IP & Agribusiness: How GMOs, superfoods & the cannabis industry are shaping IP rights in Canada

Gowling WLG's Jeffrey Coles reveals four ways that biotech innovations are impacting IP protection

As an intellectual property lawyer and registered Patent Agent, I have always looked at the world with a keen interest in innovation.  My grandparents (both sides) were farmers and even many years ago, I was amazed at the technology available to assist in their business and livelihood.  But everything evolves, and this couldn’t be more true than recently observed at the intersection between intellectual property and agribusiness.  The technology that drives this industry has advanced at an incredible pace, from the development of new crop inputs, new plant varieties, and new harvesting/processing technologies to the advancement of refined data management and traceability systems.  Faced with challenges such as population growth and competition for finite resources, there has been a significant shift in agribusiness to focus on productivity and sustainability.

1. Agribusiness – Distinct from Food Law & Policy

Now more than ever, people are interested in understanding the nutritional value and supply chain for ‘the foods we eat’.  Intertwined and necessarily overlapping in scope, agribusiness and food law & policy are different facets of the industry. 

Agribusiness, as the name denotes, is the sector that supports the growth and sustainability of the agricultural industry – from businesses involved in the production, processing and distribution of agricultural products to those engaged in the advancement of technologies related to this purpose. 

Food Law & Policy, likewise as the title denotes, refers to the laws, regulations and policies that govern foods and beverages, including those pertaining to production, transportation, distribution, advertising, labeling requirements, waste and disposal, and interrelated issues such as workers’ rights, environment, and animal welfare.   

Although not typically associated with intellectual property, food laws & policies are frequent drivers of intellectual property in agribusiness.  For example, the recent legalization of cannabis in Canada and the governing laws and regulations associated with its production, distribution and sale, has stimulated the creation of valuable IP by both well-established cannabis companies and new start‑ups rushing to stake their claim.  Packaging requirements in the cannabis industry have created a resurgence in patent applications to child-resistant containers.  In addition, companies seeking to distinguish their cannabis products while complying with strict marketing restrictions on branding have turned to industrial design protection for aesthetic characteristics.

Thus, laws and regulations governing food, beverages and other recreational products are inseparable from intellectual property advances in agribusiness.

2. Genetically-Modified Foods & Intellectual Property (IP) Protection in Canada

The last few decades have seen the development of a variety of novel foods, including so-called “designer foods” and “superfoods”.  Novel foods are foods that do not have a significant history of consumption or are produced by methods not previously used for food. 

In Canada, novel foods are regulated under Division 28 of the Food and Drug Regulations and they include genetically-modified (GM) foods that have new or improved traits (e.g. herbicide tolerance, pest resistance, disease resistance, etc.).  Health Canada assesses the safety of all novel foods before they are authorized for sale in Canada.  The majority of GM foods approved for sale in Canada are from plants; however, the first GM animal (AquAdvantageä Salmon) was approved for sale in 2016.

Cultivation of GM crops has been widely adopted in the agribusiness sector, primarily for reasons of convenience and cost-effectiveness.  In 2019, GM crops were grown on over 190 million hectares of land worldwide – over 10% of the world’s arable land and increase from only 1.7 million hectares in 1996.  Canada was the fourth largest producer, with about 12.5 million hectares of cultivated area.

So, where do GM foods fit into Canadian patent law?  What avenues of patent protection exist?

The Canadian Intellectual Property Office (CIPO) considers lower life forms to be patentable, whereas higher life forms are not.  The distinction is generally whether the life form is unicellular (lower), such as bacteria, viruses, transformed cell lines, and cell clusters (e.g. yeast), which are patentable; or multicellular (higher), such as animals, plants, and mushrooms, which are not patentable.  Thus, GM plants and animals are not patentable per se in Canada.  However, there are alternate avenues of patent protection available for higher life forms in Canada.

GM plants and animals may be protected indirectly by patents covering the modified genes that make them unique.  Cells containing the modified genes may also be patented. These types of patents can prevent a third party from producing and selling plants and animals that contain the patented genes and cells, thereby providing protection akin to patents for the plants or animals themselves.  In addition, new methods of manufacture and new uses of the GM plant or animal may also be patented in Canada.  With respect to plant varieties, the ability to patent uses of the plant variety (or its seeds) could provide significant protection as the “use” could be for the production of progeny.  The “use” of GM animals could likewise have broad application.

Thus, even though a “higher life form” cannot currently be patented in Canada, there are nevertheless several indirect avenues available to provide potentially commensurate patent protection.

Notably, although GM foods have made a significant contribution to agribusiness, and will continue to do so, innovation is a continuing endeavor among agribusinesses.  It is foreseeable that there will be further refinement in Canada regarding the scope of the exclusion of patenting higher life forms.  Also, other technologies of importance in the agribusiness sector (e.g. artificial intelligence, data management software, etc.) will inevitably give rise to disputes on patentable subject matter in Canada. 

