Biotechnology – An Overview

Background

A uniformly accepted definition of biotechnology does not exist. The broadest definition includes any use of biological sciences to develop products and all conventional plant or animal breeding techniques. In the media, biotechnology generally means newly developed scientific methods used to create products by altering the genetic makeup of organisms and producing unique individuals or traits that are not easily obtained through conventional breeding techniques. These products are often referred to as transgenic, bioengineered, or genetically modified because they contain foreign genetic material. Agriculture is one of the first industries radically affected by biotechnology on both a legal and fundamental production level.

Biotechnology’s vast array of products impacts agriculture in a multitude of ways. Cattle hormones produced in bacteria are used to increase milk production in dairy cows. Modified plants that produce huge quantities of particular proteins survive herbicide application which kills the same species’ unmodified state. Modified tomatoes that resist bruising during shipment are allowed to ripen on the vine. Modified corn plants produce plastic precursors which decreases the plastics industries’ need for petroleum. Modified rice known as “Golden Rice” produces high levels of vitamin A that may enable third world countries to prevent blindness in children. Modified cotton plants known as “Bt Cotton” produces bacterial toxin containing its’ own insecticide. Producing meat and poultry food products by growing cells of livestock or poultry in a bioreactor and harvesting those cells to make food – a practice known as “cellular agriculture.” Farm-raised salmon grow twice as fast as their wild counterparts. Biotechnology companies indicate that this list is only the beginning and that the possibilities are limited only by imagination.

However, biotechnology consumer acceptance globally varies. The relatively recent development of this technology has presented novel legal issues for private parties and governments. To solve this the law attempts to keep pace with scientific advancement through regulation, assignment of liability, protection of intellectual property rights, and international dispute resolution. The limitless possibilities and exotic combinations of organisms pose a remarkable challenge for law and policy makers.

Federal Regulatory Authority

In biotechnology, administrative agencies such as USDA/FDA/EPA have been given authority by Congress to create regulations implementing the requirements of the federal law.  In 2024, the Supreme Court of the United States issued two rulings that are expected to have a major impact on how judges decide cases challenging those regulations and that agency authority.

Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024) overruled the long-standing doctrine of deference established in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Chevron deference was a two-step process that clarified how and when federal courts should defer to an agency regulation interpreting a statute.  Chevron only applied in situations where a court had determined that the statutory language the agency was interpreting was ambiguous.  If it was ambiguous, the court would consider whether the agency’s interpretation of the statutory language was “reasonable”.  If it was reasonable, the court was required to defer to the agency’s interpretation. If it was not, the court would overrule the interpretation.

Loper Bright formally overturned Chevron. In a 6-3 decision, the Supreme Court held that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]” Following the ruling, courts are instead required to exercise independent judgment in determining whether an administrative agency has acted within its statutory authority.  Courts may still seek guidance from the agencies involved, but courts will no longer be required to defer to an agency’s interpretation of a statute.

In Corner Post, Inc. v. Bd. of Governors of the Fed. Rsrv. Sys., 144 S. Ct. 2440 (2024), the Supreme Court extended the period of time during which a party may file a lawsuit challenging federal agency actions. According to 28 U.S.C.S. § 2401(a), the six-year statute of limitations began to run when an administrative agency’s action was “final.”  In Corner Post, the Supreme Court ruled that an action becomes “final” when a plaintiff suffers an injury, rather than when a “final regulation” is released. This ruling expands the potential for plaintiffs to challenge federal agency rules and regulations that have been final for over six years.

While the full effect of these two rulings remains to be seen, it is highly likely that the agricultural industry will be impacted by the Supreme Court’s decisions. Importantly, the rulings fundamentally change how courts will resolve lawsuits challenging agency regulations for misinterpreting the agency’s statutory authority. Impacts are most likely to be felt in areas of the law, such as biotechnology, dominated by statutes with relatively ambiguous language where Congress has relied on agency regulations to fill in specifics.

