a farmer has chosen to pursue GM production methods it is very difficult to rethink that choice, particularly in the face of aggressive marketing and sales campaigns by the manufacturers and the widespread endorsement of such crops by government agencies.

As more and more conventional plant varieties are genetically modified and patented, these corporations will exert an ever-increasing level of control over the overall seed supply. Consequently, it will be these entities (as opposed to farmers) that will determine the variety of crops grown. Given the high research and development costs associated with the production of GM crop systems, corporations will choose to market seeds that they deem to be commercially viable, rather than allowing farmers to determine the types of crops they wish to grow. The inevitable result of this commercialization of the seed supply will be higher seed prices. In the developing world, this would be a disaster scenario. Higher seed prices are unthinkable in a context where food security is already precarious. In the developed world, critics argue that the spectre of increased input costs in the guise of higher seed prices may drive small farmers off the land, leaving farming to large-scale corporate farmers. This "industrial" model of rural "development" will only enhance the control of large multinationals over rural economies and communities.

An enormous power shift is taking place in global agriculture. Traditional farming practices are being rendered illegal by the extension of patent monopolies to the fundamentals of food production. Consequently, a relatively small number of corporations are exerting an ever-increasing level of control over certain fundamentals of agricultural production. Monsanto v Schmeiser is simply one of the first manifestations of such a shift.

Corporate obligations

The decision in Monsanto v Schmeiser provided ample evidence of the array of legal rights enjoyed by agricultural biotechnology corporations under their patents and associated TUAs. However, the decision did not address the essential corollary of legal rights: legal obligations. The emergence of "volunteer" GM canola is a significant problem on the Canadian prairies. Indeed, such is the extent of this genetic contamination that Monsanto has taken out Canadian and US patents on the most commonly used chemical combinations to tackle the infestation.

The problem of "volunteer" GM plants is of particular concern to organic farmers. GM crops are incompatible with organic certification systems and if an organic farm is contaminated with "volunteer" GM crops, certification will be lost. Loss of certification means commercial ruin as the price premiums enjoyed by certified organic farmers depend on their being able to conform to stringent conditions of production. Such premiums are necessary compensation for the increased labour costs and lower yields associated with organic production.

In October 2001, the Saskatchewan Organic Directorate announced that it intends to pursue a class action against the manufacturers of GM canola for such contamination. Under Saskatchewan environmental law, civil actions can be brought against those who introduce a "pollutant" into the environment. The definition of pollutant is broad enough to encompass GM pollen. However, liability will only attach to the "owner or person in control of the pollutant." The legal question that must be addressed is whether the manufacturer of the GM product will be deemed to be the "owner or person in control." Given the manufacturer's monopoly rights and extensive contractual rights under TUAs, such a finding is clearly possible.

The law of nuisance may also provide a legal avenue for farmers to recoup damages suffered as a consequence of genetic contamination from GM crops. Under this law, a landowner can recover damages for harm caused by a neighbouring landowner's "unreasonable" use of land. The law of nuisance also provides for the issuing of injunctions to prevent more alleged harmful activity. The potential for damage caused by genetic contamination to constitute an actionable nuisance has yet to be explored in the courts, but such contamination clearly manifests itself in a similar manner to many accepted nuisances such as noise, smoke or odours.

However, most provinces in Canada have so called "right to farm" legislation that places a legal prohibition on the commencement of nuisance actions against farmers using "normally accepted agricultural practices." In Saskatchewan the Agricultural Operations Act 1995 specifically includes the use of "innovative technology" in its definition of "normally accepted agricultural practice." Consequently, farmers such as Percy Schmeiser cannot raise nuisance issues in any litigation. However, it should be made clear that the majority of jurisdictions around the world do not have "right to farm" legislation and it is, therefore, open to landowners to commence legal actions for damage caused by genetic pollution from GM crops.

Governmental obligations

Initially, the legal debate must address the question of whether the manufacturers of GM crop systems owe any obligation for damage caused by the unwanted proliferation of these crops. However, future debate must focus on the obligations of the governments that grant patents over (and approve the sale of) GM crop systems. The extent, if any, of such obligations remains undefined but future research into this area is essential. Governments such as those in the USA, Canada and Argentina appear to be enthusiastic supporters of GM technology. The extent to which this support manifests itself in the facilitation of market access (for GM crops) via the elimination of regulatory hurdles needs to be examined in the context of potential future liability.

