Because No One is Immune to the Law
March 10, 2023 - Agtech, Intellectual Property, United States

USDA and USPTO Promoting Fair Competition and Innovation in the Seed Marketplace

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Update: USDA announced on March 23, 2023 that the Interagency Working Group on Competition and Intellectual Property in Seeds and Other Agricultural Inputs was officially launched

On March 6, 2023, the U.S. Department of Agriculture (USDA) released its report on “More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs,” which was prepared in consultation with the U.S. Patent and Trademark Office (USPTO), Department of Justice (DOJ), and Federal Trade Commission (FTC). The report is a response to President Biden’s Executive Order issued on July 9, 2021, titled “Promoting Competition in the American Economy,” which promotes a whole-of-government approach to competition and includes initiatives across federal agencies. One of these initiatives directed the USDA, in consultation with the USPTO, to prepare a report on concerns and strategies for ensuring “that the intellectual property (IP) system, while incentivizing innovation, does not also unnecessarily reduce competition in seed and other input markets beyond that reasonably contemplated by the Patent Act.” The report was prepared after a 90-day comment period, a public listening forum, and input from multiple interested parties.

While many commenters agreed that fair protection of IP was critical to continued innovation and investment in seed systems, concerns were raised that the current system and practices for protecting and enforcing IP rights for plant innovations may not promote fair competition. There were several primary areas of concern, including the following:

  • Difficulties in accessing information on existing IP rights associated with a particular plant variety. Commenters noted the various IP systems for protecting plant-related innovations and the lack of a consolidated source of information.
  • Application of patent standards on the examination of plant-related innovations. Concerns were raised around incomplete searching of non-patent sources.
  • Use and enforcement of IP rights for plant-related inventions, and the increased use of licenses that override research and breeding exemptions.
  • Commenters licensing IP from larger firms were concerned about the effects of consolidation on their choice of products and the competitive market environment.

In addition to these concerns, many commenters called for greater investment in public infrastructure around seed systems and plant breeding. The decades of underinvestment in public infrastructure were stated to have significantly reduced public infrastructure capacity, as well as farmer choice and the availability of varieties tailored to local circumstances. In addition, decentralized variety development capacity has been lost, which has resulted in vulnerable supply chains.

The report identifies three key topic areas to address these challenges:

  1. Provide and enforce robust and reliable IP rights that enhance innovation and promote fair competition;
  2. Ensure that IP owners can exercise their rights within the scope of fair competition provided by law; and
  3. Rebuild critical national infrastructures for variety development and the provision of seed and other planting stock to create resilient seed supply chains.

In order to deliver on these recommendations, the USDA will:

  • Establish a new Farmer Seed Liaison who will coordinate information sharing and work to reduce confusion for all parties operating in the complex seed system;
  • Form a working group with the USPTO to promote fair competition in the seed market, which will also work with the DOJ and FTC; and
  • Enhance transparency to farmers; for example, by expanding the portal, which enables farmers and seed businesses to report tips and complaints related to seed markets.

The USDA-USPTO Working Group on Competition and Intellectual Property has created the following joint initiatives:

  1. Exploring joint USPTO-USDA opportunities for collecting broader stakeholder input from researchers, plant breeders, farmers, and others in the seed and agricultural input markets;
  2. Pursuing additional opportunities to enhance the quality of the patent examination process for innovations related to agricultural products and processes, including for prior art search capabilities and additional training and guidance for patent examiners;
  3. Collaborating on new programs to enhance the transparency of IP information for agriculture-related innovations and assess the availability and viability of patented and off-patented germplasm; and
  4. Considering and evaluating new proposals for incentivizing and protecting innovation in the seed and agricultural-related space, including the broader adoption of research or plant breeders’ exemptions when U.S. utility patents cover seeds. 

The USPTO will be hosting a series of outreach events and listening sessions on these topics, and invites public participation in the process.

Please reach out to MoFo’s Plant IP team if you have any questions on the USDA-USPTO Working Group or the joint initiatives included in this report. We regularly monitor these developments and will post future updates on our blog.