Legal Implications of GM Crop Regulatory Lags Presentation to the 19 th ICABR Conference Ravello, Italy June 16-19, 2015 Martin Phillipson & Stuart Smyth University of Saskatchewan

Challenge: Trade disruptions cost grain industry over $1B/yr International regulatory lags disrupt trade

Introduction Approval times for GM crop varieties are continually increasing Average number of months for regulatory approval in the US from was 6 months From this rose to 13.6 months Europabio (2011) estimates this had increased to 25 months in the US Phillips McDougall (2011) identify this rising to a global average of 65 months

Regulatory cultivation approval times Source: Dewar, 2014.

Regulatory import approval times Source: Dewar, 2014.

What is driving this? The EU is in regulatory gridlock with nothing likely to be ever approved there again There are presently 74 GM varieties submission packages awaiting EU approval Lags of this nature are putting tremendous pressure on international commodity trade due to the low level presence of unapproved events Estimated cost to the grain handling industry is increasing every year, now in excess of $1 billion annually

Case study of Syngenta’s Viptera corn Viptera is an insect resistant variety Released to address insect losses of over $1 billion in lost yield and reduced grain quality annually Approved in the US in 2010, for planting in 2011 Received approval in 9 export markets Did not receive approval for import into China until end of 2014 (anticipated in early 2012) US corn exports to China dropped by 85%

Syngenta v Bunge lawsuit Bunge is a large American grain handling firm Longstanding policy of not accepting GM varieties for export to markets that have not approved the specific event In 2011, Bunge began refusing to accept Viptera corn due to China’s lack of acceptance Syngenta then sued Bunge for lost profits, reputation damages and to remove the policy Settled out of court after China approved Viptera corn for import, in Dec. 2014

Cargill v Syngenta lawsuit In Sept. 2014, Cargill filed a claim against Syngenta claiming losses of $90M from comingling of Viptera corn into Chinese exports Releasing Viptera corn without Chinese approval involved a calculated risk that approval would occur prior to corn shipments being rejected The US grain industry sought assurances from Syngenta that it would not release further varieties without Chinese approval

Viptera related class action lawsuits In Oct. 2014, 4 different farmer class action lawsuits began seeking damages from Syngenta Claims of $1B involving over 300 farmers filed The claims argue that corn prices in the US have been adversely affected due to China’s rejection of American corn shipments Syngenta is defending itself by stating that American farmers have the right to timely access of new technologies

Patent Cooperation Treaty (PTC) With a synchronous global approval system very unlikely, an alternative is urgently needed to the costly trade losses and lawsuits An April 2014 report estimated total grain industry trade disruption costs/losses of between $1B and $2.9B Status quo can’t continue There is no international patent approval agency capable of granting multiple country approvals The PTC came into force in 1978 and has 148 member countries The PTC makes it possible to receive international patent protection in all 148 countries simultaneously

PTC continued Applicant has up to 18 months to receive patent approval in the identified PTC countries During this period, it cannot be rejected by any country, allowing the applicant to provide additional information if required All 148 member country patent offices have access to documents filed with the patent in making their own decision In 2013, over 200,000 patent applications were received by the PTC

Challenges of applying the PTC We identify 3 major challenges to adapting the PTC to manage regulatory lags in the approval process of GM crop varieties: 1.Identifying a global champion to lead the effort  Several years of effort will be required to develop and structure such an agreement 2.Lack of incentives for non-GM nations to participate 3.Monitoring and enforcing such an agreement would be daunting, to say the least

Conclusions Regulatory approval of GM crop varieties has become a political process over the past 5 years Various national governments now directly interfering with the regulatory approval systems (ex. EU, India) The status quo is no longer an option given the billions of dollars of trade disruptions Ultimately, any such global agreement may involve ‘fencing-out’ non-GM crop adopting nations or regions

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