In Argentina, organic farmers are seeking permission to sue the government over its large-scale approval of GM corn and soy crops. Argentina has enthusiastically adopted GM crop systems and the proliferation of GM crop production threatens the existence of Argentina's organic farming sector.

In Canada, the Federal Government seems unwilling to tackle the issues raised by GM agricultural production in a systemic fashion. While the Canadian Biotechnology Advisory Committee has issued periodic reports on issues raised by the emergence of biotechnological innovations, comprehensive legislation on such matters appears unlikely. Indeed, when a backbench MP of the ruling Liberal party attempted to introduce legislation requiring the mandatory labelling of GM foods, many members of his own party refused to support his Bill and it was comfortably defeated in the House of Commons. Following this defeat, media reports suggested that the Federal Cabinet had developed a strategy to "dodge the issue" of mandatory GM labelling.

While the Canadian government appears to have adopted a market-oriented laissez faire approach to the proliferation and regulation of GM crops many food exporters in Canada are concerned about such trends. Of particular concern is the potential introduction of GM wheat (a product currently under development at Monsanto) into Canada.

On 31 July 2001 an unprecedented coalition of 210 major agricultural, environmental and citizens groups in Canada (including the Canadian Wheat Board, the National Farmers Union, Greenpeace Canada, and the Canadian Health Coalition) wrote to Prime Minister Jean Chretien asking:

"[That] you act immediately to prevent the introduction of GM wheat into Canadian food and fields unless the concerns of Canadian farmers, industry, and consumers are addressed adequately."

Perhaps the most remarkable participant in this coalition was the Canadian Wheat Board (CWB). Under a parliamentary approved monopoly the CWB is solely responsible for the sale and marketing of Western Canadian wheat and barley. It has annual sales of between Can$ 4 billion and Can$ 6 billion and is one of the world's largest grain marketing companies. Of particular concern to the CWB was the potential loss of major export markets if the conventionally grown Canadian wheat supply became contaminated by GM wheat. The stance taken by the CWB was strongly criticized by many pro-GM politicians, leading to the CWB softening its position on GM wheat before a parliamentary committee in November 2001. One MP noted that the CWB's participation in the aforementioned coalition resulted in the organization "sleeping with some pretty strange partners. "

Conclusions

The decision in Monsanto v Schmeiser raised more questions than it answered. It is clear authority for the proposition that multinational corporate patent holders can defend their intellectual property rights in the courts. It may also be viewed as an illustration of the inevitable consequences of increased corporate control over the fundamentals of agricultural production. Indeed, it may be further evidence of a fundamental power shift in global agriculture.

However, it should not be interpreted as a definitive or conclusive answer to the myriad of legal questions that the emergence of GM crop systems pose. As stated above, it is illustrative of the first stage in what is likely to be a long legal battle. At present, multinational corporate patent holders appear to possess a powerful arsenal of legal rights. However, with legal rights come obligations. The second stage of this legal battle, as evidenced by potential litigation in Saskatchewan and Argentina, may redress the current imbalance by outlining the obligations that are concomitant with the legal right to sell and exploit GM agricultural technology. In the light of Monsanto v Schmeiser the spread of such products may seem inevitable. However, if courts and governments begin to impose social and environmental obligations on the promoters of such technologies, their proliferation may not be a foregone conclusion.

The emergence of GM agricultural technology represents a major challenge to traditional agricultural practices and to the nature of farming itself. However, civil society still has a significant role to play in the determination of the manner in which such technology is introduced and adopted if at all. The decision in Monsanto v Schmeiser should be viewed as the catalyst for a global debate over the rights and obligations of the purveyors of such technology and not as evidence that the outcome of the debate has already been determined.


Martin Phillipson

College of Law, University of Saskatchewan, Saskatoon, Canada.
Phone (+1) 306 966 5892; Fax (+1) 306 966 5900; E-mail Martin.Phillipson@usask.ca

Sources
Critique of yield increase argument. http://www.psrast.org/sustbiotech.htm

Full text of Schmeiser ruling. http://decisions.fct-cf.gc.ca/fct/2001/03_2.html

other Monsanto court action. http://www.mindfully.org/GE/Monsanto-Beats-LA-Farmer.htm

for details of organic movement action. http://www.saskorganic.com/oapf.htm

Argentina's organic farmers action. http://www.gene.ch/genet/2001/Nov/msg00056.html

CWB on GM wheat. http://www.producer.com/articles/20011108/news/20011108news07.html



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