CJEU GMO ruling could lessen CRISPR agri-patent worth but won’t stop filing

In a ruling that could discourage investment in gene-editing technologies such as CRISPR-Cas9, the CJEU has said that modified crops should be subject to the same stringent regulations as genetically modified organisms.

The judgment in the Confédération paysanne case (C-528/16) said that organisms obtained by mutagenesis are the same as genetically-modified organisms (GMOs) and must be governed by the provisions of the GMO Directive.

Agri-science organisations had hoped that organisms created with new, precise gene-editing technologies would be exempted from that law, which they argue was developed for older breeding techniques and places unfair restrictions on developing GM crops.

“It is now likely that much of the potential of these innovative methods will be lost for Europe - with significant negative economic and environmental consequences. That strikes a serious blow to European agriculture and plant science,” said Garlich von Essen, secretary general for the European Seed Association.

Many agri-science firms foresee this bleak future because organisms under the Directive can only be released into the environment or put on the market after an environmental risk assessment and public consultation.

The Directive also requires GMO organisms to be registered and related products to be labelled.

The GMO Directive includes a "safeguard clause" in Article 23 that allows member states to restrict the use and sale of GMOs previously approved by the EU. That means that even if a GMO product is authorised, states can opt-out and restrict or ban a GMO product.

This opt-out provision has been widely used before and could well be used when it comes to emerging technologies.

The CJEU went against the opinion given by Advocate General Bobek in January 2018, which said that organisms obtained by mutagenesis should be exempted from the GMO Directive.

“From a practical perspective this means that the use of the older, random methods of mutagenesis are likely to be more cost effective, reducing the incentive for development of new and improved crops by DNA-editing and impacting further innovation of the techniques themselves for use in agriculture,” says Penny Gilbert, partner at Powell Gilbert.

The first takeaway from this decision is that it does not affect the patentability of modified plants and organisms.

Catherine Coombes, patent director at HGF, explains that the GMO Directive is completely separate from the Biotech Directive and Article 53 EPC that provide exceptions to patentability in Europe.

The permanent working group on IP rights for the ALLEA (European Federation of Academies of Sciences and Humanities) considered whether there should be changes to the EU Biotech Directive in view of CRISPR-Cas9 technology in 2016.

It concluded that European patent law provided the necessary incentives for the successful development of CRISPR-Cas technologies while the EU Biotech Directive gave the necessary safeguards, and as such changes to patent law were not needed.

European patents covering CRISPR technologies for agricultural applications are and will almost certainly remain available, but this decision will likely make them less valuable.  

“If the regulatory burden is such that no one wants to enter the space, demand for licences will fall and that should necessitate a drop in price,” Jacob Sherkow, law professor at New York Law School, tells Managing IP.   

This fall could be a particularly large blow for agri-firms that have already invested heavily in CRISPR patents. DowDuPont, which had more than 500 CRISPR patents and was the most prolific filer for the technology as of December 2016 according to one study, would be hit particularly hard.

Sherkow adds that the market for such products is likely to be small, which makes the whole enterprise less profitable, and fights over IP for agricultural purposes will likely arise in the US as a result.

But the number of patents filed for CRISPR technologies for agricultural applications is unlikely to drop in Europe despite any loss in value.

Daniel Lim, senior associate at Allen & Overy, explains that because the regulatory regime for GMs is going down a more permissive path in the US, companies ploughing research into precision edited crops – such as DowDuPont, Monsanto and Syngenta – will seek appropriate global protection and patent designations, irrespective of this regulatory decision.

He adds that such companies will likely also hope that the position changes in future, and may still seek to launch edited products in Europe by complying with the onerous requirements of the GMO Directive, as implemented in each country, and subject to any additional national measures.

“The decision sets a hostile tone and environment for modified-agricultural products in Europe, which may have a chilling effect on investment in doing this work in the bloc specifically,” he says. “But my personal view is that if the research is happening somewhere in the world – which it will – then any ensuing inventions will still end up being patented in Europe.”