By: Shashank Upadhye
Introduction
The intersection of patent law and regulatory frameworks in the United States presents unique challenges and opportunities for industries involving fertilizers, herbicides, pesticides, rodenticides, and other bulk chemicals. This article delves into the intricacies of U.S. patent statutes, regulatory codes, landmark cases, and precedents that specifically impact these sectors.
Regulatory Background to Agrochemicals
Agriculture and agrochemicals are complex businesses in modern times. And just like other massive industries, there are lots of laws and regulations to govern them. The early 1900’s saw several federal laws related to food inspections, pesticides, and insecticides. The mid-1900’s saw the enactment of the Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (7 U.S.C. § 136 et seq.) and the Food Drug Cosmetic Act. The 1970’s saw FIFRA regulation move from the USDA to the newly created EPA. FIFRA requires that all pesticides used in the U.S. be registered with the EPA, ensuring they do not pose unreasonable risks to human health or the environment. The Act emphasizes the protection of applicators, consumers, and the environment.
The Toxic Substances Control Act (TSCA) (15 U.S.C. § 2601 et seq.), enacted in 1976, provides the EPA with authority to require reporting, record-keeping, and testing requirements, and to impose restrictions relating to chemical substances and mixtures. While TSCA excludes pesticides regulated under FIFRA, it covers other bulk chemicals used in agrochemical formulations, ensuring they do not present unreasonable risks.
The Food Quality Protection Act (FQPA) of 1996 amended FIFRA and the Federal Food, Drug, and Cosmetic Act (FFDCA) to establish a more consistent, protective regulatory scheme for pesticides. It introduced a health-based standard for pesticides used in foods, considering aggregate exposures and cumulative effects.
Preemption of State Laws
The relationship between federal and state regulations can lead to preemption issues. Preemption refers to when federal law replaces (or displaces) State law. For example, suppose a farmer uses a fungicide on the crops, but they are poisoned and die instead. The farmer sues the fungicide maker under State law for damages caused by the allegedly poisonous fungicide. Preemption arises if the court decides that the farmer cannot sue under State law because the fungicide is federally regulated. In Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005), the Supreme Court held that FIFRA does not preempt state-law claims for defective design, defective manufacture, negligent testing, and breach of express warranty, allowing farmers to pursue state-level remedies despite federal pesticide registration. This case underscores the potential for state-level legal actions despite federal regulatory compliance.
Data Exclusivity of Pesticide Data
After a first pesticide applicant submits its FIFRA application and underlying data to the EPA, can the EPA then “share” that data to subsequent applicants? Data exclusivity exists for 10-years for pesticides registered after Sept. 1978. If data is “taken” by the EPA and shared with another applicant, is that a Fifth Amendment taking? The U.S. Supreme Court in Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) addressed this. Monsanto challenged the EPA’s use of its pesticide data for the benefit of competitors, arguing it constituted a taking under the Fifth Amendment. The Supreme Court held that the use of data submitted before 1978 did not constitute a taking, but data submitted after could be considered a taking if used without compensation, highlighting the balance between public interest and proprietary rights. This 10-year data exclusivity is separate from any patent protection afforded.
Patent Law Aspects of Agrochemicals
Fertilizers and other “-cides” have a long history in patent law. Indeed, the very first U.S. Patent ever issued was to Samuel Hopkins on 31 July 1790, for a process of making potash in fertilizer. A committee of Secretary of State Thomas Jefferson, the Attorney General Edmund Randolph, and the Secretary of War authorized the patent. New President George Washington signed it.
Patent portfolios should be strategically managed to maximize protection and market exclusivity. This includes filing broad and layered patent applications, considering international patent protections, and utilizing patent term extensions where applicable.
General Patentability
Agrochemicals are not treated any differently under patent law than any other chemical. Patents can be obtained on the agrochemical compound itself; formulations containing the agrochemical; methods of using the agrochemical to treat the condition (e.g., treat pests, improve growth); packaging; and combination products.
Product By Process Claims
Many chemical-based inventions are claimed in a “product by process” claim format. During the patent application process, the USPTO evaluates the claim to the final end-product claimed and the process steps don’t matter. This means so long as the claimed product is the same as (e.g., anticipated) or only an obvious variant of a prior art product, then the claimed product is not patentable. The MPEP view is also supported by case law. See, e.g., In re Thorpe, 777 F.2d 695, 697-98 (Fed. Cir. 1985)(“For this reason, even though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself.”). In any later patent infringement lawsuit, the challenger may argue the patent claim is invalid. Because invalidity is the inverse of patent prosecution, the standard for product by process claims equally applies. That is, for invalidity (based on prior art), the focus is still on the end-product, not the process steps. See, Amgen Inc. v. F. Hoffman-La Roche Ltd, 580 F.3d 1340, 1369-70 (Fed. Cir. 2009)(“In determining validity of a product-by-process claim, the focus is on the product and not on the process of making it.”). But for infringement, the Federal Circuit clarified by holding en banc that the process steps matter. See, Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282, 1293 (Fed. Cir. 2009)(en banc in relevant part)(“Thus, based on Supreme Court precedent and the treatment of product-by-process claims throughout the years by the PTO and other binding court decisions, this court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.””).
Other Patent Infringement and Invalidity Issues
Agrochemicals are subject to the same rules of patent law as any other technical field. For example, an inventor may disqualify his right to a patent by putting the agrochemical “on-sale” prior to the patent application filing date. The applicability of the on-sale test is governed by the two-part Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67–68 (1998) test, which part 1 is about a commercial sale, and part 2 is about ready for patenting. Agrochemical inventors may stumble on this on-sale bar when it is sending samples out to bulk manufacturers for potential sale or licensing. Principles of contract law are likely implicated in the analysis.
