Pepper decision means conventionally bred plants and animals get a chilli reception at the EPO

Dr Ben Tolley and Dr Nick Sutcliffe of the Life Sciences team look at the extensive ramifications of this landmark case.

Following decision G3/19 (“Pepper”)^[1] of the Enlarged Board of Appeal (EBA), plants and animals obtained from “essentially biological” processes will no longer be patentable before the European Patent Office (EPO). This decision only applies to pending European patent applications filed after 1 July 2017, when Rule 28(2) EPC was introduced.

For some time at the EPO, plant varieties and “essentially biological” processes for the production of plants and animals have been excluded from patent protection under Article 53 EPC (confirmed in “Broccoli” (G2/07)^[2] and “Tomato” (G1/08)^[2]). In this context, the exclusion of “essentially biological” processes is interpreted as encompassing processes for the production of plants based on steps of sexually crossing the whole genomes of plants and subsequently selecting plants (i.e. classical breeding), despite involving human intervention.

These exclusions to patentability are originally derived from Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions (The “Biotech” Directive)^[3] and were subsequently incorporated into the EPC as Article 53(b) EPC. In contrast, claims to biotechnological methods (e.g. gene-editing, transformation, and regeneration) of producing transgenic plants or animals and to tools such as markers for use in methods of breeding, can be allowable.

G3/19 – what has changed?

Until G3/19, it was possible to obtain patent claims to plants and animals or material thereof (e.g. fruit or seeds) resulting from biotechnological techniques and classical breeding techniques providing that the resulting product was new, inventive and could be reproduced reliably. This had been confirmed on several occasions including by the EBA; the highest decision-making authority at the EPO in the combined “Broccoli II” (G2/13)^[4] and “Tomato II” (G2/12)^[4] decisions, which concluded that the exclusion of “essentially biological” processes did not extend to products of those methods.

Despite providing much needed clarity and certainty, these decisions were not received favorably by some groups, especially plant breeders associations who argued that allowing the patenting of plants resulting from classical breeding is an unfair intrusion into the territory of plant variety rights (PVRs).

Whilst the EBA’s decision in G3/19 significantly changes the situation regarding the patent eligibility of plants, the decision itself concerns Rule 28(2) EPC, which was introduced by the Administrative Council (AC) on 1 July 2017. Its introduction followed lobbying and pressure from the European Union to limit the extent of patent protection available in this field in the form of a resolution by the European Parliament in December 2015^[5] and a non-binding notice from the European Commission in November 2016^[6]. The change to the Rules was extremely controversial, particularly in the absence of a reference to the European Court of Justice on the matter^[7]. The effect of the change was also unclear, with the Board of Appeal in T1063/18^[8] ruling that Rule 28(2) EPC was, as many had anticipated, in conflict with Article 53(b) EPC (as interpreted by G2/12 and G2/13) and should therefore be ignored (and declaring their intention to reach a similar conclusion in T2734/18^[9]). Following the issuance of T1063/18, the European Parliament issued a second resolution in September 2019 re-stating their view that the products of conventional breeding processes “must not become patentable”^[10]. The vigor with which EU institutions have pursued this issue reflects the strength of the concerns of the plant breeding industry and various pressure groups about the monopolization of plant genetic resources.

In deliberating on this issue in G3/19, the EBA therefore faced considerable pressure from both inside and outside the EPO to find a way to maintain the validity of new Rule 28(2) EPC despite the existence of their own earlier case law. In the face of this pressure, the EBA found a way to maintain the validity of both new Rule 28(2) EPC and G2/12 and G2/13. In other words, the EBA both had its cake and ate it. The key to reaching this solution was adopting a so-called “dynamic interpretation” of Article 53(b) EPC. This allowed the EBA to conclude that the correct interpretation of Article 53(b) EPC was set out in G2/12 and G2/13 but was altered by the subsequent implementation of Rule 28(2) EPC. According to the EBA, the new interpretation that is set out in new Rule 28(2) EPC applies to applications filed after the rule was implemented on 1 July 2017. Applications filed before that date will not be affected by Rule 28(2) EPC and will continue to follow the previous interpretation of Article 53(b) EPC set out in G2/12 and G2/13.

