European Union: Clarifying Or Confusing? The European Commission Chews On Tomatoes And Broccoli

The European Commission Disagrees with the European Patent Office on the Patentability of Plants and Plant Parts Produced by Essentially Biological Processes

Following last year's decisions by the Enlarged Board of Appeal of the European Patent Office ("EPO") on referrals G 2/12 and G2/13 ("Tomatoes II" and "Broccoli II"), the European Commission ("Commission") issued an interpretative Notice on certain articles of the Directive 98/44/EC—known as the Biotechnology Directive—stating their view that when adopting Directive 98/44/EC, the EU legislator's intention was to exclude from patentability products (plants/animals and plant/animal parts) that are obtained by means of essentially biological processes.

In March 2015, the Enlarged Board of Appeal decided the Tomatoes II and Broccoli II cases, holding that, subject to the usual requirements of patentability, products derived from essentially biological processes are patentable, even if the process used to obtain such products is essentially biological and thus not patentable under Art. 53(b) EPC (see our Commentary on these decisions). Although these decisions confirmed established patent practice rather than setting new precedents, they provided (for a time) plant technology innovators the legal certainty needed to carry on their research and plan their IP strategies.

Apparently, these decisions caused concern among plant breeders, who consider that the patentability of such products creates a conflict with the exemption they are provided under the Community Plant Variety Regulation. This so-called breeders' exemption allows access to the genetic resources of protected plant varieties for the purpose of, inter alia, producing new plant varieties. As a result, on November 3, 2016, the European Commission issued an interpretative Notice (2016/C 411/03) on certain articles of Directive 98/44/EC on the legal protection of biotechnological inventions. In particular, the Notice sets out the Commission's view on the patentability of products emanating from essentially biological processes (Article 4), touching upon the issues of compulsory cross-licensing between plant variety rights and patent holders (Article 12) and issues related to access to biological material by a third party (Article 13).

Importantly, the Commission takes the view that the EU legislator's intention when adopting the Biotechnology Directive was to exclude from patentability products (plants/animals and plant/animal parts) that are obtained by means of essentially biological processes. With regard to the conditions for compulsory cross-licensing between plant variety right holders and patent owners in situations where a breeder would not be able to acquire or exploit a variety right without infringing a prior patent and vice versa, the Commission calls for more analysis of the requirement imposed on applicants for a license to demonstrate that the plant variety or the invention constitutes "significant technical progress of considerable economic value"1 compared with the patented invention or the protected plant variety. Finally, with respect to the issues on access to and deposit of biological material for the purposes of patent procedures, in particular to comply with the requirement of enabling disclosure, the Commission concludes that the Biotechnology Directive provides for balanced and sufficient accessibility to a sample or patented biological material deposited with a recognized depositary institution under the WIPO Budapest Treaty.

Whether this Notice will result in an amendment of the Biotechnology Directive is not yet clear. However, some EU countries were already concerned about the Tomatoes II and Broccoli II decisions, and they reacted by amending their national laws. This is the case in France, for example, where the Act n°2016-1087 of August 8, 2016, amended, inter alia, Article L.611-19 of the French Intellectual Property Code to provide that:  "not patentable are: ...  3°bis -Products exclusively obtained from an essentially biological process defined at 3°, including the elements constituting these products and the genetic information they contain."

Further, according to a Notice2 from the EPO, the President of the EPO has decided that, in view of the potential impact of the Commission Notice, all proceedings before the EPO examining and opposition divisions in which the decision depends entirely on the patentability of a plant or animal obtained by an essentially biological process will be stayed ex officio. The parties will be informed if proceedings are stayed, and any communications setting time limits to respond will be withdrawn with no further such communications being dispatched until resumption of the proceedings.

For now, national courts and patent offices must decide if they will continue to apply national patent law, which is required to implement the Biotech Directive, or follow the EPO in staying proceedings until the situation is clarified. In this respect, it should be noted that, as acknowledged by the Commission, the Notice is intended to assist in the application of the Biotechnology Directive, but only the Court of Justice of the European Union is competent to interpret EU law.

Footnotes

1 Article 12(3)(b) of the Directive 98/44/EC uses the wording "considerable economic interest" rather than "considerable economic value," which may be relevant to assessing the threshold for granting compulsory licenses. 

2 The Notice was published on the EPO website on December 12, 2016, in advance of its publication in the next issue of the Official Journal. The text of the Notice is subject to change in the meantime.

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