Regulation

Under the policy statement contained in the Coordinated Framework for Regulation of Biotechnology, regulation of biotechnology products in the United States is handled by three agencies: the Food and Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), and the Environmental Protection Agency (“EPA”). As federal policy is that biotechnology itself has no inherent dangers, biotechnology products are regulated under existing laws in the same manner as non-biotechnology products. Additionally, no specialized regulatory law or agency has sole authority over biotechnology. The regulatory burden falls on a particular agency based on the product’s intended use and chemical composition. Due to their novel combination of traits, some products may require regulation under multiple agencies. Both the transgenic organism and the products produced from it may be regulated.

The FDA is responsible for regulation of food, feed, human drugs, and animal drugs; the EPA regulates pesticides and toxic substances; and the USDA oversees meat, poultry, and egg products, plant pests and noxious weeds, and animal biologics. Under this regulatory structure, transgenic plants may be regulated by the USDA as potential plant pests and may be regulated by the EPA if they produce pesticides or potentially toxic chemicals. Transgenic animals may be regulated by the FDA under the theory that the genetic manipulation is an animal drug, and if the genetic change produces either a drug, food, or biologic, then that product may also be regulated by the FDA. If the transgenic animal produces a meat, poultry, or egg product, the product will also be regulated by the USDA. Additionally, the potential for EPA regulation exists if the transgenic animal produces potentially toxic chemicals. The EPA also has the ability to regulate microorganisms under their authority to regulate toxic substances.

The regulation of products derived from transgenic organisms offers other ways for agencies to regulate biotechnology. The FDA regulates whole foods, food additives, dietary supplements, and drugs obtained from transgenic plants. Foods derived from transgenic animals may be regulated by the FDA under the theory that the genetic material is an animal drug; transgenic meat, poultry, and egg regulation falls to the USDA; pesticide and chemical products will be regulated by the EPA.

When it comes to cultured meat and poultry food products, FDA and USDA share oversight responsibilities. Cell-cultured meat and poultry food products are produced by growing cells in vitro or in a controlled environment and harvesting those cells to make food. In 2019, FDA and USDA agreed to jointly oversee the use of animal cell culture technology to produce food. FDA has jurisdiction of the animal cell culture process during the preharvest phase. During this phase, livestock or poultry cells are collected and generally placed in a bioreactor to grow and multiply. Jurisdiction transfers to USDA at the harvest phase, which occurs when the cells are removed from the controlled environment. USDA retains jurisdiction during the postharvest phase and labeling of cultured meat and poultry food products.

United States regulation of biotechnology is a complex structure in which three agencies work together to regulate technology that did not exist when current regulatory laws were enacted. The current regulatory framework is largely untested and continues to evolve as new transgenic organisms and products are brought to market.

Labeling

Federally, the FDA and USDA have regulated genetically modified product labels. Both agencies examine whether a label is false or misleading, known as misbranding. The FDA is responsible for bioengineered human and animal food, drugs, and cosmetic products, and does not have the authority to pre-approve labels of these products. The USDA is responsible for inspecting labels of genetically modified meat, poultry, and egg products to verify they are not misleading. The USDA has pre-marketing authority on labels and requires manufacturers to submit labels for approval before the product enters commerce.

Labeling products modified by biotechnology was voluntary until Congress passed an Act stating otherwise. This Act required the USDA to create the National Bioengineered Food Disclosure Standard (the Standard) to establish a national standard for bioengineered foods and preempt varying state laws on the issue. Under the Act, a bioengineered food is a food “(A) that contains genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (“DNA”) techniques; and (B) for which the modification could not otherwise be obtained through conventional breeding or found in nature.” Essentially, bioengineered foods are modified using rDNA techniques that cannot be achieved through conventional breeding or in a natural setting. Based on this definition, the Standard creates labeling and record keeping requirements for bioengineered foods.

Under the Standard, a covered or regulated entity includes food manufacturers, importers, and retailers. Covered entities are required to make appropriate disclosures under the Standard and maintain appropriate records. The federal law allows parties to choose one of four labeling methods for their disclosure: text indicating the use of bioengineered products; the use of a standardized symbol; an electronic link or QR code; or a text or telephone number (depending on the product’s label size).

