the rights and responsibilities of biotech patent owners

Citation: 40 U.B.C. L. Rev. 343 2007

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LAW REFORM COMMENTS

THE RIGHTS AND RESPONSIBILITIES OF BIOTECHPATENT OWNERS

JEREMY DE BEERt

I. INTRODUCTION

One thing about biotechnological innovations that sets them apartfrom traditional objects is that they can, and do, copy themselves.Transgenic organisms-plants and animals that have had theirgenes molecularly engineered with recombinant DNAtechnology-are impulsively self-propagating. This fact hascreated some legal challenges.

Property law, specifically intellectual property (IP) law, hashad to face questions such as: What rights does a patentee haveconcerning the second, third and subsequent generations ofprogeny of transgenic organisms containing a patentedbiotechnological invention? Among the questions faced in tortlaw is the inverse: What are the responsibilities of a patenteewhen such things cause harm to persons, property or economicinterests? Both questions are reflective of the social, legal, ethical

t Assistant Professor, University of Ottawa, Faculty of Law. Thanks to theLaw Foundation of Ontario and the University of Ottawa, Faculty of Law(Common Law Section) for funding this research, to Matthew Rimmer, KarthikAshwin Thiagarajan, Katharine Garforth, Keith Ferguson, Jennifer Chandler,Heather McLeod-Kilmurry, Martin Phillipson, participants at variousconferences/seminars where this work was presented, and several anonymouspeers for their comments, and to Mark Magro, Saleh Al Sharieh, Patrick Cleyn,Katrina Marciniak, Alison Minard, Livia Aumand, Tim Jolly, Mary Mitsios, JeffMurray, Mary Auxi Guiao, Natasha Palaccio, David Lam, Annette Uetrecht, andAdrienne Moir for their research assistance on this and closely related projects.

HeinOnline -- 40 U.B.C. L. Rev. 343 2007

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and commercial controversies that permeate the topic ofbiotechnology.

These questions were considered, separately, in two recentCanadian cases about agricultural biotechnology. In Monsanto v.Schmeiser, Monsanto argued successfully that ownership of apatent for a molecularly engineered plant gene and transgenicplant seed entitled it to full control over stray plants and progenycontaining the gene, even though a plant itself is not patentablesubject matter under Canadian law. In Hoffman v. Monsanto,2 agroup of organic farmers argued unsuccessfully that patentownership also entails responsibility for damages to organic cropsand crop markets caused by straying genetically modifiedorganisms. In short, Canadian courts have held that a patententitles its owner to all of the rights but none of theresponsibilities of ownership.

These two cases demonstrate why biotechnology issues mustbe studied as part of a bigger picture. Looking at them through thelens of patent law or tort law in isolation is inadequate, yet littlework has been done on the link between IP rights and tortliabilities in the field of biotechnology.3 Only a handful ofscholars have juxtaposed these issues.4 No judge has yet

I Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34, [2004] 1 S.C.R. 902,239 D.L.R. (4th) 271 [Schmeiser (SCC) cited to S.C.R.] aff'g (2002), 2002 FCA309, [2003] 2 F.C. 165, 218 D.L.R. (4th) 31 (F.C.A.) [Schmeiser (FCA)]; 2001FCT 256, 202 F.T.R. 78, 12 C.P.R. (4th) 204 (F.C.T.D.) [Schmeiser (FCT) citedto F.T.R.].

2 Hoffman v. Monsanto Canada Inc., 2005 SKQB 225, [2005] 7 W.W.R.665 [Hoffman (QB)], aff'd 2007 SKCA 47 [Hoffman (CA)].

3 According to Philippe Cullet, "Monsanto v Schmeiser: A LandmarkDecision concerning Farmer Liability and Transgenic Contamination" (2005) 17J. Envtl. L. 83 at 102. See also Timothy A. Caulfield and E. Richard Gold,"Genetic Testing, Ethical Concerns, and the Role of Patent Law" (2000) 57:5Clinical Genetics 370 at 370.

4 Excellent work has been done by e.g. Jane Matthews Glenn, "GeneticallyModified Crops in Canada: Rights and Wrongs" (2003) 12 J. Envtl. L. & Prac.281 [Glenn, "GMOs in Canada"]; and Martin Phillipson, "Giving Away theFarm? The Rights and Obligations of Biotechnology Multinationals: CanadianDevelopments" (2005) 16:2 The King's College Law Journal 362 [Phillipson,"Giving Away the Farm?"].

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conducted a thorough and comprehensive legal analysis.5

Questions about rights and responsibilities are too often examinedindependently of each other. Moreover, extra-legal considerations,including philosophical, ethical, economic, environmental andother social concerns, are too often ignored.6

Seen in a broader light the lack of legal liability that resultsfrom the Hoffman decision is part of a trend away fromaccountability for technological innovation. At the same time,there is a trend toward according technological innovators morenumerous and powerful property rights. Patentees are quick toinvoke the power of property rhetoric to expand and protect theirrights, but when it comes to the liabilities ordinarily associatedwith ownership, the tune suddenly changes.

Agricultural biotechnology companies are not unregulated.Biotechnological innovations exist in a complex policy matrix oflegal regulation, social norms and economic realities. Legalregulations cut across intellectual property, contract, tort,environmental law, competition law, trade law, food labeling andother forms of specialized rules. But in terms of ownership dutiesspecifically, patent owners have, at least according to two recentcases, broad rights and few or no property-related responsibilities.

Comparing and contrasting the Schmeiser and Hoffmandecisions reveals the existence of a legal disequilibrium. There arevarious ways to restore equilibrium. One option is to narrow thescope of patent rights. Another is to recognize responsibilities. Forreasons discussed below, the latter is the more realistic way toremedy the current imbalance.

I suggest the reason that Canadian courts, thus far, have beenunable to appropriately balance rights and responsibilities stemsfrom conceptual ambiguity about the relationship between

5 This is perhaps understandable as a result of the nature of the litigationand adjudication processes, which often turn on particular facts and pleadings,and are unsuited to addressing broader issues.

6 But see e.g. Gold, Castle & Cloutier, "Ag-biotech in the Courts: Patents,Privileges and Presumptions" (Paper presented to the International Consortiumon Agricultural Biotechnology Research 8"h ICABR International Conference onAgricultural Biotechnology, International Trade and Domestic Protection, (July2004) [unpublished, available online: ICABR 2004 Conference Papers<http://www.economia.uniroma2.it/conferenze/icabr2004/papers/default.asp>].

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principles of property, intellectual property and tort law. It mustbe understood specifically which facts are linked to which causesof action. The existence of a patent, for example, is immaterial toa finding of negligence, especially a products liability claim.Negligence in this context is based upon the principle that thedesigner, manufacturer or distributor of transgenic crops hascreated an unreasonable risk. Other torts, however, imposeliability based on the principle that a patent owner has control,through a combination of patent and contract law, over the objectcausing harm. These ownership obligations are most appropriatelyenforced through causes of action such as nuisance, trespass, therule in Rylands v. Fletcher7 or breach of statute.

This novel insight explains why courts and commentators areoften overwhelmed and confused when multiple causes of actionare applied to multiple different parties. An appreciation of theprinciples at stake will lay the foundation for a more preciseanalysis leading to more satisfactory results. The practical resultwill be to encourage biotech companies to own up to theirownership obligations.