Since the decision cannot be appealed, G3/19 therefore gives a clear-cut date for the prohibition on plants and animals produced by “essentially biological” processes, which does at least provide some immediate clarity for patent applicants in the Agritech sector.

Although in some respects G3/19 provides a pragmatic solution to a thorny legal issue, the way the decision was arrived at may have some negative consequences for legal certainty at the EPO more generally. Whilst the EBA have always had the power to amend their own case law, in adopting the principle of “dynamic interpretation” the EBA appears to have jettisoned the principles of interpretation provided for in the Vienna Convention ^[11], ^[12], which led to a different conclusion in G2/12 and G2/13. If the EBA can take completely opposing positions on the interpretation of an Article of the EPC at different times, there can never be any certainty about the definitive interpretation of that Article. The EBA may even interpret Article 53(b) EPC differently again in a future decision if the legal and factual situation changes again. Therefore, whilst G3/19 brings an element of legal certainty to the patent eligibility of plants and animals in the short term, the cost of this may actually be a reduction in the authority of EBA decisions in general, and the introduction of more widespread uncertainty in the longer term that extends beyond Article 53 EPC to other Articles of the EPC. Indeed, if the AC can overturn G2/12 and G2/13 by simply re-writing the Implementing Regulations, can they overturn other EBA decisions in the same way? Furthermore, the willingness of the EBA in G3/19 to support the position proposed by the President and AC brings into question the independence of the EBA. This seems like a high price to pay for expediency, especially considering that a statutory mechanism already exists for amending the Convention (via diplomatic conference under Article 172 EPC or unanimous vote in the AC under Articles 33(1)(b) and 35(3) EPC, which was not achieved by the AC vote that introduced Rule 28(2) EPC). If, as the proponents of the rule change allege, all the Contracting States were in favour of new Rule 28(2) EPC, an identical outcome could easily have been achieved without these potentially damaging consequences.

Implications for the Agritech sector

The main impact of the EBA decision is that plants and animals obtained by classical breeding steps (i.e. those which only result in a mixing of genes of the parental lines) are no longer patentable before the EPO. The prosecution of European patent applications in this area, which had been stayed awaiting the outcome of this decision, will now resume at the EPO – those applications with filing dates prior to 1 July 2017 being allowed and those with later filing dates requiring amendment to avoid refusal. Although G3/19 allows those applicants to move forward with a degree of certainty, the change in position at the EPO will come as a disappointment to patent applicants in the Agritech sector with significant European markets, and those who filed patent applications based on G2/12, G2/13 and T1063/18. It is, however, likely to be well received by the European Parliament and Commission, who have devoted considerable time to this issue.

Plant breeders will also welcome the decision. To use plants encompassed by patent claims in a breeding program, plant breeders must acquire a license from the patent proprietor. This still applies to non-excluded plants, but the new legislation prevents future patent claims from covering plants obtained by classical breeding. Although these plants can still be protected by a PVR if the new traits are confined to a specific plant variety, a “breeders’ exemption” allows the free use of plant varieties protected by PVRs for further breeding. As a result, the extent of overlap between patent and PVR protection has been significantly limited.

The situation is less clear in respect of granted patent claims to plants obtained by classical breeding. Despite prohibiting patents on plants and animals produced by “essentially biological” processes filed after 1 July 2017, G3/19 also confirmed the validity of patents covering such plants and animals that were filed before this date. These patents will be in force for years to come. Since this was a key concern of the EU Parliament and EU Commission, it remains to be seen how these institutions react to the existence of these patents. G3/19 is not binding on national courts, so whether granted claims to plant or animal products obtained by classical breeding can actually be enforced is unclear. Indeed, prior to G3/19, the national legislation of 10 of the 38 EPC contracting states^[13-22], including those with the largest plant breeding sectors in Europe (the Netherlands, Germany, and France) already specifically prohibited patent protection for those products.

