Case Comment

Monsanto Canada Inc. v. Schmeiser

citation(s): 2002 SCC 76; [2002] 4 SCR 45; online

copyright 2015 Donald M. Cameron, Bereskin & Parr LLP

Contents

 

Summary

Held: A patent claiming a gene and plant cells is infringed by the use of plants that contain them.

5-4 majority:

Remedy: Monsanto asked for an accounting of profits; however, since Schmeiser’s use of the plants didn’t include spraying of Round-Up on the crop, there were no profits attributed to the invention. Monsanto did not get legal fees.

 

Facts


at para 18:

Purposive construction of patent claims requires that they be interpreted in light of the whole of the disclosure, including the specifications … . In this case, the disclosure includes the following:

Abstract of the Disclosure

Plant cells transformed using such genes and plants regenerated therefrom have been shown to exhibit a substantial degree of glyphosate resistance.

Background of the Invention

The object of this invention is to provide a method of genetically transforming plant cells which causes the cells and plants regenerated therefrom to become resistant to glyphosate and the herbicidal salts thereof.

Detailed Description of the Invention

Suitable plants for the practice of the present invention include, but are not limited to, soybean, cotton, alfalfa, canola, flax, tomato, sugar beet, sunflower, potato, tobacco, corn, wheat, rice and lettuce.

 

at para 26:

We are not inclined to the view that Schmeiser “made” the cell within the meaning of s. 42 of the Patent Act. Neither Schmeiser nor his corporation created or constructed the gene, the expression vector, a plant transformation vector, or plant cells into which the chimeric gene has been inserted.

 

at para 60:

Mr. Schmeiser is a conventional, non-organic farmer. For years, he had a practice of saving and developing his own seed.  The seed which is the subject of Monsanto’s complaint can be traced to a 370-acre field, called field number 1, on which Mr. Schmeiser grew canola in 1996.  In 1996 five other canola growers in Mr. Schmeiser’s area planted Roundup Ready Canola.

 

at para 67:

[The trial judge] concluded, at para. 120:

I find that in 1998 Mr. Schmeiser planted canola seed saved from his 1997 crop in his field number 2 which he knew or ought to have known was Roundup tolerant, and that seed was the primary source for seeding and for the defendants’ crops in all nine fields of canola in 1998.

 

 

The Decision

 

at paras 22-23:

This case is different from Harvard Mouse, where the patent refused was for a mammal.  The Patent Commissioner, moreover, had allowed other claims, which were not at issue before the Court in that case, notably a plasmid and a somatic cell culture.  The claims at issue in this case, for a gene and a cell, are somewhat analogous, suggesting that to find a gene and a cell to be patentable is in fact consistent with both the majority and the minority holdings in Harvard Mouse.

Further, all members of the Court in Harvard Mouse noted in obiter that a fertilized, genetically altered oncomouse egg would be patentable subject matter, regardless of its ultimate anticipated development into a mouse (at para. 3, per Binnie J. for the minority; at para. 162, per Bastarache J. for the majority).

 

at paras 34-37:

The purpose of s. 42 is to define the exclusive rights granted to the patent holder. These rights are the rights to full enjoyment of the monopoly granted by the patent.  Therefore, what is prohibited is “any act that interferes with the full enjoyment of the monopoly granted to the patentee”: H. G. Fox, The Canadian Law and Practice Relating to Letters Patent for Inventions (4th ed. 1969), at p. 349; see also Lishman v. Erom Roche Inc. (1996), 68 C.P.R. (3d) 72 (F.C.T.D.), at p. 77. 

The guiding principle is that patent law ought to provide the inventor with “protection for that which he has actually in good faith invented”: Free World Trust, supra, at para. 43.  Applied to “use”, the question becomes: did the defendant’s activity deprive the inventor in whole or in part, directly or indirectly, of full enjoyment of the monopoly conferred by law?

…

As a practical matter, inventors are normally deprived of the fruits of their invention and the full enjoyment of their monopoly when another person, without licence or permission, uses the invention to further a business interest.  Where the defendant’s impugned activities furthered its own commercial interests, we should therefore be particularly alert to the possibility that the defendant has committed an infringing use.

 

at paras 47-51:

Moreover, as Lord Dunedin emphasized in British United Shoe Machinery Co. v. Simon Collier Ld. (1910), 27 R.P.C. 567 (H.L.), possession as a stand-by has “insurance value”, as for example in the case of a fire extinguisher.  The extinguisher is “used” to provide the means for extinguishment should the need arise.  This is true, too, of a spare steam engine which is “intended in certain circumstances to be used for exactly the purpose for which the whole machine is being actually used” (p. 572). Exploitation of the stand-by utility of an invention uses it to advantage.