II. DISEQUILIBRIUM

A. MONSANTO V. SCHMEISER8

Monsanto markets agricultural systems-the farmer provides landand labour, and the company provides seeds, chemicals, or othertools for crop growing. 9 Monsanto's system involves Roundupglyphosate herbicide, which, in short, kills plants. Monsanto hasalso engineered a gene that causes a plant and its progeny to beglyphosate-resistant. Farmers can therefore spray Roundup on agrowing crop, killing weeds but leaving the transgenic plants

7 (1868), L.R. 3 H.L. 330, aff'g (1866) L.R. I Ex. 265.8 The discussion in this section draws on my earlier work in Jeremy F.

deBeer, "Reconciling Property Rights in Plants" (2005) 8 J. World IntellectualProperty 5 [deBeer, "Reconciling Property Rights"].

9 Jack Ralph Kloppenburg, First the Seed: The Political Economy of PlantBiotechnology, 1492-2000 (Cambridge: Cambridge University Press, 1988) at282-83, quoting Dr. Klaus Saegebarth of Du Pont and Howard Schneiderman ofMonsanto.

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unharmed. Monsanto has a Canadian patent for glyphosate-resistant plants, including Roundup Ready canola.' 0

Monsanto accused Percy Schmeiser, a Saskatchewan farmer,of making, using and selling its patented invention withoutlicence. Monsanto's private investigators discovered glyphosate-resistant canola in Schmeiser's 1998 crop, which he had plantedwith seed saved from the previous year, as was his customarypractice. Schmeiser never purchased seeds from Monsanto; thatwould have required contracting not to save new seeds generatedfrom his crop. " He argued that he was not responsible for, nor didhe want, Roundup Ready canola on his land. He proposed variousexplanations for its presence, including adventitious spread bywind or insects.

Justice McKay of the Federal Court Trial Division did notaccept Schmeiser's explanations. However, he declined to decidehow and why Monsanto's gene did appear in Schmeiser's crop.He held that this was "really not significant" because Schmeiserknew or should have known the seeds he saved and replantedwere glyphosate-resistant. Planting and growing transgenicseeds under these circumstances made Schmeiser liable forinfringement of Monsanto's patent.'3 A unanimous panel of theFederal Court of Appeal, and five of nine Justices of the SupremeCourt of Canada upheld this ruling.

Schmeiser made several arguments to the Supreme Court.'4

First, he argued that Monsanto's patent was invalid, as it concernsa higher life form, which is not patentable in Canada. '" Second,because he did not spray his crop with Roundup herbicide, he

10 "Glyphosate Resistant Plants", Can. Patent No. 1, 313,830, (6 August

1986). Generally, the claims pertain to a molecularly engineered gene, amolecularly engineered gene expressed in a glyphosate-resistant plant cell and,more particularly, in a glyphosate-resistant rape seed (canola) cell.

I Licensed growers must sign a technology use agreement. See Schmeiser(SCC), supra note 1 at para. 11.

12 Schmeiser (FCT), supra note I at paras. 119-20.13 Ibid. at para. 127.14 Schmeiser (SCC), supra note 1 (Factum of the Appellant at paras. 44-78

and 132-46 [FOA]).15 Harvard College v. Canada (Commissioner of Patents), 2002 SCC 76,

[2002] 4 S.C.R. 45, 219 D.L.R. (4th) 577 [Harvard College].

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claimed he did not "use" or exploit the patent's only novel utility.Schmeiser also argued that the correct damages, if any, representonly his enrichment from exploiting the patent (that is, nothing),not his entire profit.

The majority of the Supreme Court held that the patent wasvalid, as it did not concern a higher life form, but merely a geneand cell contained within a higher life form. 6 The majority alsofound that possession of a plant containing a patented geneconstitutes "use", and therefore infringement. 7 Schmeiser'sfailure to spray his crop with herbicide was immaterial because ofthe patent's "stand-by utility"."8 The majority did, however,accept Schmeiser's argument regarding damages.' 9 The dissent'ssolution to the whole dilemma would have been to uphold thepatent's validity insofar as it protects only the gene as used in alaboratory setting, which would in effect give Monsanto amonopoly vis-d-vis industry competitors but leave farmers free touse the plants and seeds that they own.2°

In describing Monsanto's patent rights, the Trial Division,Court of Appeal and Supreme Court all embraced the loadedlanguage of classic property. The Supreme Court called MonsantoCanada and Monsanto the "licensee and owner, respectively, ofCanadian patent No. 1,313,830."2i According to the Court, "ThePatent Act confers on the patent owner 'the exclusive right,privilege and liberty of making, constructing and using theinvention and selling it to others to be used'."22 To determineinfringement, one must ask: "did the defendant's activity deprivethe inventor in whole or in part, directly or indirectly, of full

16 Schmeiser (SCC), supra note 1 at paras. 17-24. See further, NormanSiebrasse, "Comment on Monsanto Canada Inc. v. Schmeiser" (2004) 83:3 Can.Bar Rev. 967.

17 Schmeiser (SCC), supra note 1 at para. 58.18 Ibid. at paras. 47, 50, 83-85.

19 Ibid. at paras. 98-105, citing N. Siebrasse, "A Remedial Benefit-BasedApproach to the Innocent User Problem in the Patenting of Higher Life Forms"(2004) 20 C.I.P. Rev. 79.

20 Schmeiser (SCC), supra note 1 at paras. 140-163.21 Ibid. at para. 8.22 Ibid. at para. 25.

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enjoyment of the monopoly conferred by law? '23 The Court wenton to say that "the main purpose of patent protection is to preventothers from depriving the inventor, even in part and evenindirectly, of the monopoly that the law intends to be theirs: onlythe inventor is entitled, by virtue of the patent and as a matter oflaw, to the full enjoyment of the monopoly conferred. 24 Such abroad interpretation of the rights conferred upon patent ownerswas surprising, given the Supreme Court's balanced reading ofother intellectual property rights in recent cases. 25

When the time came to consider Mr. Schmeiser's argumentthat he also had an ownership interest at stake-what I have calleda "classic" property right in the seed itself 26-the Courts paidlittle attention. Schmeiser had argued that Monsanto forfeited itsIP rights by virtue of the unconfined release of its product into theenvironment; that innocent bystanders should not suffer from theadventitious spread of Monsanto's gene; and that the solution tothis dilemma is through the doctrines of waiver or implied licence.The upshot was that Schmeiser's classic property rights in theplants and seeds should not be subordinated to Monsanto's IPrights. Schmeiser tried to show how the law traditionallyreconciles competing property claims by citing the basic law of

23 Ibid. at para. 35 [emphasis in original].24 Ibid. at para. 43 [emphasis in orginal]. See also paras. 46, 49, 54, 71, 72,

79, 80 and 85.25 In the context of copyrights, see e.g. Th~berge v. Galarie d'Art du Petit

Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336, 210 D.L.R. (4th) 385; CCHCanadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R.339, 236 D.L.R. (4th) 395; and Canadian Assn of Internet Service Providers v.Society of Composers, Authors and Music Publishers of Canada, 2004 SCC 45,[2004] 2 S.C.R. 427, 240 D.L.R. (4th) 193. Regarding trade-marks, see e.g.Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65, [2005] 3 S.C.R. 302, 259D.L.R. (4th) 577; Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, [2006] 1S.C.R. 772, 268 D.L.R. (4th) 424; Veuve Clicquot Ponsardin v. BoutiquesCliquot Lt~e, 2006 SCC 23, [2005] 1 S.C.R. 824, 270 D.L.R. (4th) 1.

26 De Beer, "Reconciling Property Rights", supra note 8.

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admixture,27 and referencing well established case law dealingwith ownership of the progeny of stray bulls.28

The Courts were unwilling to accept these analogies. Both theTrial Division and the Court of Appeal disposed of Schmeiser'sclassic property claim in a few lines.29 The Supreme Court missedthe point entirely, bluntly and ineloquently 3° remarking: "the issueis not property rights, but patent protection. Ownership is nodefence to a breach of the Patent Act."'" In short, the Courtbroadly interpreted Monsanto's rights as a patent owner so as totrump Schmeiser's rights as a classic property owner. Monsantohas been granted a sort of super-property right that overrides allothers.