Agritech companies may now be forced to rely more heavily on the protection afforded by the PVR system to protect their products. However, the scope of protection offered by PVRs is much more limited than that afforded by patents, covering only traits confined to a specific plant variety. The lack of geographical alignment between EU and EPC territories also makes obtaining equivalent territorial coverage more complicated. Whilst a CPVR protects a variety in the 27 EU member states, separate national protection must be sought in EPC contracting states which are not EU member states. For example, the UK’s departure from the EU (but not the EPC) means that from 1st November 2020, UKPVRs must be applied for separately, in addition to CPVRs. The fees for a UKPVR are comparable to those for a CPVR covering the whole of the EU. Consequently, protecting varieties in both the EU and UK will be more complicated and expensive for applicants, which could have detrimental effects on the UK Agritech sector, stifling innovation or increasing the cost of new varieties.

One unfortunate result of the EBA decision G3/19 might be that innovators are discouraged from developing new plants or animals, and plant or animal material of significant commercial, environmental, and humanitarian value. Importantly for Agritech innovation in Europe, transgenic plants, and animals, those produced by gene-editing techniques and the biotechnological methods of producing them remain patentable. Regrettably, the current European regulatory regime is anything but conducive to protecting innovative plants and bringing them to market. Innovators in Europe already face some of the most stringent regulations on genetically modified (GM) organisms, reflecting a disproportionate focus on how a plant was produced, rather than the benefits and risks of the traits that it delivers. This irrational situation has been exacerbated by the EU’s treatment of precision geneedited crops as “conventional” GM organisms (thereby limiting their planting and sale too), rather than a technological refinement of traditional mutagenic methods^[23] - apparently also ignoring the difficulty in distinguishing gene-editing mutations from those which could occur naturally. As a result, Europe is out of step with regulators elsewhere, such as the US Department of Agriculture and others in South America, a situation which unfortunately results in inadequate protection for consumers and the environment. Whether the UK will implement a more favorable post-Brexit regulatory regime than the EU remains to be seen.

Although G3/19 will rightly meet with some criticism, it does demonstrate the power of political pressure in bringing about legislative change. If EU institutions can be convinced to devote a similar amount of time and resources to reforming the current regulatory framework in this area, Agri-technologies might start to realise their potential in addressing environmental and food security issues.

Practical points for your intellectual property strategy in Europe

Patent applicants in this area should consider the following points when deciding their strategy for protecting inventions concerning plants or animals in Europe:

• Avoid claims directed to plants or animals, and plant or animal material produced by classical breeding techniques in Europe. However, retaining this subject matter in the specification is advisable because obtaining granted claims to these products may be possible, or may develop, in other jurisdictions.
• Although G3/19 only applies to patents granted on or after 1 July 2017 or pending applications filed on or after that date, it is not binding on national courts, so whether granted claims to plant or animal products obtained by classical breeding can be enforced is unclear. If your budget allows, adopting a “wait and see” approach might be advisable.
• If the characteristic traits are confined to a specific plant variety, then consider filing PVR applications covering key plant products.
• Avoid claims to methods including steps of classical breeding (i.e. crossing and selection). Technologies which improve the production of plants or animals or improve the steps of crossing or selection involved in classical breeding are patentable and should be claimed in their own right. Careful claim drafting may be required.
• Patent protection is available for:
  • plant or animal derived products that are not propagation material, and in vitro plant or animal cell populations which are treated as microorganisms; and
  • transgenic or edited plants or animals, plants or animals obtained by mutagenesis, and/or biotechnological (e.g. transgenic, gene editing) methods of producing them.

