Saskatchewan canola growers were shocked to discover that genetically modified canola crops are patent-protected longer than originally thought, preventing them from saving hundreds of millions of dollars.
The Saskatchewan Canola Development Commission believed patents for the Roundup Ready trait would be expiring no later than 2012.
To prepare for that, it commissioned a study to determine how growers could benefit from what the association expected would be reduced technology use agreement fees and the development of low-cost generic alternatives to Monsanto’s flagship canola product.
Instead, they found out it is next to impossible for an outsider to figure out when patents are granted and expire. According to Monsanto, its Roundup Ready canola is protected until 2022.
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“We learned that it’s a complex business world out there and we may have been had a little bit in this process,” said commission chair Jim Caughlin.
The commission understands why agricultural biotechnology companies need to protect their intellectual property, but it has concerns with how long their patents run.
“We need those industries to give us improved varieties but we are limited in our ability to create some cost control in the process,” said Caughlin.
It questions the “evergreening” strategies employed by companies like Monsanto to extend intellectual property protection by filing new patents containing “uninventive” additions.
“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,” said Caughlin.
Monsanto Canada spokesperson Trish Jordan said the patent office doesn’t just rubber-stamp submissions.
“If you attempted to ask for a patent and you weren’t doing anything new or inventive, you wouldn’t get a patent,” she said.
Jordan said the confusion stems from a patent application the company filed on March 28, 1987.
Patents filed before Oct. 1, 1989, fell under the old patent act, which gave companies 17 years of protection from the date the patent was issued. The new act provides 20 years of exclusivity from the date of application.
“It’s a very important distinction,” said Jordan.
Monsanto wasn’t issued the patent stemming from the March 28, 1987, application until April 26, 2005, which means under the rules of the old act, it doesn’t expire until April 26, 2022.
Before this latest patent, Monsanto’s herbicide tolerant technology had been protected by a bevy of other patents. Jordan said the latest one protects all of its Roundup Ready canola products from potential competition from other glyphosate-resistant canolas.
At stake is hundreds of millions of dollars in extra annual revenue for canola farmers through reduced fees and expanded acreage generated by generic competition.
“The potential benefits to the Saskatchewan canola industry would range from $56 million to $205 million,” said the report to the commission.
That is based on the assumption that in the face of competition Monsanto would reduce its $15 an acre TUA fee. The range in savings depends on how drastically the fee is reduced and how many acres of Roundup Ready canola are planted.
“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,” said Caughlin.
Jordan said competition laws forbid her from talking about future pricing decisions, but she indicated that while TUA fees are reviewed annually, they are unlikely to disappear before 2022.
“We believe that Canadian growers will pay for innovation.”
If the technology wasn’t worth a $15 per acre premium, then growers wouldn’t be purchasing it, said Jordan.
“Clearly that is not the case,” she said, noting that the company enjoys about a 45 percent share of Canadian canola acreage.
Jordan said by the time Monsanto’s latest patent expires, the company should be able to fend off competition from generics by having released its second and third generation of higher yielding Roundup Ready products.