In a postscript to the Schmeiser case, it was recently reportedthat Schmeiser has again discovered Roundup Ready canolagrowing in his fields.3 2 Monsanto had promised the SupremeCourt that problems involving volunteer plants are "quickly andsatisfactorily resolved by Monsanto and the farmer", 33 and thatthose "who notified Monsanto of the undesired presence ofRoundup Ready canola on their property were dealt with fairlyand responsibly by Monsanto. The occasional and limitedRoundup Ready canola plants, growing on their property wereremoved by Monsanto on terms satisfactory to the farmers. 34 Butthe company's lawyers told Schmeiser that Monsanto would onlyhand-pick offending plants if he signed a contract that foreverreleases Monsanto from any lawsuits associated with their

27 Colwill v. Reeves (1811), 2 Camp 575, 577, cited in Schmeiser (SCC)

FOA, supra note 14 at para. 119.28 Schmeiser (SCC) FOA, ibid. at para. 116, citing Popowich v. Letweniuk,

[1972] 1 W.W.R. 641 (Sask. Dist. Ct.); Weeks v. Weeks (1977), 81 D.L.R. (3d)371 (P.E.I. S.C.); Neeb v. Hoffman, [1989] O.J. No 302 QL (Ont Dist.Ct.).

29 Schmeiser (FCT), supra note I at paras. 91-92; Schmeiser (FCA), supranote I at para. 51.

30 Bruce Ziff, "Travels With My Plant" (2005) 2:2 U.O.L.T.J. 493 [Ziff,

"Travels with My Plant"].31 Schmeiser (SCC), supra note 1 at para. 96 (emphasis added).32 Sean Pratt, "Roundup Ready Canola back in Schmeiser's field", The

Western Producer (26 October 2005).33 Schmeiser (SCC), supra note 1 (Factum of the Respondents at para. 5).34 Ibid. at para. 103.

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products and forbids him from disclosing the terms of thatsettlement.

Monsanto's spokesperson defended the company's offer bysaying that it was under no legal obligation to assist in the firstplace. Monsanto's attitude raises an interesting question fordiscussion: what exactly are its legal obligations concerning itspatented genes? In Hoffman v. Monsanto, a group ofSaskatchewan organic farmers tried to find out.

B. HOFFMAN V. MONSANTO

On 10 January 2002, Larry Hoffman and Dale Beaudoin made anapplication to the Saskatchewan Court of Queen's Bench tocertify a class action lawsuit on behalf of organic farmers againstMonsanto Canada and Bayer CropScience (BCS). Because canolais an open-pollinating crop, Monsanto's "Roundup Ready" andBCS's "Liberty Link" brands of canola drifted predictably ontoorganic farmers' fields and into their organic crops. As a result,these farmers allegedly incurred substantial losses. Damagesincluded the loss of ability to use canola in crop rotations withoutrisking contamination, the loss of ability to participate in acertified organic canola market and past and future cleanup costssuch as identifying and removing transgenic plants and seeds fromfields and equipment.35

To be certified as a class, the plaintiffs had to show that therewas a cause of action, an identifiable class, common issues bestresolved through a class action, and a suitable representativeplaintiff.36 In a 177-page judgment on this preliminary applicationfor certification, Madam Justice Smith rejected the plaintiffs'application on nearly every point.

The most controversial aspects of the decision relate to theCourt's attitude toward possible causes of action. The Court held,in effect, that it was plain and obvious there was no reasonableprospect for success establishing a cause of action based on theplaintiffs' pleadings.37

35 Hoffman (QB), supra note 2 at para. 39.36 Class Actions Act, S.S 2001, c. C- 12.01.

37 Hoffman (QB), supra note 2 at paras. 38-195.

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The core negligence claim was rejected because the plaintiffsconceded that this was a novel case requiring the creation of anew duty of care.38 According to the Court, the plaintiffs'pleadings failed to establish that the alleged harms wereforeseeable.39 The Court decided that there was no proximaterelationship between organic farmers and these agrichemicalcorporations. 40 Finally, in any event, the Court felt that there werepolicy reasons to negate a duty to take reasonable care in thesecircumstances. Other allegations of negligence, based on a dutyto warn and/or reliance on undertakings by Monsanto and BCS,were similarly rebuffed.42

The Court decided that this was not an appropriate case toimpose strict liability under the rule of Rylands v. Fletcher.43 Theplaintiffs submitted that the defendants engaged in a non-naturaluse of the land during field trials of transgenic crops and in thatprocess allowed the escape of something likely to do mischief anddamage.' The Court, however, concluded that there was noreasonable way it could be argued that testing and commercialrelease of transgenic canola could be an escape of a substancewithin the meaning of the rule.45

The Court acknowledged that liability for nuisance is notlimited to occupiers of adjoining land, but questioned settledauthorities on this point.4 6 Justice Smith speculated as to thereasons for imposing such liability before considering Americanjurisprudence, and consequently introduced into Canadian lawthe idea that independent malfeasance or direct causation isrequired in cases where the defendant does not occupy nearby

38 Ibid. at paras. 52, 57, 59, 81.39 Ibid. at paras. 61-66.40 Ibid. at paras. 67-70.41 Ibid. at paras. 71-80.42 Ibid. at paras. 57-51 and 82-88.43 Ibid. at paras. 89-97.

44 Ibid. at paras. 89.45 Ibid. at paras. 95-97.46 Ibid. at paras. 115-116.47 Ibid. at paras. 117-121, considering In re StarLink Corn Products

Liability Litigation, Marvin Kramer v. Aventis CropScience USA Holding Inc.,212 F. Supp.2d 828 (N.D. Ill. 2002).

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land. 8 She concluded that the implications of holding Monsantoand BCS liable in nuisance would be too sweeping, and thusrejected the plaintiffs' arguments as plainly and obviouslyflawed. 9

The Court rejected the trespass argument because, according tothe Court, any interference was indirect.5 ° It was in this contextthat the Court rejected an analogy to case law imposing strictliability for damages caused by stray bulls. According to theCourt, the plaintiffs could point to no public policy reason whythe defendants should not have commercially released transgeniccanola. 5

According to the Judge, no cause of action could be foundedon the Environmental Management and Protection Act5" before itwas amended, because it could not be shown that the defendantswere owners or in control of a pollutant before its discharge. Butthe EMPA as amended in 2002 did create a possible albeit limitedcause of action. Similarly, the plaintiffs' claim under theEnvironmental Assessment Act53 , which alleged that thedefendants' development of molecularly engineered genes andgenetically modified seeds required ministerial approval, was notclearly unreasonable.

In sum, the Court rejected nearly all of the plaintiffs'arguments regarding potential causes of action. The plaintiffswere also unable to convince the Court that they satisfied any ofthe other prerequisites to certification.

On the issue of whether there was an identifiable class, theCourt concluded, among other things, that there were manyreasons why an organic farmer might choose not to grow canola,which vary according to the circumstances of the farmer, andthere were no objective criteria with which to distinguish thosefarmers who would have grown canola but for the risk of

48 Hoffman, supra note 2 at para. 122.49 Ibid. at para. 124.50 Ibid. at para. 133.51 Ibid. at para. 132.52 S.S. 1983-84, c. E-10.1 [EMPA].53 S.S. 1979-80, c. E-10.1 [EAA].

