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Monsanto Canada v. Schmeiser

May 21, 2004: The Supreme Court of Canada issued its decision in the Monsanto Canada v. Schmeiser case today. A majority of 5 to 4 held that a farmer who knew he was growing genetically-modified canola on his land violated Monsanto's patent in a modified gene and plant cells containing that gene. Monsanto held no patent on the entire plant. Despite the patent infringement, the majority held that Monsanto suffered no loss as the farmer did not receive any advantage from his use of the plants.

To arrive at its conclusions, the majority ruled as follows:

1. Genes and cells constitute patentable subject-matter in Canada;
2. A patent in a gene or cell gives the patent holder the right to prevent anyone from growing entire plants that contain that gene or cell. This is so despite the fact that the Court had earlier ruled, in the Harvard College case in 2002, that plants, animals and seeds are not patentable subject-matter in Canada;
3. A person violates a patent through 'use' where that person "uses the invention to further a business interest" or to derive "commercial benefit". The Court defined neither of these terms and the scope of what constitutes a business interest or commercial benefit is left uncertain;
4. A person who grows a plant subject to a patent in the genes of that plant does not 'use' the patented invention if he or she does not know that it is growing on his or her land or demonstrates that he or she would never use what is inventive about the plant. The person would have to take steps to remove the plant from his land, presumably at his or her cost, to demonstrate lack of intent to use; and
5. Damages for patent infringement are to be based on the added benefit accruing to the infringer from using the invention as compared to the benefit derived through alternative technology. Where the infringer extracts no added benefit, no damages are payable.

The dissenting opinion argued that the majority opinion failed to respect the Court's holding in Harvard College by granting patent rights that, in practice, extend fully to entire plants and seeds. The dissent argued that the scope of the patent claims must be read in light of the non-patentability of plants and seeds and so should not cover entire plants. In particular, the dissent made the following arguments:

1. Genes and cells constitute patentable subject-matter in Canada but entire plants and seeds do not;
2. Following on a series of recent Supreme Court of Canada decisions, the dissent argued that the determination of the scope of Monsanto's patent claims must be undertaken with a knowledge of what is legally patentable and of the purpose of the invention;
3. Such a method of claims construction leads to the conclusion that claims over genes and cells do not include using entire plants and seeds; and
4. The traditional test for 'use', in which invocation of the actually claimed invention is necessary, should be used to determine infringement.

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