Court Refuses Interim Order in Strawberry Licensing Case

© DLeonis / Depositphotos.com
© DLeonis / Depositphotos.com

A U.S. district judge has refused to enter a temporary restraining order (TRO) against the University of California, Davis in litigation contesting the university’s alleged refusal to transfer or license strawberry germplasm developed in a university plant breeding program. California Berry Cultivars, LLC v. The Regents of the University of California, No. 16-cv-02477-VC (N.D. Cal. May 13, 2016). As explained in a prior blog post, the plaintiff, California Berry Cultivars (CBC), sued the university in a state court, alleging that it was liable for breach of contract, conversion, breach of fiduciary duty, and unfair competition in connection with the licensing and management of strawberry varieties developed by the university’s scientists. See UC Davis Sued Over Alleged Refusal to License Strawberry Germplasm, SullivanLawNet (May 10, 2016). The university subsequently removed the case to the U.S. District Court for the Northern District of California.

CBC asked the court immediately to issue a TRO directing UC Davis to deliver five plants of each of 168 strawberry cultivars to CBC or to an escrow agent pending resolution of the case. In a ruling entered on May 13, 2016, U.S. District Judge Vince Chhabria denied CBC’s TRO request.

Judge Chhabria did not rule definitively on the merits of CBC’s claims. Instead, for the following reasons, he determined that the balance of equities weighed against an immediate order to the university to transfer cultivar samples while the litigation was pending.

  • First, according to CBC’s complaint, the university first refused to license the strawberry cultivars in March 2015. Inexplicably, CBC waited more than a year after this refusal to file its action and request immediate relief. Such a long delay, the court wrote, “severely undermines [CBC’s] argument that it is entitled to the kind of extraordinary emergency relief it seeks.”
  • Second, CBC contended that two of its members–plant breeders previously employed by the university–retained ownership of intellectual property rights in the cultivars they developed as university employees. The court noted that it “appears” that the former employees may have violated “agreements to assign their intellectual property interests to the university–a fact which, if proved, might defeat CBC’s case on the merits.
  • Third, the court wrote that it was aware of no ” basis for the assertion in the complaint that the University has an obligation to generate revenue through licensing the cultivars specifically to CBC.”
  • Fourth, the court concluded that CBC had not demonstrated a likelihood of irreparable harm in the event the TRO was denied. “At most it has shown that it might miss out on the 2016 growing and breeding season,” the court wrote, “but any resultant monetary harm to CBC will be measurable and compensable in damages.”
  • Fifth, the court found that “it would be quite burdensome for [the university] to unfreeze five copies each of the cultivars at issue, when it already has a very small number of these back-up copies in cold storage, which the University retains for safekeeping.”

The denial of CBC’s TRO request is merely a procedural ruling and does not prejudice CBC’s ability to present evidence in support of its claims. However, the court’s comments in its order regarding CBC’s legal theories may foreshadow an uphill battle for the plaintiff.

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Prison Term for PVP Infringement by Alleged Wheat Bandit

On 14 April 2016, a criminal court in the Spanish city of Segovia sentenced an individual to a six month prison term for infringing the plant variety protection (PVP) rights of Limagrain Europe SA in the soft wheat variety known as CRAKLINGESLIVE v. Mario Gomez Luna, Sentencia 0014/2016 (Juzgado de lo Penal n°1 de Segovia 14 April 2016).

According to the court’s judgment, on 11 November 2013, the defendant transferred without authorization 800 kilograms of grain of the CRAKLIN variety which had been conditioned to be planted as seed. The court determined that the defendant had violated Article 274.3 of the Spanish Penal Code, which at the time prescribed a prison term of six months to two years for certain criminal violations of plant variety rights. In addition to imposing the six month prison sentence, the court ordered the defendant to pay a penal fine and to pay civil damages in the amount of €3500 to GESLIVE, Limagrain’s intellectual property rights enforcement agent.