Agrochemical inventors may also create self-disqualifying prior art by publishing research, presenting at conferences, creating abstracts for posters, etc. This is highly relevant if the inventors are academic researchers that develop or study the agrochemical and publish the findings. Inventors may also create self-disqualifying prior art by “public use” of the invention. This makes it hard for inventors to test the agrochemical in the fields to verify that the chemical actually works for its intended purpose. It’s critically important to have the necessary secrecy agreements in place to ensure that the use in the fields is not actually a public use within the meaning of the patent law. Further, patentees may need to examine the law of experimental use to adjudge its application.
Experimental Uses of Agrochemicals
The patent law doctrine of experimental use may shield an inventor from invalidating public use. As early as 1877, the Supreme Court recognized that there are times when an invention must be tested in the public to determine if the invention even works. City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 133-135 (1877). But legal guardrails exist to ensure that such uses in public are still experimental in design. A use may be experimental if its purpose is: (1) to test claimed features of the invention or (2) to determine whether an invention will work for its intended purpose—itself a requirement of patentability. Barry v. Medtronic, Inc., 914 F.3d 1310, 1328 (Fed. Cir. 2019). Experimental use may be used to negate the “ready for patenting” or the “public use” prong of the public use test.
Another area of experimental use is in defense of infringement. Here the defendant claims that its infringement is really just experimentation, not bona fide infringement. Or that any infringement is de minimis. First, a defendant bears the burden of proving any use is experimental. Second, the experimental use exception applies only to uses that are for “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” Further, a use does not qualify for the experimental use defense when it is undertaken in the “guise of scientific inquiry” but has “definite, cognizable, and not insubstantial commercial purposes.” As such, a so-called experimental use is disqualified from the defense if it has the slightest commercial implication. Moreover, use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defense. Madey v. Duke University, 307 F.3d 1351, 1362 (Fed. Cir. 2002).
Manufacture of Agrochemicals Ex-USA and Importation Issues
Another issue that arises in agrochemicals is the manufacture of the chemical abroad but then the product is imported into the U.S. Different patents come into play here. If the imported product itself is patented in the U.S., then the straightforward patent infringement rule applies because the allegedly infringing product is imported into the U.S. and/or sold in the U.S.
Now what if the U.S. patent is a process patent, that is, a process of making a product and the process is carried out ex-USA? What rights does the U.S. patent holder have? If the U.S. patentee also has the equivalent process of making patent in the country of manufacture, it can sue in that country under that foreign patent. The U.S. patentee could also assert, under 35 U.S.C. §271(g), that the product that is imported is made by the U.S. patented produces and thus infringes under subsection (g). Defending against §271(g) claims requires understanding the precise steps of the patented method claim, and then also analyzing the product that is imported. A stricter reading of §271(g) may mean that the product that is imported into the U.S. must be exact product that is made by the patented process. Otherwise there is disparity between the product that is actually produced by the patented process versus what is actually imported into the United States.
In Syngenta Crop Protection v. Willowood LLC, the Federal Circuit held that liability for performing the patented steps abroad need not be a single entity that performs those patented steps. This means that multiple foreign entities may practice bits and pieces of the patented process and the importer may still be liable. This is because the issue in §271(g) infringement is based on the product that is imported, not on the process steps per se. Syngenta Crop Protection, LLC v. Willowood, LLC, 944 F.3d 1344, 1363 (Fed. Cir. 2019)(“We hold that in light of the plain language of the statute, the broader context of the statutory scheme as a whole, and the legislative history, § 271(g) does not require a single entity to perform all of the steps of a patented process for infringement liability to arise from the importation into the United States or offer to sell, sale, or use within the United States of a product made by a process patented in the United States.”).
Freedom To Operate – Clearing The Way of Patent Rights
Finally, clearing new agrochemical products and formulations from competitor’s intellectual property in anticipation of commercialization can be a daunting challenge. Potential sellers of agrochemicals can conduct freedom to operate (FTO) searches, analyzing competitor patents, and documenting non-infringement positions. It may be prudent to obtain such FTO opinions to ensure that the prospective selling does not infringe on another competitor’s patents. Further, such FTO opinion may insulate the seller from claims of willful infringement. Sellers may also seek to “clear the way” of patent obstacles by challenging the offending patent in a Patent Office proceeding (such as an IPR or PGR) to cancel the patent, or may file a Declaratory Judgment Action in federal court to seek a declaratory ruling that the seller does not infringe the patent or that the patent is invalid.
Conclusion
The intersection of U.S. patent law with the fertilizers, pesticides, rodenticides, and bulk chemicals industries is intricate, influenced by factors such as non-obviousness, the distinction between product and process patents, antitrust considerations, federal and state regulatory frameworks, and international patent landscapes. Staying abreast of legal precedents and maintaining transparent communication with regulatory bodies are imperative for companies operating in these sectors to safeguard their innovations and navigate potential legal challenges effectively.
How we can help you?
Agrochemicals and bulk chemicals raise important patent and regulatory issues. We can help “clear the way” of potential IP rights. We also help enforce patents against competitors. For investors, we provide the deep dive due diligence to find any problems in the patent portfolio or vet out the accuracy of pitch-decks. We help clients in patent litigation, appeals, counseling, opinions of counsel, and PTAB proceedings. When your current firm needs help or the client needs a change of counsel, we can help.
About Upadhye Tang LLP
Upadhye Tang LLP is an IP and FDA boutique firm concentrating on the pharmaceutical, life sciences, and medical device spaces. We help clients with navigating the legal landscape by helping on counseling and litigation. Clients call us to help move drug and device approvals along and to represent them in IP and commercial litigation. Call Shashank Upadhye, 312-327-3326, or by email: shashank@ipfdalaw.com, for more information.
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