The EU Parliament has voted on new legislature that could significantly shake up the patentability and commercialisation of gene-edited plants in Europe. The unintended consequences of these proposals could be disastrous for biotechnology companies and plant breeders across Europe and beyond.
BACKGROUND
Despite the widespread adoption of GMO plants in many countries around the world, currently, in the EU, all plants made using genetic engineering technology are regulated as genetically modified organisms (GMOs). This is the case whether they were generated through “traditional” insertion of transgenic material, or using so-called “new genomic techniques” (NGT) developed since 2001, such as CRISPR gene editing. Approval under this framework is challenging in the EU, and market reception to GMOs is hostile.
Conversely, “conventional” plants in which the genetic material is mutated using long-used and non-specific methods such as chemical mutagenesis, are unregulated and are not treated as a GMO.
Paradoxically, conventional plants that are unregulated are also unpatentable across the EU, whereas the GMO and NGT plants are patentable at the European Patent Office (EPO) and national patent offices, yet fall within the onerous regulations.
To address this, a new proposal before the EU Commission sought to create a streamlined regulatory process within the EU for certain plants obtained by new genomic techniques. If passed, certain NGT plants would be considered equivalent to conventional plants, provided that the gene edits meet certain criteria (essentially limiting the number and type of changes in the genetic code). These “category 1 NGT” plants would be regulated as if they were obtained solely through normal breeding techniques. Other NGT plants and those obtained through established pre-2001 transgenic techniques will remain GMO. This news was initially welcomed by the biotechnology sector, as this framework is far less onerous, and provides a route to market for gene-edited plants across the EU.
However, any optimism was quashed by an amendment proposed by MEPs, introducing an exclusion from patentability for NGT plants, plant material, and parts thereof. It would achieve this through amending EU Biotech Directive 98/44/EC. If implemented, the proposal would therefore move any plant made with gene-editing technologies developed since 2001 outside the scope of patent protection. Concerningly, the exclusion does not distinguish between the different types of NGT plants and, if adopted, those falling outside “category 1” would become unpatentable whilst still remaining regulated as GMO.
On 7 February, the proposal at the EU parliament passed with 307 votes to 263 and 41 abstentions. Parliament is now ready to start negotiations with EU member states on the final law.
ANALYSIS
We have many questions about this proposal, which in our view does little more than create uncertainty for biotechnologists and plant breeders alike.
The effect of the proposed patentability exclusion is unclear, especially at the EPO. Whilst the Biotech Directive is not the primary legislature at the EPO, it is a “supplementary means of interpretation” that factors into their thinking on plant-related inventions. Historically, the EPO has viewed the goal of harmonisation of its law and practice with the EU Biotech Directive as “generally recognised”. This remains a slow process, however, and the patentability of plants at the EPO has shifted back and forth over the last 15 years, in part due to efforts to reconcile practice with the EU. Any further changes can only bring more legal uncertainty. Additionally, as patent infringement is brought at the national or EU level, where courts are more firmly bound by the Directive, the enforceability of existing patents or those caught in any “transition period” would be in question.
Moreover, as the EPC covers multiple non-EU states such as the UK and Norway, the proposed changes could go beyond the EU. This could however lead to opportunities, especially if practice diverges between the EPO and these national offices. In the UK, the recent Genetic Technology (Precision Breeding Bill) suggests a desire to create a world-leading, biotech-friendly environment around gene editing. If this trend continues, and the UK adopts similar regulatory changes without a patentability exclusion, innovators may view direct UK national patents as valuable alternatives or additions to their EP rights, in order to provide protection for NGTs.
Regardless, this uncertainty will have a chilling effect on the biotechnology sector. Patents remain an important part of the value proposition for biotech companies, especially at the proof-of-concept stage, and any expansion of existing exclusions from patentability is going to damage the companies affected. The proposal greatly decreases the attractiveness of cutting-edge genetic techniques such as CRISPR in plant biotechnology, effectively limiting innovators to tools developed over 20 years ago if they want to secure patents, begging the question - what was the point? The exclusion will also drive a wedge between plant/algal biotechnology, which is affected, and human/animal science which is not.
The proposal also creates uncertainty for plant breeders. Regulatory approval for NGT plants will effectively introduce a large amount of genetic material into the breeding pool, some aspects of which will be covered by patent protection. This would be the case even without the proposed amendments if “historic” patents remain valid and in force. The effect is a far more complicated IP landscape, and a large burden on breeders to either obtain multiple licences to develop new varieties or cross out any genetic modifications that are covered by patents. Whilst this might be mitigated in part through the creation of patent licensing “pools”, this requires significant coordination in a fragmented market. Whilst large international breeders may be able to take advantage of this relaxation of rules, smaller breeders will likely find it harder to compete.
CONCLUSION
In October 2023, the EU Commission identified biotechnology as one of four “critical” areas of technology for future security and prosperity, and Europe is particularly well-positioned to take a leading role within it. It is precisely this recognition that makes the recent proposal so disappointing. There is a real need across Europe and its neighbours for a legal and regulatory framework that can unlock this potential, safeguarding investment whilst incentivising innovation for large and small outfits alike. Unfortunately, this proposal fails to achieve this and merely provides yet more uncertainty to an already afflicted area of technology. It remains to be seen how it is implemented into the law of the nation-states, however, we expect that the situation will become more unclear before they improve.
We will be watching this story closely, and hope for future clarity.
