IT now seems very unlikely global meat giant Cargill will be coming to the rescue of cattle producers faced with the possibility of having to fork out licence fees to use game-changing genomic technology.
Legal experts say Cargill’s hands could well be tied as far as putting an end to attempts to patent gene-based methods for improving breeding, despite the fact the big beef business is a co-owner of the patent application.
Even if they are not, Cargill’s actions indicate it will not be moving to halt the bid.
Lawyers and intellectual property experts have told Fairfax Media they believe the patent will be granted.
Meat and Livestock Australia (MLA) has fought hard to halt the patent bid from Cargill USA and Branhaven, a US company believed to specialise in buying up unused patents cheaply and extracting value from them.
MLA first appealed the the Australian Patent Office’s decision to allow the claim, titled “Compositions, Methods and Systems for Inferring Bovine Traits” to proceed, but was unsuccessful.
It then initiated an appeal in the Federal Court of Australia.
Cargill opted not to actively defend that appeal and has indicated it wants to distance itself from its partner’s moves.
That position gave rise to beef industry pleas for Cargill to not allow any changes to the application, following the Federal Court ruling this month that the bid was too broad.
The judge gave the applicants a short period to make amendments and indicated doing so would see MLA’s appeal denied.
Cargill issued an ambiguous statement this week referring to agreements between parties co-owning a patent application in relation to one acting without the other’s consent.
The one clear aspect was Cargill’s claim it was not accurate to say the ball was now in its court on this matter.
Legal experts this morning explained the usual situation, and indeed the default in Australia, was that one co-owner could not act unilaterally but if the companies had entered into an agreement that could be changed.
It was not clear from Cargill’s statement whether such an agreement actually existed, lawyers said.
However, freezing orders made by the Supreme Court of Victoria, referred to in Cargill’s statement, would prevent the company from taking any action on the patent application, they said.
One lawyer provided this interpretation to Fairfax Media: “Cargill has taken a passive role in the appeal. It has let the other parties fight it out, and it has simply submitted to whatever decision will be made. Cargill is correct in saying the ball is not in its court - it has refused to play the game. The matter is not in its hands. It has washed its hands of any responsibilities.”
That is likely to infuriate Australia’s beef industry and politicians, who have issued both veiled and not-so-veiled warnings to Cargill that its reputation is on the line.
Beef industry experts say the patent means fees will be payable for the application of more than half the DNA-associated genetic tests used in Australia’s beef and dairy industries to the US companies.
That is why MLA has spent more than a million dollars on the legal battle.
MLA’s investment in genomic research and development – on behalf of its levy payers and the Australian Government which matches industry’s research investment – is substantial and currently accounts for around 15 per cent of its total on-farm research and development portfolio.
MLA managing director Richard Norton this week made an impassioned plea to Cargill.
Speaking at a big livestock breeding and genetics forum in Brisbane he said: “Fundamentally a judge has said if Branhaven narrows the claim the patent will be granted.
“So where we are doing work around this, say the 50,000 SNP chip, we as an industry would be paying a licence fee to Branhaven.
“Please Cargill do not support Brahaven to narrow that methodology so we as an industry have to pay for work we do around genetics.”
Queensland Nationals senator Barry O’Sullivan, who raised the prospect of a senate inquiry on genomics patents in agriculture when MLA first launched its appeal in 2016, was even more forthright.
If there was an opportunity to bring this matter to a close and take this threat away from the beef industry, Cargill should step up, he said.
“Cargill needs to be careful - there is a dependent relationship between them and the beef industry in Australia and they need to consider what their best interests are,” he said.
“It is important to distinguish Cargill Australia from Cargill USA but the company has told us they were unwilling partners in the pursuit of this patent and they are frustrated at what ability they have in terms of the arrangement of the joint venture.”
Senator O’Sullivan said this case was seen as a precursor for other genomics patent claims in agriculture and as such, terms for an inquiry had even been drafted.
“However, because a legal appeal was on, the view was taken we should monitor what the courts had to say before giving consideration to an inquiry,” he said.
If there was is an outcome which would negatively impact the Australian beef industry, he said he would look towards pursuing the senate inquiry option.