By Kevin E. Noonan –

The United States recently filed a Statement by the Antitrust Division of the Department of Justice under the provisions of 28 U.S.C. § 517 regarding the “Interests of United States in pending suits” in Corteva Agriscience LLC, Pioneer Hi-Bred International, and Agrigenetics, Inc. v. Inari Agriculture, Inc. and Inari Agriculture NV pending in the District of Delaware.

The Statement references the Government’s concerns with the agricultural sector of the economy, citing Department of Justice, Competition and Agriculture at 6, 13-14, 23 (May 2012), and Department of Justice, Antitrust Enforcement and Agriculture(Aug. 20, 2002).  The subject matter of this litigation is the seed industry, which “is highly concentrated with formidable market entry barriers, as ongoing consolidation has resulted in a global seed industry dominated by just a few companies,” the Government asserts, citing U.S. Department of Agriculture, More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs at 11 (March 2023) (“USDA Report”).  Examples of this concentration cited in the Statement are that (according to USDA estimates) “the top four firms [Bayer, Corteva, ChemChina, and BASF] hold 84% of the corn market and 79% of the soybean market” (elsewhere estimated at 95% and 84%, respectively), citing USDA Economic Research Service, Concentration and Competition in U.S. Agribusiness, Economic Information Bulletin No. 256, at 11 (June 2023), Concentration and Competition Report.

The issues provoking the Government’s interest involve Corteva’s IP rights, and the extent of disclosure by patentee under Ariad Pharm., Inc. v. Eli Lilly and Co., 598 F.3d 1336, 1353-54 (Fed. Cir. 2010) (en banc)(written description), through deposits of its patented seeds with the American Type Culture Collection (ATCC).  The Statement asserts that “[t]he boundaries of permissible conduct for the public to access and ‘read’ claimed patented material must be carefully policed to prevent the IP laws from being misused to blunt rather than foster innovation.”

For “nascent” companies there is a legitimate need for them to “accurately identify the extant products and the parameters of [the] IP protection” held by their larger competitors, the Statement asserts.  The nature of seeds and plant varieties prevents patents and patent applications to readily provide this information (i.e., by simply reading a patent specification), according to the Statement, leading to the filing of the Statement.

The Statement goes on to set forth the need for deposits to satisfy the written description and enablement provisions of 35 U.S.C. § 112(a) under certain circumstances and for some inventions under the provisions of the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure.  These include biological materials such as seeds, insofar as “[the material] cannot reasonably be enabled by a description in written form,” and thus must instead “be described in surrogate form by a deposit that is incorporated by reference into the specification,” citing Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956, 965 (Fed. Cir. 2002) (quoting 37 C.F.R. § 1.802(b)).  This has become “common practice” for such inventions, according to the Statement, citing Ajinomoto Co. v. Archer-Daniels-Midland Co., 228 F.3d 1338, 1345-46 (Fed. Cir. 2000).  This system has the added benefit, in the Government’s view, that “U.S. companies can access biological material deposited in foreign depositories” and vice versa to satisfy the requirements, citing Feldman v. Aunstrup, 517 F.2d 1351, 1355-56 (C.C.P.A. 1975).

Under these circumstances the question arose:  can you infringe a patent merely by obtaining access to information in a biological deposit?  Corteva sought on summary judgment to prevent disclosure of such biological deposit information by ATCC.  The Government’s position is that “the Court should not deem any activity to constitute ‘infringement’ if it is a means of accessing and ‘reading’ biological material that the law requires be made publicly available in exchange for a valid patent or other IP protection.”  In the context of ATCC deposits, Corteva’s objections run contrary to the provisions of 37 C.F.R. § 1.808(a)(2), whereby “all restrictions imposed by the depositor on the availability to the public of the deposited material will be irrevocably removed upon the granting of the patent.”

These provisions of the law and regulations rebut any allegations by Corteva that access thereof by Inari is “without authorization” and thus infringing under § 271, the Statement argues.  This is despite the reality that “‘reading’ deposited biological materials requires something more,” specifically “following the appropriate techniques to excise the [patented material] from the deposit[s]” under 37 C.F.R. § 1.802(b) as provided in Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956, 965 (Fed. Cir. 2002).  This is so because to do otherwise would prevent the public from receiving “meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time” (emphasis in Statement).  The Statement faults Corteva for recognizing the beneficial effects of depositing for protecting its patent rights but ignoring the concomitant public benefit from its disclosure to permit the scope of those rights to be appreciated.  And the Statement notes that regulations require that “all restrictions imposed by the depositor on the availability to the public of the deposited material will be irrevocably removed upon the granting of the patent.”  The access Inari demands are part of all those restrictions according to the Government.

The Statement also recognizes that there can be a requirement for “a certain process be followed for public provision of the material” (emphasis in Statement) but these should not constitute “contractual, extra-statutory encumbrances” imposed by patent holders or the depository.

In a footnote, the Statement somewhat ironically says “[m]ost of the filings in this case are under seal, and the United States has no access to them.”