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Schmeiser loses to Monsanto, but he doesn't have to pay biotech giant

Note: Link to Supreme Court decision available at the end of this story and three news releases. (News release from IATP added in later on publish date.)

(Friday, May 21, 2004 -- CropChoice news) -- CBC news:
It was billed by some as a classic David-and-Goliath confrontation between a Saskatchewan family farmer and biotech giant Monsanto Canada - a case of the rights of the small farmer to continue a traditional way of farming. Others saw it as theft - a blatant attempt to take advantage of years of research and development of a better product, without paying for it.

For seven years, Percy Schmeiser has argued that seeds from Monsanto's patented genetically-modified canola landed on his 1,400 acre farm near Bruno, east of Saskatoon, by accident. Monsanto has altered the plant's genes to make the canola resistant to Roundup, a Monsanto weed killer. Monsanto patented the gene and the process of inserting it into the seed.

Percy Schmeiser Farmers usually use seeds from one year's crop to plant the next year's crop. But when they buy Roundup Ready canola from Monsanto, they have to agree to buy new seed every year. Monsanto says that's the only way they can recoup the money they've spent designing a better plant - the only way they can fund future research that will allow farmers to improve their crop yield.

Schmeiser argued that a company can't patent a plant - and he relied heavily on a previous case involving the question of whether higher life forms can be patented.

In the "Harvard Mouse" case, Canada's top court reinforced efforts to keep higher forms of life unpatented when it ruled that Harvard did not have a patent on its famous "OncoMouse," designed to quickly develop cancer. It took Harvard 17 years to develop the mouse. Canada stood alone on this issue, after the United States and Europe granted Harvard a patent.

Lower courts rejected Schmeiser's claim that the canola landed on his fields by accident, but didn't deal with the deeper issue of whether Monsanto can control use of a plant because it has patented a gene in the plant.

But Canada's highest court sided with Monsanto - in a five to four ruling. The court did agree with Schmeiser that the plant is a higher life form and cannot be patented, but said the patent does apply to the gene.

The ruling forces Schmeiser to turn over any remaining crops and seeds derived from Monsanto's product. But the court overturned a lower court ruling that he pay Monsanto the profits from his 1998 crop.

That 1998 crop began with what Schmeiser says was a discovery in a ditch by one of his fields a year earlier - canola plants. He says he did what most farmers do when he found those plants. He sprayed a herbicide on the wandering canola, but to his surprise and consternation, the herbicide did not kill the canola in the ditch. This is because the canola was designed to resist the weed killer. Scientifically, the Monsanto canola is called a "glyphosate-resistant plant."

Five farmers neighbouring Schmeiser used Monsanto seeds, paying the company a licensing fee of $15 an acre.

Schmeiser says he did a field test on three acres of his canola crop and discovered 60 per cent of the canola plants sprayed with Roundup herbicide survived in clumps, thickest in the ditch, thinner deeper into his canola crop. Schmeiser has claimed all along that the Monsanto canola must have blown onto his field, or fallen from passing trucks. Monsanto accused Schmeiser of stealing its seeds and sued him for illegally using its patented, genetically modified canola.

Percy Schmeiser Many Canadian farmers want the Monsanto seeds, but while they can buy it for a price, Monsanto keeps the rights to the DNA itself. That's what makes the seed special and that's where Monsanto makes its money. Some 30,000 Canadian farmers use the special Monsanto canola seeds. It's estimated that 40 per cent of the canola grown in Canada is Monsanto's Roundup Ready canola.

As in human beings, the DNA of seed is passed along from generation to generation. If there were no control mechanisms in place, a farmer could conceivably buy Monsanto's special seed once, pass the seeds from year to year and never have to pay for it again.

So the problem for Monsanto is protecting its investment. Farmers buying Monsanto's seed must sign a contract promising to buy fresh seed every year. Then they must let Monsanto inspect their fields for cheating.