It is worth noting that in 2015, after the events upon which this conviction and sentence were based, the relevant articles of the Spanish Penal Code were amended to increase the penalties for criminal PVP infringement. Effective from 1 July 2015, Penal Code Article 274.4 now prescribes a prison term of one to three years for any person who, without the authorization of the variety owner, with knowledge that the variety is registered, and for agricultural or commercial purposes, engages in the reproduction, sale, exportation, importation of, or possesses reproductive material of a protected variety.

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UC Davis Sued Over Alleged Refusal to License Strawberry Germplasm

Image of strawberryOn May 2, 2016, California Berry Cultivars, LLC (CBC) sued the University of California, Davis for breach of contract, conversion, breach of fiduciary duty, and unfair competition in connection with the flagship agricultural university’s management of strawberry varieties developed by its scientists. Verified Complaint, California Berry Cultivars, LLC v. Regents of the University of California, No. RG16813870 (Cal. Super. Ct. Alameda Cty 2016).

CBC claims that its members, former UC Davis plant breeders Doug Shaw and Kirk Larson, developed approximately 168 cultivars that are the subjects of pending patent applications and another approximately 250 varieties that “may have value as breeding stock.” According to the complaint, Shaw and Larson have assigned to CBC all of their non-patent rights in the germplasm.

CBC alleges that it has attempted to obtain licenses to the germplasm from UC Davis, but claims that the university has made the varieties unavailable to CBC and other California agribusinesses “in an apparent attempt to suppress competition.” CBC contends that UC Davis’s alleged refusal to license  the germplasm conflicts with agreements that Shaw and Larson entered into with the university when they were its employees, as well as with a 2015 settlement agreement between the California Strawberry Commission and UC Davis, in which the university agreed to keep its strawberry breeding program public.

In addition to asking for damages and injunctive relief against the university, CBC has asked the court immediately to enjoin UC Davis to deliver five plants of each cultivar in question to CBC or to an escrow agent pending resolution of the case.

On May 6, 2016, the university removed the case to the U.S. District Court.

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Yoga Sequence not Protected by Copyright, says 9th Circuit

Depositphotos_43752505_s-2015 © iphemantOn October 8, 2015, the U.S. Court of Appeals for the Ninth Circuit ruled that a sequence of yoga poses and breathing exercises was not entitled to copyright protection under the U.S. Copyright Act. Bikram’s Yoga College of India v. Evolation Yoga, No. 13-55763 (9th Cir. Oct. 8, 2015).

PLAINTIFFS’ CLAIMS. The plaintiffs contended that the yoga sequences in question–26 poses and two breathing exercises developed by Bikram Choudhury and described in his book Bikram’s Beginning Yoga Class–were entitled to copyright protection as a choreographic work. Since the enactment of the 1976 Copyright Act, “pantomimes and choreographic works” have been eligible for copyright protection. However, the court determined that although the poses and exercises possessed aesthetic attributes, “at bottom, the Sequence is an idea, process, or system designed to improve health.” For this reason, the court concluded that the sequence was ineligible for copyright protection under 17 U.S.C. § 102(b).

© vision.siTHE IDEA/EXPRESSION DICHOTOMY. Section 102(b) of the Copyright Act expressly excludes protection for “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” This statute codifies the well-known “idea/expression dichotomy”–the principle that copyright protects only the expression of an idea, but does not award exclusive rights as to the underlying idea itself. Other courts have invoked the idea/expression dichotomy to deny copyright protection to process-ideas such as meditation exercises, see Palmer v. Braun, 287 F. 3d 1325 (11th Cir. 2002), food recipes, see Publications International, Ltd. v. Meredith Corp., 88 F. 3d 473 (9th Cir. 1996), and a manual describing how to organize roller-skating races, see Seltzer v. Sunbrock, 22 F. Supp. 621 (S.D. Cal. 1938).

