Advocate General Mengozzi releases opinion on Monsanto v. Cefetra

Advocate General Mengozzi releases opinion on Monsanto v. Cefetra

George Nathanael is a JD candidate at Osgoode Hall Law School.

Last week, Advocate General Paolo Mengozzi of the European Court of Justice released his opinion on the questions referred by a Dutch court concerning the case of Monsanto Technology LLC v. Cefetra BV and Others. The case involves Monsanto’s attempt to prevent imports of Argentinean soy meal, which has been found to contain the DNA sequence protected by the company’s Roundup Ready soybeans patent.

However, this protection does not exist in Argentina, where Monsanto does not hold such a patent. Nonetheless, Monsanto brought a suit against the companies that imported the soy meal for infringing its patent in Europe, based on the protections granted under the European Parliament’s Directive 98/44/EC. Article 9 of the directive is particularly important, and reads, “[t]he protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material, save as provided in Article 5(1), in which the product [is] incorporated and in which the genetic information is contained and performs its function.”

The first question referred by the Dutch Court asked whether Article 9 of Directive 98/44 must be interpreted such that patent protection ought to be applied in cases such as the current one where the DNA sequence forms part of the material being imported into the EU but is not performing its function at that time. Monsanto’s patented DNA in question allows soybeans to be resistant to its Roundup herbicide, but this function obviously does not apply to the soy meal. However, it is likely that the soy meal was derived from plants that were resistant to Roundup due to their DNA sequence, and the meal can also potentially be used to create such plants in the future; both are situations in which the patented sequence would be performing its function.

In interpreting this first question, Advocate General Mengozzi said that he would not take a narrow approach such that the genetic information had to be performing its function at the exact same time as the alleged infringement (e.g. in this case, be actively blocking the normal effects of Roundup herbicide as it was being imported). However, he still stated that the additional patent protection of Article 9 must be purpose-bound and only cover the purpose found within the patent, which in this case would not be applicable to the residual DNA found within the soy meal after the plants had been processed. He made the argument that to do so otherwise would allow for “protection for all other possible functions of the same sequence... [which] in practice, make a mere discovery patentable, in breach of the basic principles on patents”.

The second question referred asked whether the protections afforded in Directive 98/44, especially Article 9, could be extended by parallel legislation that is enacted nationally. Advocate General Mengozzi stated that “[t]he body of rules laid down in Directive 98/44 is not complete, but must be deemed to be exhaustive in the areas with which it deals: the corollary being that, in those areas, national legislation cannot provide for a level of patent protection which is wider than that provided for under the directive”. In coming to this conclusion he stated that the main goal of this legislation was not to extend protection for genetic patents, but rather to have consistent laws among EU member states. He also said that granting patent-holders more generous rights would run counter to the objective of promoting the market and competition.

The third question asked whether it mattered that Monsanto’s patent was granted under national patent legislation and before Directive 98/44 was adopted, to which the Advocate General answered that it did not. He came to this conclusion based on a lack of transitional provisions in the directive, the Court of Justice’s past interpretations of similar questions dealing with EU legislation, and the fact that having a multiplicity of laws apply would create difficulties in trade that the legislation was trying to avoid in the first place.

The fourth question had to do with the possibility of the above interpretations conflicting with Articles 27 and 30 of the TRIPS Agreement. The opinion was that no possible conflict could exist. Article 27 has to do with patentable subject matter and not protection, and Article 30 deals with exceptions to patent protection, where the purpose-bound interpretation of Directive 98/44 has to do with the extent of the protection.

Advocate General Mengozzi’s answers to the questions referred, especially the first and second, could potentially have far-reaching consequences for EU members and companies with patents there. If the protections of Directive 98/44 are exhaustive, and must be interpreted as falling under a purpose-bound scheme, this can potentially open the door to what should otherwise be protected substances being openly traded in forms that are not caught by legislation, thereby increasing access to them so that a patent-holder’s rights are more easily infringed in the future. It can also be argued that preventing a member country from enacting legislation that gives more rights to patent-holders could result in a disability in negotiating deals with outside states and companies. Of course, this limitation on sovereignty can be said to simply be the consequences of being a member of the EU. Though the Advocate General’s opinion is non-binding, it carries much weight and has a high chance of being followed.