Biotechnology – An Overview

Background

A uniformly accepted definition of biotechnology does not exist.  Under the broadest definition, the use of biological sciences to develop products, conventional plant and animal breeding techniques, conducted since the dawn of civilization, fall under biotechnology.  In the popular press, biotechnology generally refers to 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 this new technology on both a fundamental production level and a legal level.

A vast array of products derived from biotechnology impact agriculture in many ways.  Cattle hormones produced in bacteria are used to increase milk production in dairy cows.  Plants engineered to produce huge quantities of particular proteins survive herbicide application that kills unmodified plants of the same species.  Tomatoes modified to resist bruising during shipment are allowed to ripen on the vine.  Corn plants that produce the precursors of plastics decrease the need for petroleum in the plastics industry.  Rice modified to produce high levels of vitamin A may enable third world countries to prevent blindness in children.  Cotton plants designed to produce a bacterial toxin contain their own insecticide.  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, consumer acceptance of these products varies across the globe.  The relatively recent development of this technology has presented novel legal issues for private parties and governments as 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.

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”).  Because federal policy takes the position that biotechnology itself has no inherent dangers, biotechnology products are regulated under existing laws in the same manner as non-biotechnology products, with no specialized regulatory law or agency having 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.  The potential for EPA regulation additionally 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.  Whole foods, food additives, dietary supplements, and drugs obtained from transgenic plants are regulated by the FDA.  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.

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.  Much of the current regulatory framework is untested and will continue 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, which is called 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, verifying all labels 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 recently, when Congress passed an Act requiring the mandatory labeling of bioengineered foods. This Act required the USDA to create the National Bioengineered Foods Disclosure Standard (the Standard) in an effort 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.

The Standard establishes labeling requirements for bioengineered foods. Under the Standard, a covered or regulated entity includes: food manufacturers, importers, and retailers. These 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). Regulated entities that sell a food on the List maintain must 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.

The USDA has published the List of Bioengineered Foods (the List) which identifies foods that are available for commercial production in bioengineered form. The foods included on the bioengineered list, therefore requiring disclosure and recordkeeping, are: alfalfa, ArcticTM apples, canola, corn, cotton, eggplant (BARI Bt Begun varieties), Papaya (ringspot virus-resistant varieties), Pineapple (pink flesh varieties), Potato, Salmon (AquaAdvantage®), Soybean, summer Squash, sugarbeet. The USDA will update the List as necessary to reflect bioengineered foods that are currently available but at least annually through appropriate notice and comment periods. A noteworthy exclusion from the List are enzymes, yeasts and other microorganisms produced in controlled environments. If an entity has actual knowledge that these microorganisms or other food included in their products are bioengineered, then disclosure and recordkeeping is required.

Covered entities must comply with mandatory labeling requirements by the compliance date of January 1, 2022, when all bioengineered products must be labeled; however, labels may be voluntarily placed on foods beginning January 1, 2020. 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. The states that previously enacted mandatory labeling laws, like Connecticut, Maine, and Vermont, will now have to follow the standards of the federal regulations, which includes accepting all federally approved methods of labeling. However, states can administer their own remedies for violations of this federal standard. Further, USDA will not conduct any testing for bioengineered products. Instead, enforcement will be complaint driven and based on appropriate record maintenance.

There are five important exemptions to the Standard: 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 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, bars, etc. 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 National Organic Program (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 damage from transgenic products.  Damage from the use of biotechnology usually consists of contamination of non-genetically modified organisms by genetically modified ones.

One possible theory for liability may be in an action for trespass.  When 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.  First, growing transgenic crops must be designated as an abnormally dangerous activity. Then, the injured party can 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 by requiring that biotechnology companies and farmers using transgenic crops utilize reasonable precautions to prevent damage to other parties.  Entities that fail to reasonably protect others from the risks associated with transgenic organisms may face liability in the form of negligence actions.

Private nuisance is also a theory that may be used to confer liability onto users of biotechnology.  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.

Public nuisance 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 right common to the general public.

These theories of liability attempt to use traditional legal causes of action on new and expanding technology.  Liability for farmers may also potentially arise under biotechnology agreements and contracts.  Most seed companies that sell 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.  The terms of these technology agreements may leave farmers who do not carefully follow the agreement open to liability for breach of contract.

Marketing of crops may also be an avenue of liability for farmers through cross-contamination of their crop by transgenic crops.  Farmers who are under contract to deliver crops free from biotechnology may be unable to provide such a marketable commodity due to contamination.  Farmers who certify that their crop is free from biotechnology may be liable due to contamination from sources beyond their control or knowledge.

Intellectual Property

Intellectual property rights provide incentives for the development of new products 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, and its products are lucrative.  However, the technology itself is easily detected by scientific tests.  These factors are leading to a rapid development of intellectual property rights in biotechnology, and in turn the development of intellectual property rights fuels the scientific advancement of biotechnology.

Until the Plant Patent Act of 1930 (“PPA”), living organisms were considered unpatentable because they are products of nature and presumably 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.  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 protection includes both the plant and its seeds and lasts 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 able to be patented under general patent law if the organism met the patent requirements.  This has 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 able to be patented.  The patent 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 that 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 being 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 have existed in only 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 provided 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 developing countries 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.