AN UNPROTECTABLE PROCESS, NOT A CHOREOGRAPHIC WORK. The claimants argued that the yoga sequence in question met the literal definition of a choreographic work as used by the U.S. Copyright Office. However, the court observed that the claimants themselves described the sequence as a “system” or “method” designed to “systematically work every part of the body, to give all internal organs, all the veins, all the ligaments, and all the muscles everything they need to maintain optimum health and maximum function.” In light of this and other statements by the claimants, the court concluded that they were “attempt[ing] to secure copyright protection for a healing art: a system designed to yield physical benefits and a sense of well-being. Simply put, this attempt is precluded by copyright’s idea/expression dichotomy, codified in Section 102(b).”

The court explained that even if the yoga sequence could be described in a manner that would meet the Copyright Office’s definition of a choreographic work, this would not alter the conclusion that the sequence constituted an unprotectable idea or process. The court wrote that,

The Sequence is not copyrightable as a choreographic work for the same reason that it is not copyrightable as a compilation: it is an idea, process,or system to which copyright protection may“[i]n no case” extend. 17 U.S.C.§102(b). We recognize that the Sequence may involve“static and kinetic successions of bodily movement in certain rhythmic and spatial relationships.” Compendium II,§ 450.01. So too would a method to churn butter or drill for oil. That is no accident: “successions of bodily movement”often serve basic functional purposes. Such movements do not become copyrightable as “choreographic works” when they are part and parcel of a process. Even if the Sequence could fit within some colloquial definitions of dance or choreography, it remains a process ineligible for copyright protection.

The idea/expression dichotomy … plays a similar role in defining the scope of protection for a choreographic work as it does for compilations…. In the context of choreographic works, that role is essential. Our day-to-day lives consist of many routinized physical movements, from brushing one’s teeth to pushing a lawnmower to shaking a Polaroid picture that could be … characterized as forms of dance. Without a proper understanding of the idea/expression dichotomy, one might obtain monopoly rights over these functional physical sequences by describing them in a tangible medium of expression and labeling them choreographic works. The idea/expression dichotomy thus ensures that expansive interpretations of the categories enumerated as proper subjects of copyright will, “[i]n no case,” extend copyright protection beyond its constitutional limits. 17 U.S.C. §102(b).

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Common Catalogue Listing not Proof of Plant Variety Rights Ownership

Italy
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In July 2015, a court in the city of Milan, Italy held that the Italian subsidiary of BASF failed to establish its ownership of plant variety rights in a lawsuit that BASF brought against a local company. BASF Italia S.p.A. v. Società Agricola Magnani Caterina e Magnani Lorenza, No. 8745/15 (Ct. Milan, Bus. Chamber A, 16 July 2015).

BASF Italia sued Società Agricola Magnani, alleging that it infringed European patents relating to its Clearfield® rice planting system and plant variety rights held by BASF in the variety POLLUX CL, a rice variety said to be especially resistant to imidazolinone herbicides. BASF first obtained, through ex parte proceedings, an order to search Magnani’s fields and to inspect rice seedlings and seeds found there. Subsequently, it sought an injunction and damages against Magnani for alleged patent and plant variety rights infringement.

Rice
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Responding to the patent infringement allegations, Magnani contended that it had been authorized by BASF to use the CLEARFIELD technology with respect to another rice variety known as SIRIUS. Regarding BASF’s allegations that Magnani had infringed BASF’s plant variety rights, Magnani observed that it had previously lawfully obtained a supply of seed of the POLLUX variety for experimental cultivation. It contended that any remaining POLLUX plants in its fields were being grown solely for propagating purposes, and thus its conduct was exempt from liability under Article 14 of Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights.

In a decision dated 16 July 2015, the court held that BASF had failed to establish its ownership of a plant variety rights registration for the POLLUX CL variety. According to the court, all that BASF had shown was that the variety was included in the “common Catalogue of varieties of agricultural plant species” established by Council Directive 2002/53/EC of 13 June 2002 on the common catalogue of varieties of agricultural plant species. That directive requires all EU Member States to publish one or more national catalogues of plant varieties accepted for certification and marketing in their territories. Among the criteria for recording a variety in such a common catalogue, the variety must be “distinct, stable, and sufficiently uniform.” The variety must also have a satisfactory value for cultivation and use.

