TWN Info Service on WTO and Trade Issues (Aug09/11)
12 August 2009
Third World Network

Below is a story on the "Enola Bean" patent that after about 10 years of multiple legal challenges was overturned by the US Court of Appeals for the Federal Circuit.

Soon after Larry Proctor won the patent in 1999, he charged that Mexican farmers were infringing his rights by selling yellow beans in the US and shipments were stopped at the border. Proctor also sued seed companies and farmers selling or growing the Mexican yellow beans in the US.

For developing countries, the Enola bean dispute and other similar patent challenges involving genetic resources, brings forth several key lessons in particular (i) to urgently revive the long-overdue review of Article 27.3(b) of the WTO-TRIPS Agreement which allows granting of patent protection for life-forms including microorganisms (These patents are held mostly by entities of developed countries); (ii) to urgently require a mandatory disclosure requirement in patent applications; (iii) to resist anti-counterfeiting initiatives that burden governments to take on IP enforcement obligations that go beyond the minimum requirements of the TRIPS Agreement and to limit the scope of ‘counterfeiting’ and border measures to trademark and copyright violations.

Sangeeta Shashikant
Third World Network
Geneva
email: sangeeta@thirdworldnetwork.net 

The ‘Enola Bean’ dispute: patent failure & lessons for developing countries
Sangeeta Shashikant and Asmeret Asghedom

For the last decade the patent on the yellow ‘Enola’ bean held by Larry Proctor, owner of a US based seed company has been wreaking havoc on farmers, bean importers and exporters in Mexico and the United States. Recently, the US Court of Appeals for the Federal Circuit delivered a decision that should put an end to the devastation.

Soon after Proctor won the patent in 1999, he charged that Mexican farmers were infringing his rights by selling yellow beans in the US and shipments were stopped at the border. Proctor also sued seed companies and farmers selling or growing the Mexican yellow beans in the US.

On July 10, 2009, the court ruled Proctor’s patent invalid for failing to meet the patent criterion of non-obviousness. The decision however comes after a decade long battle that involves previous rejections by the US Patent & Trademark Office (US PTO) and by the Board of Patent Appeals. The US Court of Appeals merely reaffirmed what experts, NGOs and farmers have asserted for a decade i.e that the Enola Bean patent was erroneous, blatantly invalid since it has been grown and eaten in Mexico for centuries.

Throughout the dispute Proctor maintained monopoly, which allowed him to exert his power over farmers and bean importers and exporters through countless lawsuits, threats, and customs inspections. And despite obvious predatory abuses resulting in significant losses for farmers there will be no compensation.

The Enola bean dispute is but one of the many disputes that have emerged since the TRIPS Agreement,  that overtly displays the underlying problems with the patent system. It is an indictment of the failure of the workings of the current patent system as it is practiced in the developed countries. [Developing countries are increasingly being pressured through initiatives in WIPO, trade agreements etc.) to adopt patent standards and practices of the developed countries.]

Kathy Jo Wetter from the ETC Group (Action Group on Erosion, Technology and Concentration) charged that the ‘patent system is broken on both sides of the Atlantic’, following her assertion ‘We’ve seen protracted patent battles before. It as just last year that the European Patent office struck down Monsanto’s species-wide patent on all genetically modified soybeans ­ but it took an appeal and 13 years’.

The ‘Enola Bean’ dispute is also a warning to developing countries of what the future holds.

Against a backdrop of an advanced ‘IP maximalist’ agenda, with widespread patenting of seeds, plant and animals varieties and species taking place, corporate monopoly over genetic resources and an aggressive push for IP enforcement measures, ‘enola bean’ type cases are likely to become the norm.

[Presently there is an aggressive push by multinational companies under the pretext of ‘anti-counterfeiting initiatives’ for IP enforcement measures that includes border measures (i.e. authorizing customs officials to seize or detain products ex-officio or on complaint by the IP holder) even in cases where patents are concerned. Such measures apply increasingly not only to imports but also to exports and goods in transit). This results in erection of barriers to trade in agricultural products to the detriment of farmers and producers in developing countries]

The Enola bean story began in Sonora, Mexico in 1994, when the President of POD-NERS L.L.C, Larry Proctor purchased a bag of commercial seeds. Proctor took the bag to his home in Colorado, planted the seeds and allowed them to self-pollinate. He selected the yellow seeds for several generations until he got what he describes as a ‘uniform and stable population’ of yellow seeds. On November 15, 1996, 2 years after purchasing the seeds Proctor applied for a US patent.