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transgenic contamination. 4 There was no evidence that the sameproblems were widespread among members of the proposedclass,55 and most of the members of the proposed class did notshare in the causes of action asserted in the statement of claim.56

The Court found that many of the common issues among theproposed class related to the causes of action that had just beenrejected. 57 Any other proposed common issues, the Court held,could not be identified without individual inquiry. 8 Furthermore,with a degree of circularity, the Court reasoned that it wasdifficult or impossible to establish commonality of issues sincethere was no identifiable class.59

When considering whether a class action was the preferableprocedure for the action, the Court concluded that the proceedingwould inevitably break down into individual proceedings,requiring full rights of discovery and a trial to resolve manyunique factual issues.6°

The Court also found flaws with the representative plaintiffsbecause they had assigned significant rights and duties to theSaskatchewan Organic Directorate. In effect, these plaintiffs werenot directing the litigation but had relinquished control to acommittee that was not answerable to the court, in a way that wasinconsistent with their fiduciary duties to the proposed class.61

There is no doubt that on balance the plaintiffs were handed anoverwhelming defeat. Martin Phillipson has characterized thedenial of certification as "an enormous blow" that "may wellbring an end to the lawsuit". 62 After, the Saskatchewan Court ofAppeal upheld nearly every aspect of the Queen's Bench decisionand dismissed the farmer's appeal. Only leave to the SupremeCourt of Canada could breathe life back into this case.

54 Hoffman (QB), supra note 2 at paras. 218, 234.55 Ibid. at para. 242.56 Ibid. at para. 243.57 Ibid. at para. 310.58 Ibid. at paras. 244 and 324.59 Ibid. at para. 310.60 Ibid. at para. 326.61 Ibid. at paras. 329 -339.62 Phillipson, "Giving Away the Farm", supra note 4 at 368.

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III. RESTORING EQUILIBRIUM

When the results of the decisions in Schmeiser and Hoffman arejuxtaposed, a serious problem becomes apparent. Entities thatpatent biotechnological innovations have all of the rightsassociated with property ownership, yet have been relieved of theresponsibilities traditionally imposed upon property owners.

The most obvious problem with this legal disequilibrium is theinjustice done to farmers who are harmed, economically orotherwise, by transgenic organisms. Another problem is thehostility toward the biotechnology industry, and the agriculturalbiotechnology industry in particular, stemming from the currentlegal imbalance. Farmers, consumers, non-govermentalorganizations and the public understandably resent thecontradictory positions taken by agrochemical firms likeMonsanto. Perceived and actual inequities generate disdain forthese firms and undermine consumer confidence in their products.This, in turn, further hinders social acceptance of transgenicorganisms, undermining biotechnology's potential benefits.Moreover, hostile attitudes toward biotechnological innovationshelp to create an unstable legal, economic and politicalenvironment. The associated uncertainty creates unnecessary risksfor biotechnology firms.

Therefore, the disequilibrium identified above is a problem,not just for organic farmers, but also for agrochemical companies.Indeed, this imbalance affects the whole biotechnology industryas well as society at large.

Equilibrium could be restored in several ways. One option is tonarrow or eliminate patent rights in respect of biotechnologicalinnovations. Another possibility is to preserve patent rights butrecognize corresponding responsibilities.

A. LIMITING RIGHTS

It is possible to balance the rights and responsibilities of patentowners by adjusting the rights side of the equation. This wouldrequire revisiting the scope of patentable subject matter and/or thescope of patent rights.

The evolution of Canadian law on the patentability of higherlife forms has been complicated, controversial, and at times

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contradictory. In 1982, Canada's Patent Appeal Board held thatliving organisms are patentable.63 For the next 20 years, theSupreme Court managed to duck the issue,' but in HarvardCollege65 dealt with it head on. A five-to-four majority of theSupreme Court held that a higher life form is not a patentableinvention.66 In Schmeiser, all judges purported to agree thathigher life forms are not patentable in Canada, but a five-to-fourmajority rendered this proposition meaningless. The decisionallowed for patents on the genes and cells that constitute higherlife forms, and held that the patent protects the whole of anyorganism containing patented genes and cells.

So, the current law in Canada is that life is not patentable perse, but its building blocks are. It is notable, however, that three ofnine judges on the Court have been replaced since Schmeiser, oneof whom sided with the majority and two of whom dissented. Toadd yet another variable, the newest appointee, Justice Rothstein,presided over the Harvard College case at the Federal Court ofAppeal and ruled in favour of the patentee. 67 Those who mighthave thought that it does not matter which judges would decidethe next biotechnology patent case before the Supreme Courtreceived a lesson in legal realism following the Harvard Collegeand Schmeiser decisions.

Nevertheless, in the future, significant legal changes in thisarea would probably come from Parliament and not the courts.Both the majority and minority decisions in Schmeiser andHarvard College acknowledged that Parliament could changeCanadian patent law if it wishes.68 Canada's international IPtreaty obligations would permit Parliament to do so.

63 Re Application ofAbitibi Co. (1982), 62 C.P.R. (2d) 81 (P.A.B.).64 In Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents), [ 1989] 1

S.C.R. 1623, 60 D.L.R. (4) 223, 25 C.P.R. (3d) 257, the Supreme Court ofCanada could have tackled the question, but instead decided only that the patentat issue in that case was invalid because of insufficient disclosure.65 Harvard College, supra note 15.

66 "Invention" is defined in section 2 of the Patent Act, R.S.C. 1985, c. P-4.67 [2000] 4 F.C. 528.68 Schmeiser (SCC), supra note I at paras. 93-94, 159; Harvard College,

supra note 14 at paras. 114, 206.

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Under the Agreement on Trade-Related Aspects of IntellectualProperty Rights69 members of the World Trade Organization mustmake patents available for any invention, whether products orprocesses, in all fields of technology provided the inventions arenew, result from an inventive step, and are capable of industrialapplication.7° There are, however, exceptions to this general rule.Member states can exclude inventions from patentable subjectmatter if doing so is necessary to protect ordre public or morality,human, animal or plant life, health or the environment. 7'Moreover, member states can also exclude from patentabilityplants and animals other than micro-organisms, as well asnaturally occurring breeding methods, but there must be aneffective sui generis system in place.72 Canada has such a systemin the Plant Breeders' Rights Act. 71

Rather than excluding higher life forms from patentabilityaltogether, it is also possible for Canada to enact limitedexceptions to the exclusive rights conferred by a patent.74 Inmaking a limited exception, member countries must notunreasonably interfere with the normal exploitation of the patentand must not prejudice the legitimate interests of a patent owner.

Although the TRIPs Agreement would permit Canada tonarrow the scope of patent law, multilateral treaties also affect thisdebate. Specifically, legislative reform could constitute an

69 Set out as Annex 1 C of the Marrakesh Agreement establishing the World

Trade Organization, 15 April 1994, 33 I.L.M. 1125 [TRIPs Agreement].70 Ibid., art. 27.71 Ibid., art. 27:2.72 Ibid., art. 24:3(b). Member countries are required to allow the patent-

ability of non-biological and microbiological processes such as biotechnologicalgene manipulation, gene transfer and so on, but other patent exceptions arepermitted for diagnostic, therapeutic and surgical methods for the treatment ofhumans or animals. Ibid., art. 27:3(a). Also, general exceptions to the IP regimeunder the TRIPs Agreement would permit measures "consistent with the TRIPsAgreement" necessary to protect public health and nutrition, to promote thepublic interest in sectors of vital importance to socio-economic and technologicaldevelopment or to prevent practices that unreasonably restrain trade or adverselyaffect the international transfer of technology.