The court acknowledged that the Directive 2002/53 criteria of distinctiveness, stability, and uniformity are similar to the prerequisites for registration of plant variety rights under Regulation 2100/94. However, the court emphasized that the inscription of a variety in the common catalogue–whose primary purpose is the protection of health–is not the equivalent of, or a substitute for, obtaining a registration for plant variety rights–whose object is to award intellectual property rights. In the present case, the court observed that the allegedly unauthorized reproduction by Magnani of the allegedly protected rice variety occurred prior to the appearance of the variety in the common catalogue. For these reasons, the court dismissed BASF’s allegations that Magnani infringed its plant variety rights.

With regard to BASF’s allegations that Magnani infringed its patents, the court determined that additional investigation was necessary before the court could address the allegations.

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Canadian Supreme Court: Claimants May Seek to Enforce Ecuadorian Judgment against Chevron in Ontario

Canada Supreme CourtOn 4 September 2015, Canada’s highest court dismissed arguments by US petrochemical company Chevron that Canadian courts cannot hear proceedings to enforce the US$ 9.51 billion judgment of an Ecuadorian court against it. Chevron Corp. v. Yaiguaje, 2015 SCC 42. The Ecuadorian judgment, which arises from alleged environmental contamination and destruction by Chevron’s predecessor Texaco in the Lago Agrio region of Ecuador, has been attacked by Chevron in other fora as a product of corruption and other unlawful practices instigated by the claimants’ attorneys. In the Canadian litigation, Chevron primarily argued that Canadian courts should not and could not hear proceedings to enforce the judgment because the Ecuadorian litigation had no relationship with Canada. In its 4 September judgment, however, the Canadian Supreme Court ruled that in such cases,

… the only prerequisite is that the foreign court had a real and substantial connection with the litigants or with the subject matter of the dispute, or that the traditional bases of jurisdiction were satisfied. There is no need to demonstrate a real and substantial connection between the dispute or the defendant and the enforcing forum.

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Criminal Convictions in Salmonella Case

food lawA U.S. federal jury convicted three former food company executives of several crimes relating to a 2008-09 outbreak of Salmonella infections resulting from the production and distribution of adulterated peanut butter. See Verdict Form, United States of America v. Parnell, No.  1:13-CR-12 (M.D. Ga. Sept. 19, 2014). The jury in Albany, Georgia found Stewart Parnell, one-time owner of the now-defunct Peanut Corporation of America (“PCA”), guilty of 67 criminal counts for offenses including mail and wire fraud, conspiracy, obstruction of justice, and the introduction of adulterated and misbranded food into interstate commerce with fraudulent intent. The jury also convicted Stewart’s brother, Michael Parnell, and Mary Wilkerson, a former quality control manager at one of PCA’s plants, of a smaller number of related crimes.

Although the defendants were not charged with having caused any deaths, hundreds of cases of sickness and nine deaths have been attributed to the Salmonella outbreak. See Unprecedented: Peanut Corp. executive convicted for deadly salmonella outbreak, Q13Fox.com (Sept. 19, 2014). Authorities identified a leaky roof and filthy conditions at a PCA manufacturing facility, as well as the presence of water in what should have been a dry process, as reasons for the contamination of PCA’s products with the deadly bacterium. According to prosecutors, the Parnell brothers employed fake laboratory tests to speed up the shipment of their products and distributed peanut butter and peanut paste despite their knowing that it was tainted with Salmonella.

Stewart Parnell could face more than 30 years in prison for the crimes of which he was convicted.