Proctor was granted US patent no. 5,894,079 on the ‘Enola’ bean variety on April 13, 1999. The scope of the exclusive monopoly covered all Phaseolus vulgaris (dry bean) having a seed color of a particular shade of yellow. Proctor then proceeded to obtain double protection on his ‘Enola’ bean variety by applying for a US Plant Variety Protection Certificate.

In the application, Proctor claimed that the ‘Enola’ variety is unique because it is a distinctive yellow color and it was not previously grown in the US. However, in the application Proctor admitted, ‘The yellow bean, “Enola” variety is most likely a landrace from the azufrado-type varieties.’ Despite that fact, Proctor was granted a US Plant Variety Protection Certificate on May 28, 1999 on the basis that the ‘Enola’ dry bean variety was a distinct color and was unlike any other bean produced in the US.

Armed with double protection, Proctor’s company POD-NERS demanded that exporters pay royalties of 6 cents per pound of yellow beans entering US from Mexico.

Late 1999 Proctor sued 2 companies Tutuli Produce in US and Productos Verde Valle located in Mexico that bought beans from Mexican farmers and sold them in the US. The companies were shocked by the allegations.

The ETC Group reports Rebecca Gilliland, President of Tutuli Produce as stating ‘In the beginning, I thought it was a joke. How could he [Proctor] invent something that Mexicans have been growing for centuries?’.

Proctor also used his patent to disrupt bean trade between Mexico and the US and attempted to block exports that he believed contained his patented variety.

US customs officials inspected Mexican beans transported between the Mexican-US border and detained samples from each shipment. The lost bean samples coupled with the delays in shipment and fears from importers that the shipments would not come in time or at all, presented additional costs to companies.

Gilliland said that her company lost customers because of the lawsuit which also adversely impacted Mexican farmers whose livelihoods depend on selling beans to seed exporters.

According to Miguel Tachna Felix of the Agricultural Association of Rio Fuerte, Mexico when POD-NERS got the patent a letter was sent to all importers of Mexican beans in the US warning that the bean was their property and that if they planned to sell it they would have to pay royalties. This resulted in an immediate drop in export sales, over 90% and created fear among bean importers.

Along with farmers, community members in some areas of Mexico were also threatened by Proctor’s monopoly since beans are one of Mexico’s basic staple foods and the principle source of vegetable protein. According to the ETC Group, 98% of surveyed Mexicans in the Northwest region eat the yellow ‘Azufrado’ bean.

The Mexican government immediately became outraged by the appropriation of the yellow bean variety and with the attempts to block exports. In January 2000 the government announced that it would challenge the patent. ‘We will do everything necessary, anything it takes, because the defense of our beans is a matter of national interest,’ said Jose Antonio Mendoza Zazueta, under-secretary of Mexican rural development, according to ETC group reports. 

In the midst of the outrage from Mexican officials, farmers and exporters, Proctor in a shocking move went on to file a lawsuit against 16 US small bean seed companies and farmers in Colorado on November 20, 2001 on the basis they were violating the patent by illegally growing and selling his yellow ‘Enola’ bean.

The ‘Enola Bean’ patent has been condemned by experts worldwide as substantial evidence existed to show that Proctor was not the inventor of the yellow bean variety and that the bean originated from Mexico.

Mexico’s National Research Institute for Agriculture, Forestry and Livestock (INIFAP) had evidence that the yellow bean was genetically identical to Mexico’s ‘Azufrado’ bean.

Professor James Kelly a bean breeder at Michigan State University and President of the Bean Improvement Cooperative is reported as calling the ‘Enola’ bean patent as ‘inappropriate, unjust and not based on the scientific evidence or facts’, since ‘The yellow beans in Mexico are widely grown and known under the names of Mayocoba, Azufrado or Sulfur, Peruano, Canaria and Canario, names that are all suggestive of the yellow color’.

