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Posted: January 09, 2007
SCDC Wants Producers to Benefit from Expiry of
Patents
The Saskatchewan Canola Development Commission
(SCDC) is concerned about the uncertainty of the patent issue
and the potential impact to the Saskatchewan canola industry.
Even though a number of canola-related patents should be expiring,
it isn't clear whether farmers will benefit from lower costs.
Early in 2006, the SCDC became interested in
three patent related issues:
- Canadian patents that relate to HT (herbicide
tolerant) canola,
- The potential for a research exemption in
Canada so that research could be conducted in advance of a patent
expiration,
- and what ( if any) the economic benefits
of the development and commercialization of a generic HT canola
could be.
Professor of Law Martin Phillipson and Research
Associate Stuart Smyth with the University of Saskatchewan were
enlisted to examine these issues. Their findings will be presented
Wednesday afternoon at the SCDC annual meeting in Saskatoon, a
meeting which is part of Crop Production Week (www.cropweek.com).
The preliminary findings in the study are:
1. Research exemptions do exist but are
presently limited to the pharmaceutical industry. It would appear
that it may be possible to use such an exemption to get regulatory
approval but the company cannot profit from development until
after patent expiry has occurred. Further inquiry with the Canadian
Food Inspection Agency needs to happen to rate the possibilities
of such opportunities.
2. Regulatory procedures to move towards
risk assessment of novel traits seem to be in excess of two years
- longer than even five years ago.
3. Potential economic impact on farmers
who would have access to savings gained from a reduced technology
use agreement (TUA) cost is estimated to be $56-205 million per
year in Saskatchewan alone. The range is wide because it represents
best/worst case scenarios of how many Roundup canola acres are
planted and also what the TUA may be. Both are unknowns presently.
Currently, the TUA is a $15/acre fee farmers pay to access the
Roundup Ready technology each year.
4. Some companies have used competitive
strategies such as a reduction in price for crop protection products
as patents expire and perhaps would look at similar reductions
in the price of technology use agreements in the near future.
Using such strategies hinges significantly on what follow-up patents
companies hold on improvements to the HT process. It is not entirely
known what "evergreening" strategies companies may
be using. Evergreening refers to attempts by a company to extend
a patent by extending the intellectual property protection by
filing new patents containing uninventive additions. More examination
is needed. Complicating this further is the fact that there has
been an 18 year delay between Calgene's patent filing in
May 1987 and the Canadian Patent Office patent granting in April
2005. The Calgene patent laid the groundwork for the introduction
of new traits in canola.
"The potential for economic gains with
the expiry of patents is significant, but it is frustrating to
not be able to ascertain when this may happen," says SCDC
Chair, Jim Caughlin, a farmer from the Tisdale area. "Farmers
want to be able to plan for such an occurrence and capture the
potential benefits. We are not finding fault with companies like
Monsanto - it is probably good business practice if they can extend
their patent protection. But on behalf of growers, we need to
ensure proper patent protocol unfolds."
"The Commission will continue to study
the issue in an effort to get a better idea of what the future
may hold," says SCDC Executive Director Laurie Hayes.
The Saskatchewan Canola Development Commission
(SCDC) was established in 1991 to represent Saskatchewan's canola
producers. Its mandate is to enhance canola producers' competitiveness
and profitability through research, market development and extension
activities.
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