…

The general rule is that the defendant’s intention is irrelevant to a finding of infringement.  The issue is “what the defendant does, not . . . what he intends”: Stead v. Anderson (1847), 4 C.B. 806, 136 E.R. 724  (C.P.), at p. 736; see also Hoechst Celanese Corp. v. BP Chemicals Ltd. (1998), 25 F.S.R. 586 (Pat. Ct.), at p. 598; Illinois Tool Works Inc. v. Cobra Anchors Co. (2002), 221 F.T.R. 161, 2002 FCT 829, at paras. 14-17; Computalog Ltd. v. Comtech Logging Ltd. (1992), 44 C.P.R. (3d) 77 (F.C.A.), at p. 88.  And the governing principle is whether the defendant, by his actions, activities or conduct, appropriated the patented invention, thus depriving the inventor, in whole or part, directly or indirectly, of the full enjoyment of the monopoly the patent grants.

…

Thus, possession was found to constitute “use” in Adair v. Young (1879), 12 Ch. D. 13 (C.A.), where a ship’s master was sued for infringement in relation to the presence of patented pumps on his ship.  The ship’s owners had fitted the ship with the pumps but were not named in the suit. The master had no power to remove the pumps and had never used them to pump water in British waters. However, the court held that the master intended to use the pumps if the need arose.  The court thus granted an injunction against use of the pumps to pump water.

 

at para 58:

These propositions may be seen to emerge from the foregoing discussion of “use” under the Patent Act:

1. “Use” or “exploiter”, in their ordinary dictionary meaning, denote utilization with a view to production or advantage.

2. The basic principle in determining whether the defendant has “used” a patented invention is whether the inventor has been deprived, in whole or in part, directly or indirectly, of the full enjoyment of the monopoly conferred by the patent.

3. If there is a commercial benefit to be derived from the invention, it belongs to the patent holder.

4. It is no bar to a finding of infringement that the patented object or process is a part of or composes a broader unpatented structure or process, provided the patented invention is significant or important to the defendant’s activities that involve the unpatented structure.

5. Possession of a patented object or an object incorporating a patented feature may constitute “use” of the object’s stand-by or insurance utility and thus constitute infringement.

6. Possession, at least in commercial circumstances, raises a rebuttable presumption of “use”.

7. While intention is generally irrelevant to determining whether there has been “use” and hence infringement, the absence of intention to employ or gain any advantage from the invention may be relevant to rebutting the presumption of use raised by possession.

 

at paras 76-80:

First, it is suggested that because Monsanto’s claims are for genes and cells rather than for plants, it follows that infringement by use will only occur where a defendant uses the genes or cells in their isolated, laboratory form.  This argument appears not to have been advanced in any detail at trial or on appeal, but is the position taken by our colleague, Arbour J.

            …

This position flies in the face of century-old patent law, which holds that where a defendant’s commercial or business activity involves a thing of which a patented part is a significant or important component, infringement is established.  It is no defence to say that the thing actually used was not patented, but only one of its components.

…

Provided the patented invention is a significant aspect of the defendant’s activity, the defendant will be held to have “used” the invention and violated the patent. If Mr. Schmeiser’s activities with Roundup Ready Canola plants amounted to use interfering with Monsanto’s full enjoyment of their monopoly on the gene and cell, those activities infringed the patent. Infringement does not require use of the gene or cell in isolation.

 

at para 81-86:

Second, Mr. Schmeiser argued at trial that he should not be held to have “used” Monsanto’s invention because he never took commercial advantage of the special utility that invention offered —  resistance to Roundup herbicide.  He testified that he never used Roundup herbicide as an aid to cultivation.  (That he used it in 1996 in his initial gathering of the Roundup Ready seed is clear.)

…

Their argument fails to account for the stand-by or insurance utility of the properties of the patented genes and cells. Whether or not a farmer sprays with Roundup herbicide, cultivating canola containing the patented genes and cells provides stand-by utility.  The farmer benefits from that advantage from the outset: if there is reason to spray in the future, the farmer may proceed to do so.

…

Further, the appellants did not provide sufficient evidence to rebut the presumption of use. It may well be that defendant farmers could rebut the presumption by showing that they never intended to cultivate plants containing the patented genes and cells.  They might perhaps prove that the continued presence of the patented gene on their land was accidental and unwelcome, for example, by showing that they acted quickly to arrange for its removal, and that its concentration was consistent with that to be expected from unsolicited “blow-by” canola.  Knowledge of infringement is never a necessary component of infringement. However, a defendant’s conduct on becoming aware of the presence of the patented invention may assist in rebutting the presumption of use arising from possession. 

 

 

Endnotes

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