Political Ecology of GMOs

A Middlebury blog

The Effect of Intellectual Property Rights in the United States’ Genetically Modified Seed Market

 

Lindsay Warne

Positionality Statement:

From an early age, my parents thought I was going to be a lawyer because I was always arguing about something. I am recently twenty-something Environmental Studies-Geography joint major from Sag Harbor, New York, which is a small, coastal community, two hours outside New York City. I am interested in environmental justice and urban planning. In the future, I see myself planning city parks and growing tomatoes in my apartment.

 

Intellectual property rights are the protections given to persons for the creations of their minds. These protections are seen as the best way to foster innovation, growth and competitiveness that define the American entrepreneurial spirit. The United States has some of the strongest intellectual property rights protections in the world.. As a result, private seed businesses have has intensely invested in the development of new genetically modified seeds and have profited immensely from from such products. Over ninety percent of the soybean, cotton and corn crop grown in the United States is genetically modified (Fernando-Cornejo: 2012).

Intellectual property laws give seed companies exclusive monopoly over their products and are seen as pro-competitive as each seed is a new product. However, business models of private seed companies has far-reaching implications for both the competition in the biotechnology industry and choice of American farmers. Political ecology can provide a theoretical lens to examine the consequences of an increasingly consolidated genetically modified seed market trough the historical and legal contextualization of intellectual property rights and their effects on the genetically modified seed industry.

Intellectual property law in the United States is derived from Article 1, Section 8 of the Constitution which states that Congress has the power to enact copyright and patent that gives creators exclusive rights to “writings and discoveries” of science and art (Cohen and Noll 2001: 461).  Therefore rights are granted for social purposes such as advancing knowledge or the promotion of useful products. There is an implied continuity in the advances of knowledge and technology.

Three characteristics define U.S. intellectual property law: one, rights are limited in time, rights are commercial in purpose and rights can be limited by other laws. Under these standards, patents are granted on the basis that it has a practical use and is a product, not an idea. (Cohen and Noll 2001:461). Naturally occurring elements such as salt or processes such as the Ford assembly line could not be patented. Further, copyright law is not meant to create a barrier to further innovation. One can patent a specific formula of mosquito repellant, but one cannot patent the concept of killing mosquitos in order to allow for new and sufficiently different methods of mosquito repellant to be developed without infringing on the previous patent.

Patents on genetically modified seeds are novel in redefining standards of what is patentable (Heller and Eisenberg 1998: 280). First, genes are naturally occurring, which were previously considered non-patentable. Until the Plant Patent Law of 1930, plants were not seen as patentable because they did not fit the written requirement description for patents (Blair 1999: 97, 232). Second, the commercial potential of genes is seen as somewhat limited, but patents have been granted for genetically modified seed nonetheless due to their potential for social purposes such as increase production to address hunger.

Granting patents for genetically modified seed allows for seeds to become commoditized. Seed as commodities is only a recent idea. Seed saving is an ingrained agricultural practice that has developed over generations of farming. Rights to use, reproduce and sell seeds to other farmers were assumed with first purchase of the seed. In the early history the farming in the United States seeds were seen as a common resource and there was little private investment in the industry (Ewens 2000: 86). The private seed industry continued to expand their ability to patent seeds, but seed saving exemption remained for farmers to control the means of production (Ewens 2000: 80-6).. However, hybridization[1], the process of scientifically breeding seeds, paved the way for company control of seeds that is present in today’s seed agreements and set the stage for today’s large agribusiness companies such as Monsanto (Ohlgart 2002: 473) (Stein 2005: 165).

The 1980 court decision Diamond v Chakrabarty established a legal precedent during the 1980s and 1990s that expanded the “privatization and commodification” of the genetics of seeds while simultaneous encroaching on the farmer’s seed saving exceptions (Aoki 2003: 285-86). According to the 1995 Asgrow Seed v Winterboer Supreme Court decision, seeds were seen as licensed commodities. Seed companies argue that strong intellectual property agreements protect the company’s investments in research and development. On Monsanto’s website in the Patents & Technology section, the company explains that patents are needed in order to protect the $2.6 million dollar research and development investment a year and that “no business can survive without being paid for its products.” (Monsanto Company 2013).