3. Plant Breeders Rights (PBR) versus Patent Protection

Unlike the United States where newly discovered and asexually produced plant varieties can be protected by plant patents, the only way to obtain direct IP protection for plants in Canada is under the Plant Breeder’s Rights Act (PBRA).

The PBRA represents a tailored form of IP legislation designed to protect new varieties of plants.  The PBRA was enacted in 1990 immediately following the Supreme Court of Canada’s decision in Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents) which held that a new soybean variety could not be patented based on an application that referenced a deposit of seed.  It was found that the deposit of seed did not meet the threshold of the invention disclosure requirements under Canada’s Patent Act.  The PBRA resolves this issue in having less onerous requirements than the Patent Act, including the ability to satisfy certain application requirements by providing a representative seed sample for the new plant variety (if reproduced by seed).

The PBRA is an important aspect of IP protection for agribusiness companies.  Plant breeding is a time consuming, expensive, and resource intensive activity, but once a new plant variety is created it can be quickly and easily reproduced.  As opposed to the exclusion of higher life forms from patent eligible subject matter, the PBRA allows for protection over parental lines, hybrids, and all propagating material (e.g. seed, cuttings, etc.).  Also, if the breeder is unable to exercise exclusivity rights on the propagating material, these rights can extend to the harvested material (e.g. grain, fruit, flower, etc.). 

Another significant aspect of plant breeders’ rights is that anyone who wishes to commercialize a plant variety that is essentially derived from a PBRA-protected variety (i.e. an essentially derived variety or EDV), will require authorization from the breeder of the protected variety.  This provision was enacted to encourage cooperation between breeders and developers of new technologies (e.g. companies developing GM foods).  The provision attempts to balance the rights to effective protection for the breeder, while stimulating further innovation in agribusiness.  Nevertheless, there is no doubt to be future disputes as to whether a particular plant variety qualifies as an EDV, and likewise breeders of protected varieties will always have concern that legal interpretations might give rise to a narrowing of EDV scope. 

Given the importance of certain plant varieties in the agribusiness space, it can reasonably be expected that litigation in Canada relating to EDV scope of protection is on the horizon.

Another topic of potential dispute, and possibly legislative reform, relates to the meaning of “harvested material” and the scope of protection for “products” derived from harvested materials.  The PBRA does not include a definition for harvested materials, and products stemming from harvested materials are not explicitly identified in the PBRA as being subject to protection.  Having regard particularly to new product offerings from Canadian cannabis companies and the commercial significance of certain cannabis strains, it may not be long before we see litigation on the scope of protection afforded to harvested material.  However, companies in the cannabis space tend to be very protective of their unique cannabis strains, so this may well be a non-issue (at least in the near future).     

4. Legalization of Cannabis and Impacts on Canadian IP Law

With the legalization of recreational cannabis in Canada in 2019, Canadian licenced producers are in fierce competition for the attention of consumers with different strains of cannabis and different commercial offerings. 

While trademarks play a significant role in brand protection, plant breeders’ rights also offer a hopeful avenue of protection.  However, the mechanisms of protection under the PBRA present challenges for companies in the cannabis sector.  To register and obtain protection for a new plant variety, the PBRA requires that the variety has one or more “identifiable characteristics” that is “clearly distinguishable” from other varieties already in existence. 

For new cannabis varieties, often the commercially important distinguishing characteristic is a biochemical trait (e.g. cannabinoid concentration and profile) as opposed to a trait evident by a phenotypic change (e.g. plant size, herbicide resistance, etc.).  Although there is no explicit statutory exclusion to basing distinctiveness on a biochemical trait, there is also currently no guidance on how such characteristics could be approved for registration, particularly having regard to other requirements for PBR protection, namely that the trait is new, distinct and stable.

For the PBRA to provide meaningful protection to licensed cannabis producers, as well as companies in various other sectors of agribusiness, clarification and guidance on the ability to protect varieties having unique biochemical traits would be welcomed.  This is not a Canada-centric issue, but rather one that the International Union for the Protection of New Varieties of Plants has been grappling with on the international stage for years.

***

Jeff Coles is a partner in Gowling WLG's Calgary office and a registered Canadian and United States patent agent. He is a lawyer who holds an advanced degree in biochemistry & molecular biology. He has been assisting clients with securing patent protection for their innovations for over a decade.

Jeff specializes in intellectual property matters involving innovation-intensive industries such as cannabis, agrotechnology, cleantech, life sciences, oil and gas, environmental technologies and energy.

His practice involves patent drafting & prosecution, patent litigation and industrial designs, including providing business-focused strategic advice on intellectual property (IP) portfolio and risk management, including in the context of commercialization and IP transactions. He has assisted companies in a variety of industries by coordinating intellectual property, regulatory and commercial strategies.

With client activities spanning the globe, Jeff has acted on behalf of a comprehensive range of clients, including entrepreneurs, start-ups, early-stage ventures, universities, government organizations, SMEs and multinational corporations.