 

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3 Months in Spanish Prison for Plant Variety Rights Infringement

Jerez de la Frontera Flag, Spain.On July 10, 2014, a criminal court in southwestern Spain sentenced a grower of carnation flowers to three months in prison, plus a fine of € 360 EUR, for infringing plant variety rights in violation of Article 274.3 of the Spanish Penal Code. Sentencia No. 271/14 (Juzgado de lo Penal nº 1 de Jerez de la Frontera 10 Jul. 2014). The court, situated in Jerez de la Frontera, in the Province of Cádiz, Andalusia, ruled that the defendant had improperly acquired propagating material of the carnation varieties denominated WESTDIAMOND, HILOPTA, and HILQUEEN. Those varieties are protected under the European Union’s Community Plant Variety Rights legislation, which grants the breeders of novel plant varieties certain exclusive rights regarding the reproduction, commercialization, and distribution of propagating material of the varieties.

Plant Variety Rights InfringementActing upon information provided by Geslive, a plant breeders’ rights owners association, police searched the defendant’s greenhouses in 2006 and determined that he had been growing progeny plants of the protected varieties without authorization from the variety owner. The police discovered 200 square meters of HILTOPA plants and 2,400 square meters of carnations of the HILQUEEN variety. The exact quantity of WESTDIAMOND variety carnations could not be determined because the plants had either been removed from production or relocated to a different greenhouse.

Article 274.3 of the Spanish Penal Code provides for criminal punishment of up to six months’ imprisonment for certain violations of the rights of registered plant variety owners. News articles report that in the summer of 2014, a court in the city of Granada sentenced the manager of a seed company from Alpujarra to a six-month prison term for plant variety rights infringement. See Rafa Villegas, La Justicia castiga con 6 meses de cárcel a un empresario por reproducir judías protegidas, Frutas y Hortalizas de Almería (Jul. 2014) at 8. These cases follow a trend of recent years in which courts have meted out a number of prison sentences under article 274.3. See In Spain, Plant Breeders’ Rights Criminal Cases Draw Fines, Jail Terms, Acquittal, SullivanLawNet (Oct. 8, 2012); In Spain, Yet Another Jail Sentence For Plant Variety Rights Infringement, SullivanLawNet (Oct. 11, 2012).

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Ecuador: Change Constitution to Protect Traditional Knowledge

 

Ecuador map

Ecuador’s national government has proposed to amend the country’s constitution to provide special protections against the misappropriation of traditional knowledge and biological diversity. Propuesta de enmiendas constitucionales sobre la protección de los Saberes Ancestrales y la Biodiversidad del Ecuador, Secretaría de Educación Superior, Ciencia, Tecnología e Innovación (1 Sept. 2014).

The Ministry of Higher Education, Science, Technology and Innovation (known by the Spanish acronym Senescyt) concluded that current Ecuadorian law is inadequate to protect the ancestral knowledge of indigenous communities, as well as genetic resources within the country’s borders, against unscrupulous commercial exploitation by foreigners. With the aim of curbing such practices, Senescyt has proposed to amend articles 57 (rights of indigenous communities), 322 (intellectual property, collective knowledge, and genetic resources), and 402 (products derived from collective knowledge regarding biodiversity) of the 2008 Constitution of the Republic.

In a press release, René Ramírez, Minister of Senescyt, explained that,

Traditional knowledge is collective property that forms part of the system of human rights. Traditional knowledge and biodiversity are imprescriptible, indefeasible, and inalienable, and they are not patentable.