This legal and regulatory environment created a ripe atmosphere for intense consolidation of the seed industry as companies raced to control shares of the germplasm market. International seed corporations have been trending towards consolidation for the past forty years through horizontal (competitors) and vertical integration (multiple stages of production.. The goal of vertical integration is to own both the research and development companies that own the patent protection on the genetic traits as well as the seed companies that have established methods for product delivery (Howard 2009: 1271). Consolidation allows for companies to take advantage of economies of scale.

Monsanto Company is so prolific that it has become synonymous with the biotechnology industry itself. It is the most famous because it is representative of distinct trends occurring in the biotechnology industry. Monsanto was not heavily involved in the seed industry before the mid-1980s, but today is the world’s largest seed company (Srinivasan 2003: 519-20). Monsanto gained this position through intense research and development but also through a pattern of acquisitions, joint acquisitions and mergers with seed and other biotechnology companies. In 1998, Cargill sold its international seed division to Monsanto and formed a $50 million venture called Renessen. This gave Cargill access to Monsanto’s genetically modified seeds as wells as other inputs that allow for Monsanto to control the food chain from gene/seed to plate (Howard 2009: 1275).

Ten companies control two-thirds of the global proprietary seed market, with Monsanto making up to over a quarter of the market (ETC Group 2008: 12). The recent trend of mergers, acquisitions and consolidations between seed companies has heightened anti-trust concerns. To prevent violations, mergers must be approved by the Department of Justice to “ensure consumers will have the benefit of lower prices and greater choices in their selections of goods and services.” (United States Department of Justice 2010). Anti-competitive activities include price-fixing, for example, but in the case of biotechnology the cases call into question the “rule of reason”. This rule states that litigation must determine if the competitive benefits of a company’s actions outweigh the anti-competitive effects.

The Department of Justice assessment of a Monsanto and Delta & Pine Company merger revealed that Monsanto would be allotted ninety-five percent of traited cotton seed sales in MidSouth market and required that they modify their licensing agreement to allow for Monsanto and non-Monsanto trait stacking. Trait stacking is the combination of genes or traits in a seed product. This allows farmers to simultaneously use two types of traits such as herbicide resistance and insecticide resistance.

Monsanto’s tight control over their trait licenses has sparked concerns over Monsanto’s control over seed supply and genetic traits. For example, the RoundUp Ready trait has become so crucial that farmer need the trait, at a minimum. However, seed developers cannot stack a trait with RoundUp ready unless Monsanto grants permission through their patent license. If only Monsanto controls this important trait, it becomes a monopoly product.

The biotechnology industry relies heavily upon intellectual property rights enforcement but, by the nature of these protections, they can serve as anti-competitive barriers. Patents can be used as weapons to limit competition in the market. In 2009, Monsanto filed a suit against DuPont for patent infringement related to its soybean herbicide. The DuPont variety stacked a DuPont subsidiary trait and a Monsanto Roundup Ready trait and Monsanto argued that this violated their licensing agreement (Kilman 2009). The result of this court case was instead of a payout, a long-term, billion dollar licensing agreement between the two companies and a greater market share for Monsanto.  This agreement is threatening to both consumer choice and future biotechnological innovation.

The strength of intellectual property law in the United States incentivized increasing privatization of the seed industry. Through the expansion of patent law to plants, it became profitable to invest in seed varieties where previously seed saving traditions removed economic incentive. During the 1980s and 1990s, a series of Supreme Court cases continued to favor consolidation of the genetically modified seed market. The flurry of merger, acquisition and consolidations sparked antitrust investigations of private seed companies like Monsanto. As the largest biotechnology company, it can be seen as representative of trends in the industry. Through the actions of Monsanto, we see that although, intent of intellectual property rights is to foster innovation and competition, in the case of the genetically modified seed business the effect can be anti-competitive.  In order to ensure consumer choice and continued innovation, companies must be held accountable to antitrust legislation.