Randy Christenson, Monsanto's regional director in Western Canada when this story first unfolded in 1999, said the company has to be tough. "We've put years, years and years of research and time into developing this technology," he said. "So for us to be able to recoup our investment, we have to be able to be paid for that."

"I've been farming for 50 years, and all of a sudden I have this," Schmeiser said. "It's very upsetting and nerve-racking to have a multi-giant corporation come after you. I don't have the resources to fight this."

Monsanto first got a tip about Schmeiser on the toll-free snitch-line it set up for farmers to turn in neighbours they suspect of growing the seed without paying. Monsanto hired private investigators from a Saskatoon firm to check out the tips. Investigators patrolling grid roads took crop samples from Schmeiser's fields to check for Monsanto's DNA. Monsanto called its investigations "audits."

"Yes, we do have a group that do audit, they do make farm visits, but they do it in a way that is extremely respectful to the farmers," Christenson told CBC News. "We never, never, go on their property, never, without their permission."

Documents from earlier court proceedings showed that Monsanto ordered its investigators to trespass on Schmeiser's fields and collect samples. Monsanto agents paid a secret visit to the company that processes Schmeiser's seeds for planting. Gary Pappenfort, manager of the seed-processing company, said a representative of Monsanto visited him and asked if Schmeiser had some seed treated there. The Monsanto agent asked for a sample of his canola and Pappenfort gave some to him.

Schmeiser says nature has been moving DNA around for thousands of years. "It will blow in the wind," he said. "You can't control it. You can't put a fence around it and say that's where it stops. It might end up 10 miles, 20 miles away." He once told CBC News Online that seeds can blow onto his farm from as far away as North Dakota.

Scientists from Agriculture Canada say wind can blow seeds or pollen between fields, meaning the DNA of crops in one field often mixes with that in another. Seeds or pollen can also be blown off uncovered trucks and farm equipment. But Monsanto seems to be saying it's up to farmers to dig out any Monsanto crops blowing into their fields. Several judges have agreed.

In 1998, Edward Zilinski of Micado, Sask., traded seeds with a farmer from Prince Albert. This is an old farming tradition. But the seeds he got in return had Monsanto's DNA. Monsanto told Zilinski that he and his wife owed the company more than $28,000 in penalties. "Farmers should have some rights of their own," Zilinski said.

Monsanto's actions have sparked the anger of many farmers in Western Canada. The Kram family in Raymore, Sask., said planes and a helicopter have buzzed their fields and agents dropped weed killer on their canola field, to see if the crops had the Monsanto gene. Monsanto said it had absolutely nothing to do with it.

"We are honestly disgusted with the way things are going," Elizabeth Kram said. "Who put the canola in? It is the farmer. It doesn't belong to Monsanto or anybody else and I don't see anybody else's name on the titles of all the land we own. It's my husband and myself. Nobody else. We're thoroughly pissed off."

In 2002, an Ontario report called for a review of the Federal Patent Act in order to avoid disputes over intellectual property that could keep doctors and researchers from developing treatments and tests.

In February 2003, the Canadian Biotechnology Advisory Committee - set up by the government to advise it on a wide range of biotechnology issues - released a series of recommendations on higher life forms and The Patent Act. Among them were:

  • Higher life forms (i.e., plants, seeds and non-human animals) that meet the criteria of novelty, non-obviousness and utility be recognized as patentable.
  • That a farmers' privilege provision be included in the Patent Act. It should specify that farmers are permitted to save and sow seeds from patented plants or to reproduce patented animals, as long as these progeny are not sold as commercial propagating material or in a manner that undermines the commercial value to its creator of a genetically engineered animal, respectively.
  • That the Patent Act include provisions that protect innocent bystanders from claims of patent infringement with respect to adventitious spreading of patented seed, patented genetic material, or the insemination of an animal by a patented animal.

In the end, Schmeiser called the legal battle a victory, in part because the court ruled that Schmeiser would not have to pay Monsanto's legal costs.