The USDA stated the Agricultural Marketing Service (“AMS”) will develop and maintain a list of bioengineered foods to identify the crops or foods that are available in a bioengineered form and for which regulated entities must maintain records. The AMS updates the List as necessary to reflect currently available bioengineered foods but at least on a yearly basis through appropriate notice and comment periods. Noteworthy exclusions are enzymes, yeasts, and other microorganisms produced in controlled environments. If an entity has actual knowledge that these microorganisms or other foods included in their products are bioengineered, then disclosure and recordkeeping is required.

Regulated entities selling a food on the List must maintain records on whether that food is bioengineered or not. For example, if a regulated entity sells alfalfa that is not bioengineered, the regulated entity must document that fact. In the same manner, if the regulated entity sells bioengineered alfalfa, they must maintain documentation showing the food is bioengineered. If the regulated entity is selling a food for which they have actual knowledge that it is bioengineered, they must maintain documentation of such even if it is not on the List yet.

Starting January 1, 2022, covered entities became required to label products under the Standard. Prior to that date, covered entities could voluntarily place disclosures on product labels. Importantly, federal labeling laws and regulations preempt all state biotechnology labeling laws. This means state laws may not impose different or additional requirements that conflict with federal labeling laws and regulations. Previously, states like Connecticut, Maine, and Vermont enacted their own biotechnology labeling laws but now have to follow the federal regulation standards. However, states may administer their own remedies for federal standard violations. The USDA does not conduct any testing on bioengineered products. Instead, enforcement is compliant driven and based on appropriate record maintenance.

The Standard has five important exemptions: food served in a restaurant or similar retail food establishment; very small food manufacturers; foods with unintentional bioengineered ingredients under a presence threshold; foods derived from animals that consumed bioengineered feed; and foods certified under the USDA National Organic Program (“NOP”). Under 7 C.F.R. § 66.1, exempt restaurants and similar retail food establishments include a wide variety of venues including: planes, trains, food trucks, cafeterias, and bars, among others. A very small food manufacturer is exempt where the manufacturer has “annual receipts of less than $2,500,000.” The Standard does not require disclosures for “food in which no ingredient intentionally contains a bioengineered (BE) substance, with an allowance for inadvertent or technically unavoidable BE presence of up to five percent (5%) for each ingredient.” The Standard also exempts foods that are derived from animals that are themselves not bioengineered, but that eat bioengineered feed. Lastly, the Standard exempts food products certified under the NOP as bioengineered foods cannot obtain certification under the NOP.

Liability

Liability for biotechnology damages generally follows traditional common law actions, as no unique actions have developed solely for transgenic product damages. Damage from the use of biotechnology usually consists of contamination of non-genetically modified organisms by genetically modified ones. Biotechnology damage has the potential to fall under five different common law actions: trespass, strict liability, negligence, private and public nuisance.

One possible liability theory may be in an action for trespass. For example, if transgenic pollen moves from the field where it is produced onto another’s property, a physical invasion may occur. If this invasion results in damage, then an action for trespass may be an appropriate choice.

Strict liability may also be an avenue for the recovery of damages if a farmer is damaged by a neighbor’s transgenic crop. This recovery theory requires one important step: growing transgenic crops must be designated as an abnormally dangerous activity. Only then can the injured party recover despite precautions taken by the other party. However, demonstrating that raising transgenic crops is an abnormally dangerous activity is becoming more difficult with the widespread use of such crops.

Negligence is also a potential method of establishing liability. This would require that biotechnology companies and farmers using transgenic crops must take reasonable precautions to prevent damage to other parties. Then if entities fail to reasonably protect others from the risks associated with transgenic organisms, they may face negligence liability.

Private nuisance is also a theory that may be used to confer liability onto biotechnology users. Liability may arise if it can be shown that the use of transgenic organisms unreasonably interfered with the quiet use and enjoyment of a neighbor’s land and caused significant harm.

Another theory is public nuisance, which allows a private party to recover damages and to prevent further harm to the public. There is no requirement of distinct harm to land rights. To recover, the required harm is a demonstration of an unreasonable interference to a right common to the public. In order to recover, the individual who pursues the action must have been damaged in a special manner distinct from the harm suffered by the general public and must prove that growing a particular transgenic crop interfered with a common to the general public.