In fact, the database at the International Center for Tropical Agriculture (CIAT) in Cali, Columbia contains Mexican bean varieties identified by those names and categorized as ‘in-trust’ material. [‘In- trust’ germplasm is germplasm maintained in the public domain, with IPR claims not allowed under the terms of a 1994 agreement between the Consultative Group on International Agricultural Research and the UN Food and Agriculture Organization].

According to the ETC Group, CIAT’s gene bank holds more than 27,000 samples of Phaseolus  (dry bean) seeds, among other crop species. Additionally, CIAT maintains some 260 bean samples with yellow seeds, and 6 accessions are ‘substantially identical’ to claims made in US patent 5,864,079.

‘All he [Proctor] did was multiply something that already existed,’ Kelly told the ETC Group. ‘It’s nothing unique in any sense of the word. To patent a color is absolute heresy.’ Kelly asserted, ‘Nothing unique was invented, and this is a routine procedure used by bean breeders to maintain purity of genetic stocks and varieties.’

ETC group also reports Kelly as having provided seed companies with evidence proving the patent’s illegitimacy. In a letter written by Kelly in December of 1999 and addressed to Mr. Humberto Valdivia, Manager of Productos Verde Valle, Kelly dismissed the validity of the patent on the basis that yellow beans, similar to Enola, were grown in the US as far back as the 1930s.

Proctor’s patent on the ‘Enola’ bean variety has been disputed by multiple legal challenges since 2000. However pending the matter being resolved Proctor was able to enjoy monopoly of the market and bully farmers and other entities into paying royalties, disrupt cross-border trade, all of which resulted in massive economic losses for farmers.

In December 20, 2000 CIAT filed a formal request for re-examination of the US patent. The request disputed all the patent claims as being invalid and claimed that the misappropriation of the bean variety violates Mexico’s sovereign rights over its genetic resources, as recognized by the Convention on Biological Diversity.

However, re-examination was delayed when Proctor’s lawyers amended the original patent by filing 43 new claims. The process was further complicated when USPTO merged the re-examination proceedings with the re-issue proceedings. This delayed a final decision.

In late 2003 the USPTO’s re-examination resulted in ‘Non-Final’ rejection of the patent. Despite overwhelming evidence of the patent’s invalidity Proctor was able to continue his patent monopoly over the yellow bean variety.

A ‘final rejection’ for all of the patent’s 64 claims was released by the USPTO on April 14, 2005. However, Proctor was allowed 6 months to prepare and file a request to extend the re-examination period. On October 14, 2005 Proctor filed his request to extend the re-examination period and was awarded a 3-month reprieve.

On December 21, 2005, USPTO issued another ‘final rejection’ in response to Proctor’s amendment of the patent claims. But once again, the patent office allowed Proctor to file another extension or take the case to a higher board of appeals.

Proctor appealed, but the Board of Patent Appeals ruled the patent invalid in April 2008.

Proctor attempted to overturn this ruling in the United States Court of Appeals for the Federal Circuit. But at last, the courts issued the fifth and final rejection and revoked Proctor’s patent on the ‘Enola’ bean variety on July 10, 2009.

According to a news release from the ETC Group, the court’s 7 page decision argues that anyone intending to reproduce or improve Mexican yellow beans would have done exactly what Larry Proctor did: plant the beans, harvest the resulting plants for their seeds, planting the latter seeds, and repeat the process two more times. Thus the invention was ‘obvious’ and not deserving of a patent.

For developing countries, the Enola bean dispute and other similar patent challenges involving genetic resources, brings forth several key lessons in particular (i) to urgently revive the long-overdue review of Article 27.3(b) of the WTO-TRIPS Agreement which allows granting of patent protection for life-forms including microorganisms (These patents are held mostly by entities of developed countries); (ii) to urgently require a mandatory disclosure requirement in patent applications; (iii) to resist anti-counterfeiting initiatives that burden governments to take on IP enforcement obligations that go beyond the minimum requirements of the TRIPS Agreement and to limit the scope of ‘counterfeiting’ and border measures to trademark and copyright violations.