73 S.C. 1990, c. 20.74 TRIPs Agreement, supra note 69, art. 30.

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expropriation of foreign investors' property rights under the NorthAmerican Free Trade Agreement."5 Bruce Ziff explains:

Under article 11 10 of NAFTA, foreign investors from the signatorystates are protected against both direct and regulatory takings.Legislation that terminates extant patents such as the one for Round-Up Ready Canola triggers a right of compensation in favour ofMonsanto, a foreign investor. So, it is true that Parliament is free - asin libre - to reverse the Supreme Court of Canada ruling tomorrow.Such legislation would be unimpeachable. Nonetheless, it would notbe free-as in gratis-since the measure would cost Canadiansbillions if enacted.76

Therefore, the government must be cautious before taking awayforeign biotechnology firms' IP rights. This makes a lengthydiscussion of whether or not it would be an appropriate policy tocurtail patent rights somewhat moot. Even if such a move werepolitically saleable, it would not be economically feasible in theshort-term. A longer-term solution might be to deny or limitpatent rights prospectively, although that would not address thepressing issue of imbalanced rights and responsibilities.

In sum, judicial narrowing of the scope of patent law ispossible but unpredictable. Parliament is the appropriate venue inwhich to debate the rights of patentees, but policy questions aboutlegislative changes to patent law are dwarfed by the practicalitiesof narrowing the scope of protection. Canadian law concerningthe rights of patentees is unlikely to undergo significant changeanytime soon.

B. RECOGNIZING RESPONSIBILITIES

If, for reasons just discussed, rights granted under Canadian patentlaw are unlikely to change, equilibrium could be obtained byrecognizing corresponding ownership obligations. After all,property rights normally entail responsibilities as well.

75 North American Free Trade Agreement Between the Government ofCanada, the Government of Mexico and the Government of the United States, 17December 1992, Can. T.S. 1994 No. 2, 32 I.L.M. 289 (entered into force 1January 1994) [NAFTA].

76 Bruce Ziff, "Travels with My Plant", supra note 30.

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As a preliminary matter, it could be suggested that patents andother IP rights are not really "property" rights, and that patenteesare not really "owners". Although Monsanto pitched this as a self-serving argument in the Hoffman case, 77 sometimes IP critics takethis view in order to undermine the rhetorical use of powerfulproperty metaphors.78 The proposition that IP is not reallyproperty might help to rationalize the combined result ofSchmeiser and Hoffman, and therefore deserves carefulconsideration.

There are important theoretical and practical differencesbetween IP and classic property. The fundamental distinctionsrelate to the inherent characteristics of ideational resources: theyare not scarce, rivalrous or possessable. 79 It is somewhatawkward, therefore, to transpose classic property theory ontopublic goods such as ideas, although there have been numerousattempts to do so. 8

' No doubt the distinct characteristics ofideational resources go the heart of why we recognise IP rights,and how we define the scope of IP protection. However, lookingclosely, they actually have little to do with whether IP is a type ofproperty. That is a subtle but crucial distinction, which helps tohighlight the importance of property-related responsibilities in IPlaw.

In Schmeiser the Supreme Court interpreted the scope ofpatent protection like a typical classic property right. Patents,according to the Court, provide their owners with full monopoly

77 Hoffman (QB), supra note 2 at para. 132.78 R. Polk Wagner, "Information Wants to be Free: Intellectual Property

and the Mythologies of Control" (2003) 103 Colum. L. Rev. 995.79 See further de Beer, "Reconciling Property Rights", supra note 8 at 14,

and the sources cited therein.80 Some of the many notable works on point include e.g. J. Hughes, "The

Philosophy of Intellectual Property" (1988) 77 Georgetown L. J. 287; E.C.Hettinger, "Justifying Intellectual Property" (1989) 18 Philosophy & PublicAffairs 31; T.G. Palmer, "Are Patents and Copyrights Morally Justified? ThePhilosophy of Property Rights and Ideal Objects" (1990) 13 Harv. J.L. & Pub.Pol'y 817; W.J. Gordon, "On Owning Information: Intellectual Property and theRestitutionary Impulse" (1992) 78 Va. L. Rev. 149; W.J. Gordon, "A PropertyRight in Self-Expression: Equality and Individualism in the Natural Law ofIntellectual Property" (1993) 102 Yale L.J. 1533; Peter Drahos, A Philosophy ofIntellectual Property (Aldershot: Dartmouth Publishing Company, 1996).

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powers, which cannot be interfered with in whole or in part,directly or indirectly. 81 Patent owners have, among other things,broad rights to exclude others from the resource in question, touse the resource and to transfer such rights by way of sale or gift.The rights may be time limited and the resource intangible, butmany other classic property rights, such as a life estate or a chosein action, share these features.

Patent rights are at least as strong as many other classic privateproperty rights. The essential characteristics of patents bring themwithin almost every conception of the concept 82 of property toclearly resemble a "full-blooded ownership ' 83 interest. 84 The mostpopular definitions of property either consider exclusivity as itssine qua non85 or view it as comprising a variety of sufficient butnot necessary features. 86 Some authors have defined a propertyright as a state-endorsed dictum from a private citizen to the worldat large, demanding that everyone keep off a given resourceunless permission is granted.87 On any widely accepted definition,a patent is a property right.

81 Schmeiser (SCC), supra note 1 at paras. 35, 43, 46, 49, 54, 71, 72, 79, 80,

85.82 Jeremy Waldron, The Right to Private Property (Oxford: Oxford

University Press, 1998) at 47-53. [Waldron, "The Right to Private Property"].83 James Harris, Property and Justice (Oxford: Oxford University Press,

1996) at 29-30.84 See generally David Lametti, "The Concept and Conceptions of

Intellectual Property as seen through the Lens of Property", in G. Comand& & G.Ponzanelli, eds., Scienza e Diritto nel Prisma del Diritto Comparato (Torino:Giappichelli, 2004).

85 T.W. Merrill, "Property and the Right to Exclude" (1998) 77 Neb. L.Rev. 730.

86 Merrill, ibid., calls this school of thought "multiple variable essen-tialism." Merrill's taxonomy also includes "nominalism", which sees the termproperty as merely a malleable shell.

87 Professor Farnese reaches the conclusion that patent owners haveproperty rights by citing Felix Cohen's famous definition of property: "To theworld: Keep off (X) unless you have my permission, which I may grant orwithhold. Signed: Private Citizen. Endorsed: The state." See Felix S. Cohen,"Dialogue on Private Property", (1954) 9 Rutgers L. Rev. 357 at 374, cited inPatricia L. Famese, "Patently Unreasonable: Reconsidering the Responsibility ofPatentees in Today's Inventive Climate" (2004) 6 Tulane J. Tech. & IntellectualProperty 1 at 4.

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Patentees cannot, therefore, escape their responsibilities byarguing that to label them as property owners is "amisunderstanding of the nature of their interest under patentlaw."88 That position is untenable as it is inconsistent withassertions patentees typically make when it comes to enforcingtheir IP rights. More importantly, from a philosophical, legal andethical perspective, the argument that patentees are not owners ispatently wrong.

Ownership of property entails both rights and duties. Oftenwhen we talk theoretically about property-related duties we meanto say that non-owners owe a duty not to interfere with propertyowners' correlative rights, as explained in Hohfeld's seminalwork on jural relations.89 But also, property owners themselveshave duties associated with the things that they own. 90

The most dominant property metaphor, which viewsownership as a "bundle of rights", 9' acknowledges the existenceof various rights and responsibilities. Unfortunately, restatingHonor 's "standard incidents" of "the full liberal concept of

88 Hoffman (QB), supra note 2 at para. 132.89 See e.g. Wesley N. Hohfeld, Fundamental Legal Conceptions, as Applied

in Judicial Reasoning, and Other Legal Essays, W.W. Cook, ed., (New Haven:Yale University Press, 1919).

