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July, 1994 -- Agracetus' cotton patent draws opposition

C S Prakasm prakacs at duc.auburn.edu
Sun Jul 17 12:43:18 EST 1994

Magazine: Bio/Technology
Issue: July, 1994
Title: Agracetus' cotton patent draws opposition
Author: George Kidd and James Dvorak

Agracetusi cotton patent draws opposition

George Kidd and James Dvorak

	As Calgeneis (Davis, CA) newly released Flavr Savr 
tomato now simmers in the spotlight of consumer scrutiny, a 
quieter controversy is bubbling in the agbiotech industry. 
For certain, this subject will be less public, but probably 
as profound in its implications, as Calgeneis genetically 
enginereed tomato. In October 1992, Agracetus (Middleton, 
WI), a division of W.R. Grace & Co. (Boca Raton, FL), was 
awarded a U.S. patent, number 5,159,135, covering all 
genetically engineered cotton. Because this patent is the 
first to cover an entire species, opponents fear that 
Agracetus, and its licensees, have been given the green 
light to monopolize all genetic improvements in cotton. 
These opponents have now geared up to fight the patent.

	Indeed, the patent has presented some adversaries an 
opportunity to resurrect ensconced issues about patenting 
life. Yet a review of now-ancient history quickly exposes 
these efforts as tired and fruitless. First, even though the 
Agracetus patent is species wide, patents with even-broader 
coverage have existed in many industries and been accepted 
for years. For instance, the Cohen-Boyer patent, which 
claims the invention of recombinant DNA, applies to the 
entire life-sciences industry. Second, and more 
specifically, in 1985 the Patent and Trademark Officeis 
(Arlington, VA) Board of Patent Appeals and Interferences 
ruled in the ex parte Hibberd decision that plants, and 
their parts, are patentable subject matter and are protected 
under Section 101 of the patent code. Finally, hundreds of 
patent applications and patents covering genetically altered 
crops are issued or in process.

	Activists, such as the Rural Advancement Foundation 
International (RAFI, Pittsboro, NC), have taken the lead in 
framing the oppositionis terms in this debate. Since the 
1970s, Pat Mooney of RAFI has advocated that improved crops 
are resources of common heritage and are therefore 
unsuitable for any form of exclusive control, including 
patents. A perpetual irritant to the seed industry, Mooney 
argues that the concentration of genetic research within 
multinationals may diminish the genetic diversity of crops 
over the long haul. Industry insiders say that several of 
Mooneyis contentions have little basis in fact. Despite the 
hundreds of seed companies lost through industry 
consolidation in the past two decades, over 4,000 seed 
companies still populate the globe, over a third of which 
conduct their own breeding, testing, or evaluation. Genetic 
diversity is a top objective among multinationals in their 
crop-improvement programs. In fact, claims of proper genetic 
diversity now serve to distinguish competitorsi seed 

	While some may discount Mooneyis apprehensions, none 
can deny the concerns now being expressed about Agracetusi 
patent. Government officials in India-the worldis third-
largest cotton-producing nation-are aware of the potential 
negative implications of this patent and are reviewing the 
situation. In January, an unidentified company filed a 
reexamination request on the patent, contending that 
Agracetus overlooked meaningful facts on transformed cotton 
that appeared earlier in a European patent application. 
Lawyers for the Department of Agriculture (Washington, D. 
C.) are considering pursuit of their own reexamination 
request on the patent. 

	On the other side of the issue, the cotton industry has 
aligned firmly with Agracetus. A recent industry position 
paper-authored by Calgene, Delta & Pine Land (Scott, MS), 
and Monsanto (St. Louis, MO)-points out that strong patent 
protection is essential for future competitiveness. Unless 
this incentive is in place, they assert, companies like 
Agracetus cannot rationally invest in technology 
development. David Anderson of Phytogen (Pasadena, CA) adds, 
"Activists have the effect of increasing the costs of 
defending patents. Ultimately, rising costs may prevent 
smaller companies from competing and may channel seed 
development into larger companies, which have the financial 
resources to defend their technical positions. Ironically, 
activists may be accelerating the decline of the small seed 
companies that they hoped to defend."

	As evidence of its practical management of the patent, 
and to diffuse critics who have highlighted its monopolistic 
ambitions, Agracetus has offered free research licenses to 
academic and government researchers. The company has granted 
nonexclusive commercial licenses to Calgene and Monsanto, 
and it is open to exploring licenses with others. Agracetus 
has also indicated that it has moved away from direct 
commercial involvement in improving agronomic traits for 
cotton, as it intends to work through others to improve 
cottonis yield, pest resistance, and tolerance to 
agchemicals. These actions legibly counteract claims that 
Agracetus is intentionally hoarding all of the patentis 

	Several have speculated about how Agracetus might 
manage this asset. Perhaps a Cohen-Boyer licensing 
arrangement, perfected by Stanford University (Palo Alto, 
CA) in the early 1980s, is appropriate. This approach 
involved a low, no-hassle annual licensing fee plus minimal 
royalties on products. However, the universe of companies 
commercializing innovations in cotton is finite, and the 
agronomic advantages from the technology could take years to 
develop. The risk of immaterial return for Agracetus renders 
this strategy less plausible. At the other end of the 
spectrum, W.R. Grace or Agracetus might recycle some portion 
of their gains from their patent to agbiotech researchers in 
developing countries. Some industry experts assert that this 
might turn the opposition on its ear and realign their 
interests with Agracetusi. A display of leadership would not 
be uncharacteristic of Agracetus. Finally, if interference 
disputes arise, they will likely be resolved by cross-
licensing. Whatever happens, Agracetus, as well as other 
companies in agbiotech, can rightfully argue that agbiotech 
inventors must be protected to the fullest extent of their 
discoveries, no matter how broad, or there will be little 
incentive to continue.                          

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