EU Agrees on NGT Plant Regulation: What It Means for Patents and Licensing

The European Parliament and Council have reached a provisional agreement for plants developed using New Genomic Techniques (NGTs) – below we summarise the main points and set out the requirements relating to patents and licensing.

With the aim of enabling innovative plant breeding and to maintain Europe’s ability to be competitive in the International playing field, the proposal confirms that NGT-1 plants will undergo a verification process and, if they meet certain criteria, will be considered to be equivalent to a conventional plant. Only seeds and reproductive material will require to be labelled “NGT1”.  NGT2 plants and certain NGT1 plants with excluded traits will be regulated under the conventional GMO pathway.

Any form of ban on intellectual property relating to NGT plants now seems to have been firmly dismissed, which is in line with the findings of the Commissions’ study into the effect of patents relating to new genomic techniques (NGTs) on innovation in plant breeding and breeders access to genetic material. This study recognised that the EU agritech sector is structurally diverse, with many SME’s working in niche sectors alongside four multi-national players. However, a complex IP landscape and lack of transparency poses significant challenges for the SME’s in this sector, in particular in terms of the cost of freedom-to-operate analyses which may prevent them from using certain genetic material to avoid patent infringement risk. The study also recognises that the EU, being the second largest global seed market, requires IP in order to remain globally competitive. The study concluded that  “a balanced and coherent IP system is a key driver to innovation” and that facilitating licensing, rather than banning patents, is the key to fair and efficient innovation.

As such, the proposal confirms measures which aim to provide greater transparency and potential licensing standards:

• Mandatory disclosure of patents and pending applications when applying to register an NGT-1 plants or product. Details of such patents and applications will be held in a publicly available database. However, there doesn’t appear to be any obligation to disclose PVRs.
• Voluntary disclosure relating to the patent holder’s intention to licence the use of a patented NGT 1 plant or product, under equitable conditions.
• Creation of a “patenting expert group” focusing on the effect of patents on NGT plants. Within a year, the Commission will publish a study on patent effects and may propose an EU Code of Conduct on licensing within 18 months, setting fair terms and dispute resolution mechanisms in cases of unintentional minor presence of patented material.

The agreement awaits formal approval, and will be applied two years after it enters into force. Whilst the scope of the patent disclosure requirement requires further clarity, IP professionals may wish to start preparing for these obligations in terms of collating patent data and considering strategies for equitable licensing.

This article was written by Partner & Patent Attorney Punita Shah.