In today’s increasingly litigious seed industry, the onus is on seed companies to ensure they have their bases covered.
It was to a full house at the Canadian Seed Trade Association/Canadian Seed Growers’ Association joint annual meeting that Jason Mohrbutter delivered a presentation entitled Doing Business in a Litigious Society in July 2010. During the presentation, Mohrbutter explained the ins and outs of legal issues surrounding the sale of seed and liabilities in contracts, and concluded that industry standards and solid business practices were the best tools available to the seed industry as protection against lawsuits.
Three years later, not much has changed in terms of the laws surrounding the sale of seed in Canada, says Mohrbutter, a partner with the firm MacPherson Leslie and Tyerman LLP in Regina. Sale of Goods legislation and the Consumer Protection Act remain unchanged.
A farmer wishing to take legal action against a company based on defective seed has to provide a burden of proof that the seed is in fact defective, and this can be difficult, says Jason Mohrbutter. |
However, Mohrbutter believes that where there are laws, there will always be those who try to break them. “If there’s a continued emphasis on bringing in new varieties that are patent protected, I think that translates into increased monitoring and increased illegal activity,” he says.
In short, it’s in the interests of every seed company to ensure its bases are covered in a legal sense, whether the company is protecting itself against litigation regarding supposedly defective seed, or bringing action to protect its intellectual property.
Defective Seed
The quality of the seed is a central question at the heart of most cases brought against seed companies.
According to Mohrbutter, the Seeds Act and Seeds Regulations require a minimum level of quality to be present in all certified seed, and a buyer can reasonably expect that quality when they purchase the seed. Sale of Goods legislation in all provinces includes warranties that declare that the goods will be “fit for their purpose.” That purpose, for certified seed, is when planted under the right conditions it will result in a reasonable crop.
If a farmer wishes to take legal action based on defective seed, he or she is required to provide a burden of proof that the seed is in fact defective — but this can be difficult, says Mohrbutter. His 2010 presentation’s supporting paper phrases it this way: “For the buyer to succeed in demonstrating breach of the condition of merchantability he must show that the defect was such to destroy the workable character of the thing sold.”
Although the Consumer Protection Act is pro-consumer, any farmer who wishes to make a case for defective seed must be organized to do so successfully. “With respect to these cases it’s really about the evidence,” he says. “Farmers really have to have their ducks in a row, and a good record-keeping system, in order to show that the reason why they experienced the crop loss can be comfortably traced back to the seed.
“Farming is pretty precise — if you don’t follow the instructions, quite often I don’t think it’s a problem with the seed, it’s just unfortunate timing, or the farmer has made a mistake,” says Mohrbutter.
Similar rules apply in herbicide claims, such as when farmers claim to experience crop losses as a result of the use of herbicides. Mohrbutter says that in claims like these, the plaintiff always carries the burden of proof. “In a civil case, that’s not as onerous as it sounds — it means you have to prove your case is more probable than not,” he explains. “However, although the plaintiffs have to be persuasive enough to meet the burden, they don’t have to prove a complaint from a scientific standard.”
Mohrbutter cites one case he knows of in which a farmer successfully brought a case against a major seed company based on defective herbicide. In that case, the farmer was able to prove that he had applied the herbicide according to instructions, while other fields that had not been sprayed exhibited no problems. In that case, the judge found the farmer’s evidence sufficiently compelling.
“It’s not impossible for a farmer to win these cases,” says Mohrbutter.
“Farming is pretty precise — if you don’t follow the instructions, quite often I don’t think it’s a problem with the seed, it’s just unfortunate timing, or the farmer has made a mistake.”
– Jason Mohrbutter
Patent Protection
Mohrbutter says his firm is kept busy with patent protection for crops and seed, as well as plant breeders’ rights for several clients in the industry.
“In terms of companies who own patent protection on seed, as a general statement I’d say that they’re diligent in monitoring that their rights are being respected. And certainly actions are being brought,” he says.
He predicts that over time, patent protection for new technologies in seed will become increasingly important in Canada, although the atmosphere of the Canadian seed industry hasn’t yet matched the intensity in the United States.
Seed companies looking to protect their intellectual property in Canada’s increasingly litigious environment are already closely monitoring that property to ensure their rights are respected. “There’s a good structure in place to protect people who have rights, either through a patent right or plant breeders’ rights, and it’s really incumbent on the rights holder to monitor what’s going on from the legal perspective,” Mohrbutter emphasizes.
Surprisingly, he adds that most cases of rights infringement in the seed industry do not go to trial in Canada. In Saskatchewan particularly, there is a judicial procedure that all parties must go through before a case goes to trial. “There’s a very pronounced judicial emphasis on settling,” Mohrbutter says of cases in which it is assumed there is a reasonable settlement to be had. “It makes sense in most cases to resolve.”
This does not mean that the rights holder of plant breeders’ rights or a patent is forced to go through a watered-down legal process, he says. On the contrary, seed companies can still protect themselves, even if a lawsuit results in a settlement. “By and large the process is still a very effective way for rights holders to protect those rights.”
What it comes down to in all cases is due diligence. If seed companies are acting in good faith and also keeping up to date on the legal issues surrounding their products, they have little cause for concern. Good business practices, after all, result in good business, period.
Julienne Isaacs
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Download a PDF copy of the supporting paper to Jason Mohrbutter’s presentation, Doing Business in a Litigious Society here: seedgrowers.ca/ |
