AN extraordinary case in which a giant US meat corporation and a small US shelf-company appear set to be granted a patent over methods of genomic analysis in the Australian cattle industry is set to come to a head this Friday.
Meat & Livestock Australia and Dairy Australia are appealing an IP Australia decision in 2016 to grant co-applicants Cargill Inc and Branhaven LLC a patent over gene sequencing methods using single nucleotide polymorphisms (SNPs) in Australian cattle.
In a judgment handed down on February 9, Federal Court of Australia justice Jonathan Beach gave the co-applicants three weeks to narrow their claim to improve its clarity. The written decision suggested that if the co-applicants did that, the MLA appeal would be dismissed and their patent application granted.
The judge will rehear their claims and, presumably, make a final decision on the case this Friday.
If granted, the patent application potentially gives Cargill and Branhaven access to massive streams of license fee income from the Australian cattle industry, a Senate Estimates hearing in Canberra was told this morning.
Senate Rural and Regional Affairs and Transport Legislation Committee chair Barry O’Sullivan described the patent bid as nothing less than an assault on the entire livestock sector in Australia.
Every livestock industry should be ‘petrified’, he said, suggesting a successful patent in this case could potentially open the floodgates to the patenting of genetic and genomic work in other livestock sectors as well.
“Dairy people, pig people, goat people, they need to be watching this very carefully because this will roll on once a precedent is set,” he said.
Cargill, which has a significant stake in Australia’s beef industry by virtue of its joint venture partnership with major processor Teys Australia, was not “doing itself any favours with the cattle producers of Australia” if it did not truncate the patent application now, the Senator O’Sullivan said.
Senator O’Sullivan told MLA he would dedicate the resources of the Senate Rural and Regional Affairs and Transport Legislation Committee to helping to fight the patent application if the court case resulted in an unsatisfactory outcome for industry.
Beef Central understands the Senate Committee is also considering resurrecting a planned Senate Inquiry into the patenting of genetics in the agriculture sector which had been planned last year.
Terms of reference for such an inquiry were drawn up last year, however it is understood the MLA-Branhaven/Cargill court case proceedings overtook the process so it was put on the backburner until the court case played out.
As Beef Central recently reported, the law firm that originally represented Branhaven has revealed it has not been paid legal fees owed to it by Branhaven, and has subsequently issued proceedings against the company in the Victorian Supreme Court.
The law firm has obtained a freezing order over the Patent, any award of costs made in favour of Branhaven in the Federal Court proceeding, and the proceeds of any damages awarded in favour of Branhaven for infringement of the Patent.
Richard Norton told this morning’s Senate Estimates hearing that the worst case scenario is that Branhaven, supported by Cargill, narrows its claim and the claim is successful.
Mr Norton said he understood that Branhaven owed its former legal counsel $1.2 million in unpaid legal fees.
He suggested that if the $1.2 million in legal fees were paid, the freezing orders were lifted and then Cargill did not support Branhaven in the narrowing of the claim, “then it is all over”.
Senator O’Sullivan suggested that the smaller company Branhaven was like ‘a couple of carpet baggers’ who didn’t have a penny to rub together.
He said Cargill Australia, a subsidiary of Cargill Inc in the US, had stated it had done all in its power “to resist and terminate this journey”, and that it was “powerless in this partnership” with Branhaven.
However, the Senator said he did not accept this was the case:
“I want every cattle producer in Australia to have a listen to this..
“This will cost Cargill a lot more than $1.2m if they persist with this.
“Cargill Australia’s advice to me has been that in the partnership arrangement, they are quoting US Cargill, that they are powerless, meaning the power is with the partner Branhaven, so they have somehow relinquished their capacity.
“….their suggestion is Branhaven can do whatever it likes and we’re sort of dragged along like the tin can behind the car.
“That’s what they said, I didn’t accept it when they told me.”
Mr Norton said he did not accept that was the case either.
He said the Cargill-Branhaven patent application was a “claim against the Australian industry”.
In a public statement issued earlier this week Cargill Australia said that in Australia, co-ownership of patents meant one owner could not act without the other owner’s consent.
During this morning’s questioning Mr Norton told the Senators he was about to read out legal advice MLA had received that contested whether Cargill Australia was powerless to act.
He was interrupted by Senator O’Sullivan before he did and the statement was not read out.
Asked following this morning’s session what the statement was, MLA provided the following statement from Mr Norton to Beef Central:
“As I understand it there is nothing in the Patents Act that deals with amending a patent where there is more than one patent owner. So, I would expect that either both parties have to apply to amend or the part-owner that does not apply has to make it clear that it consents to the amendment application made by the other owner.
“In the court case Cargill has a submitting appearance so they are basically consenting to any order made by the court, except on costs. They could withdraw this and become an active litigant. Unless and until they do this Branhaven can apply to the court to amend and if the court allows that amendment, Cargill is taken to agree with the amendment order.
If the amendment issue went back to the patent office, Cargill has to either explicitly consent or make the amendment application along with Branhaven.”
Mr Norton told this morning’s committee session MLA will look to the next level of appeal if iti Federal Court appeal against the patent is dismissed.
Senator O’Sullivan pledged the committee’s support.
“Let me say to you publicly anything that you need, any support that you want mustered in this place, and I really don’t care how Cargill come out the other end with this, I give you a guarantee that I think will be shared by some committee members here, we will give you whatever support we can and I agree with the contemplation that we need to review the law in relation to patents generally but certainly the focus on patents in agriculture.”
IP legal experts Shelston IP have stated that the significance of the Federal Court decision on February 9 was twofold.
“Firstly, given the nature of the claims, the 253 Application, once it is granted, may significantly impact the use of genomic analysis in the Australian livestock breeding industry.
“Secondly, and perhaps more importantly, the decision provides certainty in relation to the patentability of claims defining practical applications of gene sequences, including methods of genetic screening.
“In this regard, the decision potentially foreshadows the outcome of the Sequenom and Ariosa case, concerning the patentability of genetic testing methods.”