90 Bruce Ziff, Principles of Property Law (Scarborough, ON: Carswell,2000) at 3; Eric T. Freyfogle, "The Construction of Ownership" (1996) U. Ill. L.Rev. 173-187; Eric T. Freyfogle, "Context and Accommodation in ModernProperty Law", (1988-89) 41 Stan. L. Rev. 1529 at 1540-1544, 1553; DavidLametti, "Property and (Perhaps) Justice. A Review Article of James W. Harris,Property and Justice" (1998) 43 McGill L.J. 663; David Lametti, "Coming toTerms with Copyright" in M. Geist., ed., In the Public Interest: The Future ofCanadian Copyright Law (Toronto: Irwin Law, 2005) at 487, citing J.W. Singer,Entitlement: The Paradox of Property (New Haven, Yale University Press,2000); Gregory Alexander, Commodity & Propriety: Competing Visions ofProperty in American Legal Thought 1776-1970 (Chicago: University ofChicago Press, 1997); W.N.R. Lucy & C. Mitchell, "Replacing Private Property:The Case for Stewardship" (1996) 55 Cambridge L.J. 566; K. Gray, "EquitableProperty" (1994) 47 Curr. Legal Probs. 157; E.G. McCaffery, "Must We Havethe Right to Waste?" in S.R. Munzer, ed., New Essays in the Legal and PoliticalTheory of Property (New York: Cambridge University Press, 2001) at 76. But cfe.g. A. Ryan, Property (Minneapolis, University of Minneapolis Press, 1987) at54-5.

91 James E. Penner, "The Bundle of Rights Picture of Property" (1996) 43U.C.L.A. L. Rev. 711 at 712-24 [Penner, "The Bundle of Rights Picture"].

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ownership"" as a bundle of rights tends to downplay theimportance of property duties.93 Remember that one of Honorf'sstandard incidents is "the duty to prevent harm". 94 JeremyWaldron states this as "a duty to refrain from using X in a waythat harms others".95 James Penner characterizes it as aprohibition on the harmful use of property. 96 The essential point,as Ziff explains, is that "the bitter accompanies the sweet", and "itis common to find a large number of ownership-based duties,scattered though they may be throughout the law."97

Although the precise nature of property-related rights andduties varies depending on the object of social wealth in question,basic responsibilities apply to both tangible and ideationalresources. 98 In other words, ownership obligations attach to bothclassic and intellectual property rights.

Before shifting from a theoretical discussion of propertyresponsibilities to an analysis of specific legal doctrines underwhich liability is imposed, it is worthwhile to consider this debatefrom an even wider perspective. Recognizing that IP ownership,like property ownership generally, entails both rights andresponsibilities is part of a broader reconstitution of the modemliberal rights-based paradigm. 99 Subjecting rights to internalresponsibilities as well as external duties protects a multiplicity ofinterests that are not otherwise safeguarded.

The traditional liberal framework would acknowledge theinterests of those who are harmed by the exercise of another's

92 A.M. Honor6, "Ownership" in A.G. Guest, ed., Oxford Essays in

Jurisprudence (Oxford: O.U.P., 1961) 107 [emphasis added].93 See further J.L. Schroeder, "Chix Nix Bundle-O-Stix: A Feminist

Critique of the Disaggregation of Property", (1994) 93 Mich. L. Rev. 239.94 A.M. Honor&, "Ownership" in A.G. Guest, supra note 92 at 113

(emphasis added).95 Waldron, The Right to Private Property, supra note 82 at 49.96 Penner, "The Bundle of Rights Picture", supra note 91 at 761.97 Ziff, Principles of Property Law, supra note 90 at 3.98 David Lametti, "The Concept of Property: Relations Through Objects of

Social Wealth" (2003) 53 U.T.L.J. 325; David Lametti, "Coming to Terms withCopyright", supra note 90 at 486-89.

99 See e.g. Leon Trackman and Sean Gatien, Rights and Responsibilities(Toronto: U of T Press, 1999).

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rights only to the extent they have countervailing rights of theirown. Conflict is resolved by reordering competing rights in ahierarchical fashion. In the context of transgenic crops, this wouldmean that the rights of a patent owner might be checked by otherrights, such as a farmer's classic private property rights.'100 Rightswith responsibilities, however, take account of important socialvalues and other interests not necessarily crystallized ascountervailing rights.' 1 Responsibilities are simply an inherentaspect of rights, including IP rights such as patents. This viewsuggests that patent owners may have responsibilities in additionto and beyond those discussed here. For example, there may be aresponsibility to preserve biodiversity or there may be otherobligations of environment stewardship.

Responsibilities also flow inevitably from Canada's attitudetoward biotechnological risks and our implementation of theprecautionary principle in this context. In general, NorthAmerican law and policy reflects the belief that transgenicorganisms are "substantially equivalent" to non-transgenicorganisms unless proven otherwise.'0 2 Although there is not yetreliable scientific evidence of increased health risks associatedwith transgenic organisms, other sorts of concerns have begun tobe realized. The Hoffman case, for instance, illustrates some of thesocial, cultural and economic risks of biotechnology.

Canada has chosen to accept these risks, in order to encourageeconomic development and scientific progress throughbiotechnological innovation. The primary beneficiaries ofCanadian biotechnology policy, biotechnology firms, cannot nowsay in good faith that they bear no responsibility when acceptedrisks eventually materialize. As Patricia Farnese puts it: "there isno justification for allowing a patentee to profit, withoutconsequence, from the state-granted monopoly over hertechnology and then leave society with the long-termconsequences of the technology's introduction." 103

100 See e.g. de Beer, "Reconciling Property Rights", supra note 8.

101 Ibid.

102 This contrasts with, for example, the European approach, which

presumes the opposite.103 Famese, supra note 87 at 3.

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Such a problem is not unique to the agricultural biotechnologyindustry. Helen Nissenbaum has identified a similar lack ofaccountability in the software engineering business. She notes thatsoftware patent owners tend to claim broad IP rights yet typicallytry to disclaim any liabilities normally associated withownership. 04

Jaqueline Lipton also notes that we tend to adopt propertylanguage when talking about rights in information, but overlookproperty duties when talking about "information property"generally. °5 She says that information property law has"borrowed too little" from traditional notions of property, byfailing to notice that: "traditional Property rights entail significantconcurrent obligations or responsibilities imposed on theproprietary owner as an incident of their Property ownership." 106

She agrees that we need to start thinking about an overarchingframework for information property that incorporates concurrentlegal duties. 107

Lipton talks about the duty to mitigate harms such as inhibitedaccess to information resources. Although the duties addressed inthis article are more like the concerns discussed by Nissenbaum, acommon thread can be identified. There is a trend towardestablishing stronger property rights in ideational resources and asimultaneous trend away from recognizing basic ownershipobligations. IP owners have been allowed to shirk their property-related duties.

The systemic imbalance is, in part, a natural consequence ofthe technology product development cycle. The promise of IPrights tends to precede research, development andcommercialization, and liabilities tend to accrue followingdistribution and use. This has led to a lag between the granting ofproprietary rights in respect of technological innovations and theimposition of responsibility for harms caused by such products.

104 Helen Nissenbaum, "Accountability in a Computerized Society" (1996)

Science and Engineering Ethics 2, 25-42.105 Jaqueline Lipton, "Information Property: Rights and Responsibilities",

(2004) 56 Fla. L. Rev. 135.106 Ibid. at 148.107 Ibid. at 165.

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However, there are good economic reasons to attempt tocrystallize property rights and liabilities simultaneously, or at leastas early as possible. Clear IP rights are designed to facilitateinvestment in the development and marketing of new and usefulproducts. The predictability of potential liabilities would seem tobe an equally important consideration for would-be investors.This underscores the need to ensure insofar as possible thattraditional rules are applied, and if necessary adapted, totechnology industries if and when harms are realized.

