Placeholder Banner

Understanding the Wider Implications of HR 9: Patent Reform's Impact on Agriculture

July 9, 2015
The House Judiciary Committee recently approved H.R. 9, the Innovation Act, legislation they hoped would reduce frivolous patent-related litigation, frequently filed by so-called “patent trolls.”  Unfortunately, rather than surgically targeting abusive lawsuits, H.R. 9 would fundamentally alter the ability of legitimate patent holders to defend their rights.

Agricultural innovation, biotechnology and sustainable agriculture will help society meet monumental challenges presented by the expected growth in demand for animal feed, food, fibers, biofuels and pharmaceuticals.  However, if H.R. 9 were enacted, it would deter research into products that will improve plant and animal agriculture.

The fact is, research is time-consuming, uncertain and expensive, so strong patent protection is particularly critical.  On average, it takes more than a decade to commercialize an agricultural or health product derived via biotechnology and as once can imagine is very costly. H.R. 9 would weaken patent rights, which would discourage investment and make it more difficult for these products to be developed and marketed.

On July 8, 2015, BIO held a Capitol Hill Briefing on the impact of H.R. 9, the Innovation Act on agriculture. The panel included:

  • Brian Pomper, Executive Director, Innovation Alliance

  • Hans Sauer, Deputy General Counsel for Intellectual Property, Biotechnology Industry Organization

  • Jane DeMarchi, Vice President, Government and Regulatory Affairs, American Seed Trade Association

One overarching theme of the briefing was the fact that the world of patent litigation has significantly changed since the House of Representatives passed a version of H.R. 9 in 2013.  For instance, the Patent and Trademark Office (USPTO) has been given new powers.  The Supreme Court has ruled on six different patent litigations.  The Judicial Conference of the United States (which sets rules of procedure) has reset the playing field.  Lastly, the Federal Trade Commission has become more assertive in protecting consumers and small businesses against unfair accusations of patent infringement.

Hans Sauer made some excellent points distinguishing how patents affect hi-tech companies versus their impact and importance to Ag biotech companies. Sauer opened his remarks by stating that H.R. 9 is not concerned with patent quality or properly funding the USPTO but rather it’s about responding to the concerns of the hi-tech companies.

Sauer noted that many hi-tech products (such as smart phones) can have more than 1,000 patents covering their components and functions. In agriculture, the number of patents, e.g. those covering the components of a biotech seed, is around 10-15 or fewer.  This translates to biotech companies’ view that their patents are more valuable to them. Someone who wanted to produce a knockoff copy of a biotech seed only has a few patents standing in his way. That’s much easier than overcoming thousands of patents that protect a smartphone. Therefore, agricultural biotech companies depend much more on patents that are not only strong, but also enforceable. 

Lastly, Sauer argued that once an Ag biotech product has been regulated and placed on to the market, that company can no longer make changes to their product.

Nothing in H.R. 9 will benefit America’s farmers. To the contrary, the bill will make it harder to protect the inventions of those who innovate seed, feedstock, crop protection and weed control products and other tools of modern agriculture, and make it easier for foreign entities to copy American patented technology. Investors will be less likely to in invest in patented inventions.  This means less innovation, fewer jobs, slower economic growth, and a weaker America.

Industry Week published a good piece on H.R. and why it is a solution in search of a problem.