References

1. G3/19 (http://documents.epo.org/projects/babylon/eponet.nsf/0/44CCAF7944B9BF42C12585680031505A/$File/G_3-19_opinion_EBoA_20200514_en.pdf)
2. Consolidated cases G2/07 (OJ 2012, 130) and G1/08 (OJ 2012, 206) ruling on the referrals in T83/05 (OJ 2007, 644) and T1242/06 (OJ 2008, 523)
3. Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions
4. Consolidated cases G2/12 (OJ 2016, A27) and G 2/13 (OJ 2016, A28)
5. European Parliament resolution of 17 December 2015 on patents and plant breeders’ rights (2015/2981(RSP))
6. CA/D 6/17 Commission Notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council on the legal protection of biotechnological inventions (2016/C411/03)
7. Snodin et al. Are changes to rules 27 and 28 EPC illegal? CIPA Journal, 46, July-August 2017
8. T1063/18 (“Extreme dark green, blocky peppers”)
9. T2734/18
10. European Parliament resolution of 19 September 2019 on the patentability of plants and essentially biological processes (2019/2800(RSP))
11. Vienna Convention on the Law of Treaties, Done at Vienna on 23 May 1969. Entered into force on 27 January 1980. United Nations, Treaty Series, vol. 1155, p. 331, Articles 31 and 3
12. Case Law of the Boards of Appeal of the European Patent Office, 9th Edition, III.H.1.1
13. Germany, § 2a (1) No. 1 German Patent Act 1936 (Patentgesetz), as published on 16 December 1980, § 2a (1) No. 1 introduced in October 2013
14. The Netherlands, Article 3(1), lit. c. and d., Dutch Patent Act 1995 (Rijksoctrooiwet 1995), valid from 5 June 2008
15. Italy, Article 45.4.b of the Italian Industrial Property Code (IIPC, Decreto Legislativo 10 febbraio 2005, n. 30 Codice della proprieta’ industriale) as amended in 2010
16. Austria, § 2(2) of the Austrian Patent Law 1970 (Patentgesetz) in the version published in the Official Journal on 1 August 2016; - 53 – G0003/19
17. Belgium, Article XI.5 § 1er, 3°, of the Belgium Code of Economic Law (Code de droit économique - Dispositions relatives au droit d’obtenteur) 2013 amended with effect from 1 June 2019
18. France, Article L611-19, I 3°bis, of the French Patent Act (Code de la propriété intellectuelle), as modified by Article 9 of the Law n° 2016-1087 of 8 August 2016 for the recovery of biodiversity, nature, and landscapes
19. Norway, Section C - chapter IV - 2a.3.2 of the examination guidelines of the Norwegian Intellectual Property Office, although Section 1(4) of the Norwegian patent law (Lov om patenter (patentloven) av 15. desember 1967 nr 9), last amended in 2013, does not deal with products obtained by essentially biological processes
20. Poland, Article 29(1)(ii) of the Polish Act of 30 June 2000 on Industrial Property Law (IPL), as amended by Article 1(4) of the Act of 16 October 2019 (Journal of Laws of 2019. Pos. 2309)
21. Portugal, Article 52(3)c) of the Portuguese Industrial Property Code 2018 (Código da Propriedade Industrial - IPC), Decree- Law 110/2018 of 10 December 2018, which entered into force on 1 July 2019
22. Serbia, Article 9(3) of the Patent Law 2011, in the version of 16 December 2018
23. Judgment of 25 July 2018, C528/16, ECLI:EU:C:2018:583 (http://curia.europa.eu/ juris/documents. jsf?num=c-528/162018)
    
    
    

This article was originally published in The Life Sciences Lawyer, Issue 3 2020. You can veiw the original article here (pgs 6 - 9).

About the authors 

This article was co-authored by Nick Sutcliffe and Ben Tolley.

Ben is an Associate and Patent Attorney at Mewburn Ellis. He does patent work in the life sciences sector. This includes drafting and prosecuting UK, European and International patent applications. The majority of Ben's practice is engaged in 'defending' or 'attacking' patents in opposition and appeal proceedings before the EPO. Ben has a first class honours degree from the University of Manchester, where he won the prize for highest-placed student in his year for biological sciences. He won a Sainsbury-sponsored undergraduate scholarship to the University of Cambridge to investigate plant molecular markers for climate change, and completed an undergraduate research placement at the Royal Botanic Gardens, Kew. He has a Sainsbury-sponsored PhD from the University of Cambridge, specialising in plant molecular genetics.