"We did not expect this to go all the way to the Supreme Court of Canada," he said in the wake of the ruling. "We were fighting for the fundamental right of the farmer to save his seed and use it year after year."

Monsanto has welcomed the Supreme Court decision.

"The Supreme Court has set a world standard in intellectual property protection and this ruling maintains Canada as an attractive investment opportunity," the company said in a release on its website. "Patent protection encourages innovations that will lead to the next generation of value-added products for Canadian farmers."

The Supreme Court decision should clear up some of the confusion surrounding this issue. But in the end, the federal government will likely have to clarify the rules on patenting organisms by bringing The Federal Patent Act into the 21st Century.

Source: http://www.cbc.ca/news/background/genetics_modification/percyschmeiser.html

IATP: Canadian Court Rules Against Farmers, For Monsanto
Fight to Protect Farmers’ Rights in Biotech Seed Disputes Will Continue

May 21, 2004
Contact: Kristin Dawkins, 612-870-3410, kdawkins@iatp.org
Ben Lilliston, 202-223-3740, blilliston@iatp.org

Minneapolis - In a blow to farmers worldwide, the Canadian Supreme Court ruled today that a Saskatchewan farmer, who claimed he was unaware that patented genetically engineered crops were growing in his field, had infringed on the intellectual property of seed developer Monsanto. The case represents a victory for the biotech industry and a loss for farmers' rights. Similar legal challenges between farmers’ rights and patented genetically engineered technology will likely continue in other countries, including the U.S.

"This case highlights the legal risks genetically engineered crops pose for farmers - even those who haven't purchased them," said Kristin Dawkins, Vice President at the Institute for Agriculture and Trade Policy. "Today's ruling is a major setback for farmers in Canada, and their ownership of what is grown on their farm. It's time to clarify these issues in the U.S. to better protect the rights of farmers."

Monsanto has sued hundreds of farmers over the last decade for using genetically engineered seeds without their permission. The Schmeiser case is likely the beginning of a series of complicated legal battles regarding genetically engineered seeds to take place in the coming years. Many difficult issues such as farmer liability when genetic contamination occurs have yet to be determined in U.S. courts. These liability questions are being driven by emerging evidence that genetically engineered crops are contaminating non-GE fields and the food supply at an alarming rate. According to a recent study by the Union of Concerned Scientists, genetically engineered DNA has contaminated traditional seeds of corn, soybeans and canola that had no history of genetic engineering. As a result, even farmers trying to grow non-biotech crops are finding their own farms contaminated.

In the case of Canadian farmer Percy Schmeiser vs. Monsanto, detectable levels of DNA from genetically engineered Roundup Ready canola were discovered on Schmeiser's farm. Schmeiser had not bought the GE canola, nor had he signed the seed contract that comes with such a purchase. But tests of the seed used by Schmeiser indicated that it had been contaminated with genetically engineered material. Monsanto sued Schmeiser to get payment on the genetically engineered canola. Also at issue was whether Schmeiser had the right to save seed from the crop thereby using the GE-contaminated canola in future years - a typical practice among many farmers.

"The traditional right of farmers to save seed is directly threatened by patented genetically engineered crops," said Dawkins. "This ruling takes away this basic right from Canadian farmers. Genetically engineered crops have already cost farmers hundreds of millions in lost exports to the European Union and Asia. These legal liability issues are another reason why this technology has not benefited farmers, and instead has been designed to benefit biotech seed companies like Monsanto."