These theories of liability attempt to use traditional common law causes of action on new and expanding technology. Liability for farmers may also potentially arise under biotechnology agreements and contracts. Most seed companies selling biotechnology seed require that farmers sign a technology agreement. These agreements often give seed company representatives the right to access farmers’ property for inspection, limit the ability of farmers to save seed, and control production practices involving the biotech seed. These biotechnology agreement terms may leave farmers open to liability for breach of contract if they fail to follow the agreement.

Another source of liability may be incorrect crop marketing. If a farmer is contracted to deliver crops free from biotechnology, failure to do so could lead to liability. Notably, farmers who certify their crop is biotechnology-free may still be liable due to contamination despite lack of control or knowledge of such contamination.

Intellectual Property

Intellectual property rights provide incentives for new product development by rewarding inventors or developers with protections such as exclusive rights for the making, using, and selling of the new product. Biotechnology research is expensive, but its products are lucrative. However, the technology itself is easily detected by scientific tests. These factors lead to a rapid development of intellectual property rights in biotechnology. Then in turn, the development of intellectual property rights fuels biotechnology’s scientific advancement.

Until the Plant Patent Act of 1930 (“PPA”), living organisms were unpatentable because they are products of nature and therefore did not meet the requirements of utility patents. The PPA allows developers of new and distinct plants to prevent the asexual reproduction, sale, and use of patented plants. However, it does not protect sexually reproduced plants.

The Plant Variety Protection Act of 1970 (“PVPA”) provides protections to breeders who create new and distinct varieties of sexually produced plants. It prevents the unauthorized sale or growing of a protected plant. The PVPA protects both the plant and its seeds for twenty years. The PVPA also contains an exemption for farmers who save seed for their own use and an exemption for research using the protected plant.

In 1980, the Supreme Court decided that living organisms were patentable under general patent law if the organism met the patent requirements. This ruling resulted in patents both on the technology used to create transgenic organisms and the new organisms themselves. Varieties created with traditional breeding methods are also patentable. This patent style limits the sale, use, and manufacture of the protected plants for seventeen years and does not provide the exemptions on protection that are available under the PVPA. Due to the elimination of the PVPA exemptions for their products, biotechnology companies are able to assure a greater return on their investment for transgenic research and development, which has fueled the biotechnology revolution in agriculture. Patent holders may allow others to use their protected process or product by granting a license.

Typically, when farmers buy transgenic seed, they are granted a license by the patent holders to use that seed on a limited basis in their farming operation. The technology agreements that farmers normally sign upon purchase of transgenic seed also contain provisions designed to protect the intellectual property rights of the patent holders.

Patents are issued on a national basis, and a patent must be obtained in each country where protection of the biotechnology product is sought. Generally, patent systems existed only in developed countries, but biotechnology has driven the development of patent law internationally in both developed and developing countries. The Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS”) mandates that all countries of the World Trade Organization (“WTO”) develop patent or other intellectual property rights protection systems.

The spread of these systems has also caused debate about farmers’ rights. The farmers’ rights debate is based on the idea that biotechnology companies are given free access to traditional plant varieties used and developed by farmers for generations. The farmers are then required to pay for the genetic modifications made to their traditional varieties without receiving any benefit for the basic genetic information that they provide to the biotech company.

International Issues

In addition to the intellectual property issues, biotechnology has fueled numerous international disputes because different areas of the world vary in their level of acceptance of the technology. The European Union has used safety concerns to prevent importation of transgenic crops. Advocates of biotechnology allege that these concerns are not based on legitimate science and are an illegal trade barrier under WTO agreements. Other groups fear that biotechnology will damage the ecosystems of developing countries or that developing countries will be unable to pay for access to the technology that may benefit them most. Others argue that biotechnology is key to feeding the world’s hungry by developing high yielding crop varieties for all parts of the world, and that biotechnology benefits the environment. As these disputes are addressed, many international legal issues will be confronted.