One commentator has dismissed the fear that imposingliabilities upon patentees might diminish incentives to invent, andtherefore contradict the basic purpose of patent law. Thatargument was premised on the beliefs that some people wouldstill invent out of pure pleasure, and that "as long as there is apotential for economic gain, invention will occur notwithstandingeconomic risks."1 8 This underestimates the economic complexityof the patent regime, and overlooks the tremendous financialimportance of patent protection to biotechnology industryinvestors.

I agree, however, that ownership obligations will notundermine investment incentives and are not inconsistent with thepurpose of patents. The reason is that if patentees' rights andresponsibilities are appropriately correlated at an early stage, fairand predictable obligations can actually enhance, rather thanundermine, the economic incentives to invest in technologicalinnovation. It is not just the existence but also the clarity of theserights and responsibilities that creates investment incentives. Ifeconomic risks are predictable, it will be possible to plan for andinsure against these risks.

Continuing with a consequentialist perspective, there are moraland ethical reasons to recognize patentees' property-relatedduties. Professors Gold and Caulfield have argued that imposingliabilities on patentees is a useful deterrent against harmful andunethical behaviour in the biomedical context.'O9 This insightwould seem to be equally applicable to agricultural biotechnology

108 Famese, supra note 87 at 30.109 Caulfield & Gold, supra note 3 at 373.

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companies. There is a need for moral accountability in thisindustry. ''0

All of the macro concerns discussed above are intimatelyrelated to the more concrete legal question of patent owners'responsibilities toward farmers in cases involving transgenic cropdrift. In light of the foregoing contextual discussion, it is notsurprising that most of the commentators who have studied thisissue have concluded that companies like Monsanto bear someresponsibility in such circumstances.

One can discern in the literature several different approachesthat have been used to reach that conclusion. Some authors havelooked at a number of different torts and different parties, andappraised various potential liabilities. "' Some authors havefocused their analysis on a specific cause of action, such asnuisance," 2 breach of statute," 3 or the rule in Rylands v.Fletcher."4 Others have looked exclusively at negligenceincluding strict products liability, or have concluded that an actionin negligence is most likely to succeed." 5

The general legal consensus that patent owners may be liablefor harms caused by patented biotechnological innovations iscorrect. However, in my view, patent owners ought to be held

110 See e.g. Gold, Castle & Cloutier, "Ag-biotech in the Courts: Patents,

Privileges and Presumptions", supra note 6.111 See e.g. Jane Matthews Glenn, "Footloose: Civil Responsibility for

GMO Gene Wandering in Canada" (2004) 43 Washburn L.J. 547.112 See e.g. Christopher P. Rodgers, "Liability for the Release of GMOs

into the Environment: Exploring the Boundaries of Nuisance" (2003) 62Cambridge L.J. 371; and Thomas Redick and Christina Bernstein, "NuisanceLaw and the Prevention of 'Genetic Pollution': Declining a Dinner Date withDamocles" (2000) 30 Environ. L. Rep. 10328.

113 See e.g. Jodi McNaughton, "GMO Contamination: Are GMOsPollutants under The Environmental Management and Protection Act?" (2003)66 Sask. L. Rev. 183 (QL).

114 See e.g. J.W. Loone, "Rylands v. Fletcher Revisited: A Comparison ofEnglish, Australian and American Approaches to Common Law Liability forDangerous Agricultural Activities" (1996) 1 Drake J. Agric. L. 149.

115 See e.g. Farnese, supra note 87; Sharon Mascher, "Sowing the Seeds ofDiscontent? Australia's New Gene Technology Act" (2003) 12 J. Envtl. L. &Prac. 341 at 371; and Gold, Castle & Cloutier, "Ag-biotech in the Courts:Patents, Privileges and Presumptions", supra note 6.

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liable not necessarily on the basis of negligence, but ratherpursuant to other causes of action, such as nuisance, trespass,breach of statute or the rule in Rylands v. Fletcher. This is animportant distinction.

Liability for negligence is most likely to succeed as a claimunder the existing category of products liability, or perhaps otherexisting categories such as cases of reliance, or the duty to warn.In this light, the Hoffman case is just a simple twist on well-settledlegal principles. That the product in question is a biotechnologicalproduct is not significant. The key fact in establishing productsliability is that the defendant was the designer, manufacturer ordistributor of the product in question. The designer, manufactureror distributor's liability arises in part because that person was in aposition to avoid creating a risk of harm, either by producing aproduct that would not cause harm or by warning potentialvictims of the harms that might occur.

The existence of a patent is immaterial to a finding of liabilityfor negligence. It may be that a person who is liable for creatingan unreasonable risk happens to have obtained a patent, but it mayalso be that the designer, manufacturer or distributor is not thepatentee. Products liability for negligence is entirely unrelated towhether the designer, manufacturer or distributor has applied for,obtained or enforced a patent. In light of this, it makes perfectsense that no court has yet considered whether a patentee owes aduty of care to a consumer who is injured by the patentedinvention. 6

The existence of a patent is, however, material to findingliability on other grounds. The maxim sic utere tuo ut alienumnon laedas, meaning use your own property so as not to harmothers is often associated with the law of nuisance, although thelaw of trespass also imposes obligations upon property owners, asdoes the rule in Rylands v. Fletcher. Even more precisely, thesecauses of action are premised less on ownership per se than on thedegree of control that property owners, by definition, exerciseover the source of the harm." 7 For that reason, liability may

116 Famese, ibid. at 10-11.117 Ownership and/or possession inevitably involve some level of control.

Control, on the other hand, does not always amount to ownership.

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attach to the occupier or possessor of property, in addition to orinstead of the owner. Likewise, liability may be imposed upon apatentee in the right circumstances.

The reason a patentee might be held liable for damages causedby a patented invention is because, as explained above, a patentprovides its owner with exclusive control over making,constructing, using and selling the invention." 8 According to theSupreme Court of Canada, the patentee is entitled to fully enjoythis right, privilege and liberty, and cannot be deprived of themonopoly, in whole or in part, directly or indirectly. 19 Moreover,a patentee is entitled to protect and enforce these rights both underthe Patent Act and through the common law of contract. Putbriefly, a patentee may exercise an extraordinary degree of controlover their patented invention. If a patentee chooses to exercise itsrights of control after a product has been manufactured anddistributed to the public, it is appropriate to impose liability onthat basis.

It is crucial to be precise about how and why liability mightarise. The particular principle underpinning legal liability hassignificant implications in terms of the existence, scope andduration of legal responsibilities. For example, if the existence ofa patent were material to establishing liability for negligence, suchliability could conceivably cease to exist following the expirationof the patent 20 years from the date the patent application wasfiled. Similarly, failing to appreciate this distinction could resultin variable liability depending on whether the product's inventorhad rights under the Plant Breeder's Rights Act or other IPregimes. What if a defendant had chosen not to seek patentprotection but instead guarded its intangible assets as tradesecrets? Unless we are clear about the basis for imposingliabilities, the fact that an inventor has never sought or enforcedpatent rights could eliminate legal responsibility altogether.

The facts of the Hoffman case underscore these points.Monsanto is the owner of Canadian Patent No. 1,313,830, and hasrigorously asserted its rights via contract and patent law. In

118 Patent Act, supra note 66, s. 42.119 Schmeiser (SCC), supra note I at paras. 35, 43, 46, 49, 54, 71, 72, 79,

80, 85.