As reported recently in Cropchoice, there are signs that U.S. Courts are awakening to the challenges of balancing farmers rights and those of biotech companies. In an April 23 opinion, Judge Arthur J. Gajarsa of the U.S. Court of Appeals for the Federal Circuit in SmithKline Beecham Corp. v. Apotex Corp., wrote: “Consider, for example, what might happen if the wind blew fertile, genetically modified blue corn protected by a patent, from the field of a single farmer into neighboring cornfields. The harvest from those fields would soon contain at least some patented blue corn mixed in with the traditional public domain yellow corn--thereby infringing the patent. The wind would continue to blow, and the patented crops would spread throughout the continent, thereby turning most (if not all) North American corn farmers into unintentional, yet inevitable, infringers. The implication -- that the patent owner would be entitled to collect royalties from every farmer whose cornfields contained even a few patented blue stalks -- cannot possibly be correct.” More on that ruling can be found at: http://www.cropchoice.com/leadstry.asp?RecID=2560

The Canadian Supreme Court ruling can be found at: http://www.lexum.umontreal.ca/csc-scc/ en/rec/index.html

IATP has produced the report, GMO Liability Threats for Farmers. It can be found at: http://www.gefoodalert.org/library/admin/uploadedfiles/GMO_Liability_Threats _for_Farmers_PDF_Ver.pdf

The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.


Monsanto news release on ruling
Supreme Court of Canada Finds in Favor of Monsanto in Schmeiser vs. Monsanto Patent Infringement Case

WINNIPEG, Manitoba, May 21 /PRNewswire-FirstCall/ -- Monsanto Canada today welcomed the decision of the Supreme Court of Canada in ruling that the subject matter claimed within its patent for Roundup Ready canola falls within the Patent Act and that Mr. Percy Schmeiser and Schmeiser Enterprises Ltd. of Bruno, Saskatchewan infringed that patent.

"We are gratified the Supreme Court of Canada found that Monsanto's patent pertaining to the Roundup Ready gene is valid and enforceable," said Carl Casale, executive vice-president, Monsanto Company. "The Supreme Court has set a world standard in intellectual property protection and this ruling maintains Canada as an attractive investment opportunity. Patent protection encourages innovations that will lead to the next generation of value-added products for Canadian farmers."

Monsanto originally pursued this case in the Federal Court of Canada because Mr. Schmeiser knowingly infringed Monsanto's patents on Roundup Ready technology by planting 1,030 acres of Roundup Ready canola without paying the required license fee for using the technology. After reviewing all the evidence, Justice Andrew MacKay of the Federal Court of Canada did not find Mr. Schmeiser's explanation of the events credible and held him liable for infringing Monsanto's patent.

"More than 30,000 Canadian farmers have chosen our technology because of the economic and environmental benefits it brings," said Casale. "We believe the Supreme Court of Canada decision is good news for farmers and Canadians, all of who benefit from the innovative work that is going on across the country to produce more abundant, high quality food."

As a result of his infringement, Mr. Schmeiser will be required to comply with several remedies awarded by the Courts, including: (1) an injunction against Mr. Schmeiser and employees of Schmeiser Enterprises that prohibits planting, growing, cultivating, harvesting, selling, marketing or distributing the patented technology in the future; (2) an order to deliver to Monsanto any seed in Mr. Schmeiser's possession known to contain the Roundup Ready gene. However, the Supreme Court determined there was insufficient evidence that Mr. Schmeiser intentionally made use of the benefits provided by Monsanto's technology by spraying his crop with Roundup. Therefore, the Court has decided that both sides will be responsible for absorbing their own costs.

The Supreme Court of Canada decision exhausts all legal avenues available to Mr. Schmeiser as it relates to the March 29, 2001 judgment rendered by Justice Andrew MacKay of the Federal Court of Canada.

Monsanto Company (NYSE: MON) is a leading global provider of technology- based solutions and agricultural products that improve farm productivity and food quality. For more information on Monsanto, see: http://www.monsanto.com .