Ramírez emphasized that the government must create mechanisms for prevention, regulation, control, and sanctions because “at the moment we cannot do anything with regard to biopiracy because foreign researchers come [here], take the knowledge, make an innovation, and patent it outside the country.”

logo of UNASURAccording to the Senescyt press release, the proposed constitutional reforms would give indigenous communities the ability, through free and informed prior consent, to grant third parties access to their traditional knowledge in exchange for a just and equitable share of benefits. The release quoted María Inés Rivadeneira, the ministry’s Ancestral Knowledge Coordinator, as saying that the amendments were proposed following a meeting of the South American Council of Science, Technology, and Innovation of the Union of South American Nations (UNASUR), which discussed plans for a regional system of protection against biopiracy. According to Ms. Rivadeneira, the system would involve international monitoring to prevent overseas patenting, to commence legal actions against persons and institutions that inappropriately access biodiversity and traditional knowledge, and to establish a “blacklist” of the nations most guilty of biopiracy.

image of René Ramírez, Minister of Higher Education, Science, Technology and Innovation
René Ramírez, Minister of Senescyt

Mr. Ramírez can be heard explaining the need for the proposed constitutional amendments in an audio interview available here.

 

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Australian Full Federal Court Upholds Myriad Gene Patent

an image of the Federal CourtToday, in D’Arcy v Myriad Genetics Inc [2014] FCAFC 115, the Full Court of the Federal Court of Australia upheld the validity of Myriad Genetics’s Australian patent on methods and materials relating to the human  gene known as BRCA1.

THE BRCA1 GENE. Certain mutant alleles of the BRCA1 gene cause a predisposition to breast and ovarian cancer. Among other things, Myriad’s patent affords Myriad exclusive rights over a molecular diagnostic test that it developed to detect the presence of the BRCA1 gene and thereby to indicate whether an individual has an increased susceptibility to cancer.

an image of the DNA double helix

ISOLATED DNA. Claim 1 of the Myriad patent applies to “isolated” nucleic acid sequences corresponding to the relevant BRCA1 DNA mutations and polymorphisms. An “isolated” DNA sequence is one that has been removed from its normal cellular environment. Isolation is typically performed by cell lysis–bursting of the cell membrane or the nuclear membrane in order to release the DNA and RNA from inside–followed by chemical treatment to separate proteins from nucleic acids, centrifugation, and the application of enzymes to break down RNA and leave only purified DNA. The isolation process does not alter the sequence of nucleic acids; each strand contains both the protein-encoding “exons” and the non-coding “introns” as they existed in the cell prior to isolation. In this respect, DNA that has been isolated by extraction from a cell differs from synthetically-produced cDNA, which contains only exons and whose exact sequences are not found in nature.

ARGUMENTS AGAINST VALIDITY OF THE PATENTThe Myriad patent’s opponents, cancer survivor Yvonne D’Arcy and the group Cancer Voices Australia, contended that isolated nucleic acid is not materially different from cellular nucleic acid and that naturally occurring DNA and RNA, even in isolated form, are products of nature that cannot form the bases of a valid patent. The Full Court rejected this reasoning. In particular, the Full Court found inapposite a 2013 decision of the U.S. Supreme Court, which invalidated certain claims of a closely related U.S. patent owned by Myriad on the ground that isolated nucleic acid is a “product of nature” and thus is not patentable subject matter under U.S. patent law. See US Supreme Ct: Naturally Occurring DNA is Unpatentable Product of Nature, SullivanLawNet (13 June 2013).

AN “ARTIFICIALLY CREATED STATE OF AFFAIRS.” Observing that the Australian patent legislation differs from the U.S. Patent Act, the Australian court opined that it is unhelpful under the Australian legal regime to employ terms such as “the work of nature” or “the laws of nature” as a basis for denying a patent. “In Australia,” the court observed, “there is no statutory or jurisprudential limitation of patentability to exclude ‘products of nature.'” Instead, the court explained, the patentability analysis “should focus on differences in structure and function effected by the intervention of man and not on the similarities.” According to the Full Court, the key inquiry “is whether it consists of an artificially created state of affairs, not whether it produces or fails to produce an artificial effect.” The court concluded that the isolated nucleotide sequences claimed by Myriad did constitute such a state of affairs and as such were patentable. It wrote:

The isolated nucleic acid … has resulted in an artificially created state of affairs for economic benefit. The claimed product is properly the subject of letters patent. The claim is to an invention within the meaning of s 18(1) of the Act.

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