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Flower Power: Implications of extraterritorial expansion of 102(b) in plant patent cases

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A German geranium and South African rose may impact the intellectual property rights of inventors in the United States who sell their products abroad before securing U.S. patent rights.

The rose, JACopper, and the geranium, Pendec, are the subjects of two recent cases consolidated and decided by the Federal Circuit: In re Zary and In re Elsner. In these cases the Federal Circuit practically eliminated the "in this country" limitation in 35 U.S.C. Section 102(b). The decision expands the field of prior art for plant patents and will likely cause thorny, long-term implications for inventors in other fields, especially biotechnology.

Dr. Keith Zary, a plant breeder from South Africa, bred JACopper, and filed a non-enabling Plant Breeder's Rights (PBR) application with the European Community Plant Variety Office in 1995. Zary sold JACopper in South Africa and Zambia in 1996. In 2000 he applied for a patent in the United States.

Similarly, Wilhelm Elsner, a German plant breeder, bred Pendec, applied for a PBR in 1997 and sold the germanium in Germany in 1998. Elsner applied for a U.S. patent in 2000. Examiners in the United States Patent and Trademark Office (USPTO) rejected both applications under section 102(b), finding that the non-enabling PBRs coupled with the public sale of the plants sufficiently placed the public in possession of the new plant varieties.

Although consistent with deep-rooted Patent and Trademark Office policy in the plant patent area, the rejections surprised many patent practitioners because foreign sales of a patentable product usually cannot defeat patentability. Only sales of products "in this country" qualify as prior art under section 102(b).

Although commentators have assailed the "in this country" requirement as outmoded in light of modern commerce and the ability for the public -- particularly since the advent of the Internet -- to identify international sales, they assumed that weeding out the statutory limitation would require legislation.

Whether they intended to strike an extra-legislative ax blow to the "in this country" trunk or not, the patent examiners in the Zary and Elsner cases bypassed it by focusing on a different portion of section 102(b), which bars patentability if the "invention was patented or described in a printed publication in this or another foreign country ... more than one year prior to the date of the application in the United States." Thus, the examiners found that the published PBRs, combined with the foreign sales of the new plant varieties, provided an enabling disclosure sufficient to bar patentability.

On review, the Federal Circuit noted "it is undisputed that the (non-enabling) PBR applications were published more than one year prior to the effective filing dates ... It is also clear that the foreign sales of the Pendec geranium and the JACopper rose are not themselves section 102(b) prior art."

Normally, the inquiry would end here and the patent would issue. However, the government argued and the Federal Circuit agreed that the nature of plant patents, which give the patent holder the right to exclude others from asexually reproducing the plant, required an alternative result.

Thus, the public sale of the plant, though consummated in a foreign country, allowed one of ordinary skill in the art to reproduce the plant. Coupled with disclosure through the PBR applications, the foreign sales comprised sufficient disclosure to put the public in possession of the invention.

The Federal Circuit reasoned that an inherent difference between plants and other types of inventions exists, and attempted to limit the opinion to plant patents. Yet the primary case relied upon in the opinion stems from a very different field. The court looked to In re Argoudelis, 434 F.2d 1930 (CCPA 1970), where the deposit of an invention (i.e., a microorganism that produced antibiotic compounds) into a public depository sufficiently enabled a utility patent application.

Thus, the implications of the Zary/Elsner decision branch beyond plant patents, and inventors in other fields remain at risk that foreign sales coupled with non-enabling disclosures may act as a section 102(b) bar to patentability.

With the ever-expanding collaboration of multinational teams working on innovative biotechnological advances and outsourcing of research and development activities, the Zary/Elsner decision may threaten enlargement of the scope of patent-barring prior art for biotech utility patents. At particular risk to expansion of 102(b) beyond plant patents would be biotech inventions publicly sold or used abroad, but not yet disclosed in fully enabling publications such as new drug applications and new diagnostic procedures submitted to governmental agencies.

The Patent and Trademark Office is applying the Zary/Elsner prior art analysis with increasing frequency. A few weeks ago, in Star Fruits S.N.C. v. U.S., Case No. 04-1160 (Fed. Cir. Jan. 3, 2005), the Federal Circuit affirmed the examiners' right to demand information about foreign sales from patent applicants. These requests are catching patent applicants by surprise, a situation biotech practitioners should avoid.

Although the Federal Circuit has not yet applied its extension of section 102(b) to utility patents, Star Fruits and the Zary/Elsner decision itself suggest future expansion.

Specifically, expanding extraterritorial application of 102(b) from plant patents to utility patents is a small step given the Federal Circuit's reliance on In re Argoudelis and the outmoded nature of the "in this country" requirement. Hence, to avoid any future issues, biotech practitioners should carefully monitor foreign sales and ensure filing of patent applications within one year of such sales.

Hill is partner in the Irvine office of Howrey Simon Arnold & White, where he specializes in patent litigation, and writes frequently on 102(b) issues. Lindsey, who holds an M.A. in biology, is also a patent litigator in Howrey's Irvine office. Wu, who received his Ph.D. in biochemistry from M.I.T., is an intellectual property attorney in Howrey's Los Angeles office. The views expressed herein are solely the authors' and do not necessarily reflect the views of Howrey or its clients.

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