Source: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-21-2004/0002179297&EDATE=

Greenpeace Canada news release
Farmer Loses Right to Farm GE Free, Monsanto Wins Right to Genetic Pollution

Ottawa, May 21, 2004 - Greenpeace is appalled at the result today in the case of Monsanto versus Percy Schmeiser, a Canadian farmer who Monsanto claims did not acquire a licence to grow his crop of canola which became contaminated by GE canola fields near Schmeiser's farm. In a 5-4 decision the Canadian Supreme Court held that Mr. Schmeiser had violated Monsanto's patent by planting seed from GE canola that had been found on his farm the previous year. The decision follows two major setbacks for Monsanto, who announced last week they would back off on plans to commercialize GE wheat globally and GE canola in Australia after strong consumer and industry resistance to the crops. In a small win for Schmeiser, he will not be required to pay Monsanto for the seed.

"This is a sad day for farmers worldwide," said Pat Venditti, genetic engineering campaigner for Greenpeace Canada. "Monsanto's canola has been contaminating the fields of Western Canada for years now, as there is no way to contain their transgenic pollution. Unfortunately the Court has held that Monsanto can keep polluting farmers' fields and keep menacing them with costly lawsuits. Farmers should be able to keep their fields GE-free, but the Court has held that's a decision best left to Monsanto."

In 1997, Schmeiser discovered, while routinely spraying herbicide along a ditch, that some of his canola plants had become herbicide-resistant - contaminated by pollen from Monsanto's patented herbicide-resistant canola. In August 1998, Monsanto launched a lawsuit against Schmeiser for patent infringement, alleging that Schmeiser had acquired and planted seeds containing patented genes without a license, and then sold harvested seed, thus infringing the company's patent. Mr. Schmeiser has become a globally known figure during his long legal battle with Monsanto.

In March 2001, the Federal Court of Canada ruled that Schmeiser was liable for having infringed Monsanto's patent. While the court found no evidence that Schmeiser had deliberately contaminated his crops with Monsanto seed, it ruled that the fact that Schmeiser had planted seeds containing patented genes meant Schmeiser had violated Monsanto's patent, regardless of how the genetic material got into the farmer's crops.

Schmeiser appealed the decision, and in May 2002 his case was heard in the Federal Court of Appeal, which upheld the lower court's decision. Schmeiser appealed again, and in January 2004 his case went before the Supreme Court of Canada.

Three main issues were deliberated by the Canadian Supreme Court:
1) The validity and scope of genetic patents - whether or not life forms may be patented.
2) What kind of use constitutes infringement? Schmeiser argued that since he never sprayed his plants with Roundup, and thus never took advantage of their herbicide resistance, he never benefited in any way from the presence of Monsanto's patented material in his crops. In this case, Schmeiser argued that as he did not exploit Monsanto's invention, he did not infringe Monsanto's patent.
3) The "innocent bystander" problem. Schmeiser argued that where patented material passively and inadvertently mixes with personal property, the property holder should not be held accountable to the patent holder. Instead, in such cases the innocent bystander should be protected by an implied license from the patent holder.

"Genetic contamination from genetically engineered canola is rampant," continued Mr. Venditti. "Monsanto has introduced an uncontrollable crop with no liability to farmers or the public. This ignores the widespread contamination being caused by Monsanto. The decision of the court essentially makes farmers liable to Monsanto for Monsanto's own genetic pollution. It means that Monsanto can reach into farmers' fields and steal their profits and livelihoods. This is why Greenpeace demands that Prime Minister Paul Martin announce the immediate implementation of a strict liability regime to protect farmers and the environment from genetic contamination caused by companies like Monsanto."

Follow the Greenpeace Global Campaign against GE on http://www.greenpeace.org/stopGMO

For more information contact:
Pat Venditti, Greenpeace Canada genetic engineering campaigner, cell: 416-450-2439
Andrew Male, Greenpeace Canada communications coordinator, cell: 416-880-2757

Supreme Court of Canada decision available at http://www.lexum.umontreal.ca/csc-scc/cgi-bin/disp.pl/en/rec/html/2004scc034.wpd.html?query=%22schmeiser%22&langue=en&selection=&database=en/rec&method=all&retour=/csc-scc/cgi-bin/srch.pl?language=en~~method=all~~database=en%2Frec~~query=schmeiser~~x=0~~y=0