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Schmesier, the Supreme Court of Canada vindicated Monsanto'sproperty interest in the molecularly engineered gene andtransgenic seeds that caused damage to the Hoffman plaintiffs. Onthe other hand, Monsanto's co-defendant in the Hoffman case,BCS, is arguably in a somewhat different position. The BCSproduct in question, Liberty Link canola, is hybrid seed. Its rights,therefore, are likely more limited than Monsanto's. Moreover, itseems that BCS has not pursued its IP rights in the courts asaggressively as Monsanto has.

Consequently, depending on the principle underpinning thecauses of action invoked by the plaintiffs, the two co-defendantsin Hoffman might find themselves facing different legal liabilities.As product designers, manufacturers and distributors, bothdefendants may be equally liable. If, however, one is consideringtheir respective liabilities based upon the existence andenforcement of patent rights, it may be appropriate to treat thesedefendants somewhat differently.

It is true that there may be overlap between liability innegligence, nuisance, trespass, the rule in Rylands v. Fletcher andvarious statutory causes of action. Yet fundamentally, there aretwo related but separate legal principles regarding liability forharms done by transgenic crops. Liability may be premised uponthe basis of "control over property" and/or "creation of risk".

In general, property-related responsibilities are reflectedthrough causes of action other than negligence, such as breach ofstatute, nuisance, trespass, and/or the rule in Rylands v. Fletcher.Unlike negligence, these other torts do not require a finding offault in order to impose liability. Liability is based upon controlrather than fault.

Some might see aspects of the law of negligence as founded onthe principle of control over property, rather than or in addition tocreation of risk. The doctrine of occupier's liability is one possibleexample, although the rules governing occupiers of property havebeen largely subsumed by statute. 120 Employers or parents may beheld vicariously liable on the basis of control over theiremployees or children, but those examples involve control over

120 See Linden, Canadian Tort Law, 7th ed., (Markham, Ont: Butterworths,

2001) at 650-82.

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persons, not property. Product manufacturers do, of course,exercise control over the design and manufacture of a good.Again, however, this control is not over property but over aprocess. Simply put, control over property is not a typical basisfor a finding of liability in negligence. In cases where negligenceand property issues happen to be found together, liability canusually be attributed to principles other than ownership.

This insight represents a breakthrough in analyses of liabilityfor harms caused by transgenic crops. The temptation in the pasthas been to look at the applicability of particular torts to particularparties using fairly traditional doctrinal methodologies. Commonlaw rules or statutes have been explained and applied somewhatblindly, without asking how or why the rules are the way they are.

The shotgun approach, splattering causes of action around inthe hope that something will stick, has proved to be overwhelmingand confusing. As a proposition of fairness and equity, the ideathat patent owners have both rights and responsibilities should berelatively non-controversial. The broader contextual factorsdiscussed above also confirm this. Yet at the concrete stage oflegal analysis, in the Hoffman case for example, particular ruleswere applied with unsatisfactory results.

The judge was confused about which specific facts are relevantto which specific causes of action. For instance, when analyzingthe nuisance claim, the judge stated that: "The implications ofholding a manufacturer, or even inventor, liable in nuisance fordamage caused by the use of its product or invention by anotherwould be very sweeping indeed.""'' When later summarizing herconclusion about liability in nuisance, Justice Smith said: "Thereis simply no legal basis for claiming that mere ownership..., letalone mere patent protection, without more, creates liability fornuisance.... "22 She was seemingly unaware of the importance ofdistinguishing between the defendants' roles as inventors andpatentees, and manufacturers and distributors. Similarly, shedismissed the argument the defendants could be liable for trespassfor "merely marketing GM canola."' 23 In this respect, she failed to

121 Hoffman (QB), supra note 2 at para. 122 [emphasis added].122 Ibid. at para. 301.123 Ibid. at para. 131.

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appreciate the relevance of the control the defendants exercisethrough patents and contract.

One reason for the confusion may be that farmers lack accessto the legal resources necessary to tackle the tangled web oftransgenic crop liability issues. In fact, it was the same lawyerfrom Saskatoon who acted for Schmeiser in the first case and theorganic farmers in the second. He has likely staked much on thesecases, and his diligence and dedication is admirable. But it isunreasonable to expect that individual farmers, or even a group offarmers, are able to match the wealth of subject-specificexperience and expertise retained in the deep pockets of opposingparties in both cases.

Of course, the complex interrelationship between principles oftort and property is difficult to for anyone to distil adequately inthe space allotted in trial or appellate pleadings, when there are somany other issues that must be addressed. Hopefully, my analysishere will assist policymakers, practitioners and judges grapplingwith the nuances of these issues.

In my view, the solution to the problem of establishing theproper cause of action lies in formulating more precisely the basicprinciples and policies at issue, and situating these within thesocio-legal landscape. As a practical matter, this may mean thatplaintiffs should resist the tendency to plead everything and offercourts a litany of legal claims from which to choose. Or it maymean that only certain causes of action are appropriate forcertification on facts alleged in a particular class action. It doesnot mean that plaintiffs should not plead and judges should notconsider multiple or alternative causes of action.

Arguments and decisions should be made based upon firstprinciples. These principles can then be aligned with the conceptsunderpinning specific legal rules to demonstrate why liabilityshould be imposed. This is not a purely property-based, IP-basedor tort-based approach. The analysis requires a far more texturedand nuanced understanding of the relationship between these legalrubrics. There must be an appreciation of the subtleties amongstthe principles underlying the legal rules, and how these mightaffect the particular defendants in a particular case. When oneappreciates the subtle relationships between socio-legal context,

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basic principles and specific rules, it becomes much easier to seehow the existing law is capable of balancing IP rights andresponsibilities. The result should be a demonstrable difference inthe outcome of cases such as Hoffman.

IV. CONCLUSION

There is an imbalance between the rights and responsibilities ofbiotech patent owners. The legal disequilibrium is demonstratedthrough two recent Canadian cases: Schmeiser and Hoffman. InSchmeiser the Supreme Court of Canada expansively construedpatent rights in respect of transgenic crops. In Hoffman aSaskatchewan court narrowly construed liabilities for harmscaused by such products.

There are several ways to restore equilibrium. It is possible tonarrow the scope of patent rights. Judicial reconsideration ofCanadian patent law is a possibility, but is more likely thatpotential changes will come from Parliament. Although Canada'sobligations under the TRIPs Agreement would permit adjustmentsto the nature of patent rights in Canada, the need under NAFTA tocompensate foreign investors for interference with their interestsrenders this solution problematic.

Alternatively, obligations can be more clearly recognized.Patent rights are property rights, and property rights also entailresponsibilities. Recognizing rights with responsibilities is part ofa reconstitution of the liberal rights-based paradigm.Responsibilities are also an inescapable consequence of Canada'simplementation of the precautionary principle. Shirkingresponsibility is not unique to the agricultural sector or even thebiotechnology industry. There is a trend among IP ownersgenerally toward arguing for greater property rights yet fewerownership obligations. There are economic and ethical reasons torecalibrate rights and responsibilities, which can only beaccomplished through a clearer understanding of the principlesunderpinning liabilities.

Ownership obligations are most appropriately enforcedthrough causes of action such as nuisance, trespass, the rule inRylands v. Fletcher or breach of statute. The existence of a patentis immaterial to a finding of negligence, especially a products

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2007 RIGHTS AND RESPONSIBILITIES 373

liability claim. Negligence in this context is based upon theprinciple that the designer, manufacturer or distributor oftransgenic crops has created or failed to warn about anunreasonable risk. Other torts impose liability based on theprinciple that a patent owner has control over property. Thisunique insight explains why courts and commentators are oftenoverwhelmed and confused when multiple causes of action areapplied to multiple different parties. An appreciation of therelevant principles should help to restore the balance betweenrights and responsibilities.


the rights and responsibilities of biotech patent owners

Documents