Monsanto by the Numbers

Annotated Bibliography

Howard, Philip H. “Visualizing Consolidation in the Global Seed Industry: 1996–2008.” Sustainability 1.4 (2009): 1266-287. Sustainability, 8 Dec. 2009. Web. 5 May 2013.

This paper gives an excellent overview of the general trends that occur during market consolidation. Further, the infographic is very enlightening and has been referenced by many blogs in the community of food activists.

 

Heller, Michael A., and Rebecca S. Eisenberg. “Can Patents Destroy Innovation? The Anticommons in Biomedical Research.” Science 280.5364 (1998): 698-701.Science. Web. 5 May 2013.

This article introduced me to the opposite effect that patent law can have on creativity and innovation. It is particularly useful because it helped me contextualize the biotechnology industry in terms of patent law in the United States.

 

Cohen, Linda, and Roger Noll. “Intellectual Property, Antitrust and New Economy.” University of Pittsburgh Law Review 453 (2001): n. pag. Web. 5 May 2013.

This article gave a great summary and provided me with a lot of background information on patent law in America. There is also a fairly detailed historical progression of patent law and it’s intellectual underpinings.

 Full list of the Political Ecology of GMOs annotated sources from all papers

Full Bibliography

Aoki, Keith, “With Seeds & Deeds: Recent Skirmishes in the Seed Wars,” 11CARDOZO J.INT’L &COMP.L. 247, 253 (2003).

Cohen, Linda, and Roger Noll. “Intellectual Property, Antitrust and New Economy.” University of Pittsburgh Law Review 453 (2001): n. pag. Web. 5 May 2013.

Who Own’s Nature? Corporate Power and Final Frontier in the Commodification of Life. Rep. ETC Group, Nov. 2008. Web. 5 May 2013.

Ewens Lara E., “Seed Wars: Biotechnology, Intellectual Property, and the Quest for High Yield Seeds”,23 B.C.INT’L &COMP.L.REV. 285, 295 (2000).

Fernando-Cornejo, Jorge. “Recent Trend in GE Adoption.” Adoption of Genetically Engineered Crops in the US. United States Department of Agriculture, 5 July 2012. Web. 5 May 2013.

Heller, Michael A., and Rebecca S. Eisenberg. “Can Patents Destroy Innovation? The Anticommons in Biomedical Research.” Science 280.5364 (1998): 698-701.Science. Web. 5 May 2013.

Horizontal Merger Guidelines. Issue brief. US Department of Justice and Federal Trade Commission, 8 Apr. 1997. Web. 5 May 2013.

Howard, Philip H. “Visualizing Consolidation in the Global Seed Industry: 1996–2008.” Sustainability 1.4 (2009): 1266-287. Sustainability, 8 Dec. 2009. Web. 5 May 2013.

Kilman, Scott. “Monsanto Draws Antitrust Scrutiny.” Wall Street Journal. N.p., 3 Mar. 2010. Web. 5 May 2013.

Ohlgart Samantha M, “The Terminator Gene: Intellectual Property Rights v. The Farmers’ Common Law Right to Save Seed, 7DRAKE J.AGRIC.L. 473, 474 (2002).

Parloff, Roger. “Monsanto’s Seeds of Discord: Full Version.” CNN Money. CNN, 11 May 2010. Web. 5 May 2013.

“Patents.” Monsanto Company Website. N.p., 2013. Web. 5 May 2013.

Stein, Haley. “Intellectual Property and Genetically Modified Seeds: The United States, Trade, and the Developing World.” Northwestern Journal of Technology and Intellectual Property 3.2 (2005): 160-78. Web. 5 May 2013.

Stone, Glen Davis. “Biotechnology and the Political Ecology of India.” Society for Applied Anthropology 63.2 (2004): 127-40. Web. 5 May 2013.


[1] Hybridization is a different process from genetic engineering. Hybridization is the crossing of two varieties of plants and can occur spontaneously as well as through close scientific monitoring by a breeder. Genetic engineering takes genetic material from one organism that could never be naturally found in the other organism (ie Bt bacteria and a cotton plant).

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