Agricultural Biotechnology:
Legal Liability Issues
Drew L. Kershen
Earl Sneed Centennial
Professor of Law
University of Oklahoma
Copyright 2006 Drew L. Kershen, all rights reserved
Adventitious Presence
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Unintended presence of something other than the
desired crop
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Weed seeds, seeds from other crops, dirt, insects, foreign
materials (e.g. plastic, wood)
In context of transgenic crops, presence of
transgenic materials (seed, parts, pollen)
Historical and Ubiquitous
–
AOSCA certified hybrid corn
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0.5% seed of other varieties or off-types
2.0% inert material
Pure hybrid seed corn at 98%
Coexistence
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Three themes
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Examples of same species crops
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Farmer choice
Good Husbandry
Neighborly cooperation
Canola (cooking oil) and rape (industrial oil)
Malting barley and feed barley
Food corn, feed corn, industrial corn (starch)
USDA grades and standards
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# 1 corn – allows 2% broken corn and foreign material
Coexistence

Organic Farming Research Foundation, 4th National
Organic Farmer’s Survey (2002)
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92% (938 respondents) had no direct costs related to
transgenic crops
4% had payments for testing seeds and inputs. Probably
not an additional cost
19 respondents reported positive tests for transgenic
materials – 2% -- assuredly trace amounts
4% claimed some type of market loss – To be explained
later.
Coexistence Studies
Level of tolerance recognized establishes the costs and
difficulty of compliance
–
Research Institute for Biological Cultivation (FiBL) (Frick,
Switz., 2004) (World Wildlife Foundation)
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0.1% detectable level; separation distances of 1 km for corn,
600 m for rape, 100 m for wheat
Confederate Research Institute for AgroEcology and
Cultivation (Agroscope FAL) (Reckenholz, Switz. 2005)
(Swiss Federal Office of Agriculture)
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0.5% detectable level; separation distances of 50 m for corn,
50-400 m for rape (depends on species), no separation for
wheat
Coexistence: Conclusion
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Zero tolerance is not achievable without a
ban on transgenic agriculture.
By following reasonable agronomic practices,
such as those of AOSCA, conventional,
organic, and transgenic agriculture can easily
coexist.
Stricter standards than those established by
law should be contractual obligations.
Legal Issues:
Organic Certification


Adventitious presence does not affect organic
certification for organic farms or organic products.
NOP Final Rules at pp. 33-35,
www.ams.usda/gov/nop/NOP/standards
–
“The presence of a detectable residue of a product of
excluded methods alone does not necessarily constitute a
violation of this regulation. As long as an organic operation
has not used excluded methods and takes reasonable steps
to avoid contact with … excluded methods … the
unintentional presence of … excluded methods should not
affect the status of an organic product or operation.”
Organic Standards in the EU

2.2.3. Labelling threshold values: “The organic farming
regulation establishes that no GMOs shall be used in
production. Thus, materials, including seeds, which are labelled
as containing GMOs cannot be used. However, seed lots
containing GM seeds below the seed thresholds (which would
not need to be labelled for this GMO presence) could be used.
The organic farming regulation does allow for the setting of a
specific threshold for the unavoidable presence of GMOs, but
no threshold has been set. In the absence of such a specific
threshold, the general thresholds apply.” COMMISSION
RECOMMENDATION of 23 July 2003 on guidelines for the development of national
strategies and best practices to ensure the coexistence of genetically modified crops
with conventional and organic farming (2003/556/EC)
Legal Issues:
Contractual Obligations
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Depending on the contract specifications,
adventitious presence can affect premiums and
market access for both conventional and organic
producers.
IFOAM guidelines on transgenic crops
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“Organic certification shall not imply it is a ‘GE-free’
certification. Rather it shall be presented as guaranteeing
‘production without GE/GMOs’. As there is no guarantee
that organic products are 100% free … Organic producers
and associations shall actively inform the consumers of this
fact to insure fair marketing claims and to avoid future
debates about consumer deception.”
Contract Issues
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Contractual obligations
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Farmers must pay attention to the contract terms
 Production standards, product standards
 Contract production widespread – common issues
Farmers should not promise what they cannot control
 100% GM free versus planted seed certified nontransgenic
 100% GM free at elevator versus reasonable care to
avoid mixture on own farm
Contractual Issues
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Inadvertent Presence
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Tolerance standards in the contract
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Rejection of the crop – loss of premium; sell as commodity crop
Acceptance and blending – 3% Korea; 5% Japan, 0.9% EU – fraud in the
acceptance?
General Legal Rule –
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Not a loss of organic certification for the product or farm
Risks farmer takes
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Farmer has obligation to meet tolerance standard
Person seeking the premium or niche market bears burden
Contractual obligation accepted, not legal liability
D. Kershen, Don’t sign a contract promising a biotech-free crop, FOOD
TRACEABILITY REPORT p. 19-20 (Sept. 2003). See also, American
Farm Bureau Federation, What you should know about Organic and
“Non-GMO” Production Contracts.
Contractual Obligations
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“Where non-GM crop growers voluntarily choose to impose additional
or stricter requirements on their productions systems over and above
the legal minimum, in order to gain market or price advantage, then
non-GM crop growers are responsible for ensuring those requirements
are met and for meeting their associated costs, if any.” Report of the
Working Group, DAF-Ireland (Sept. 2005) at p. 119
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Depending upon the voluntarily accepted contract specifications,
adventitious presence can affect premiums and market access.
Zero tolerance as a contract standard is not achievable without a ban
on transgenic agriculture.
Civil Legal Liability
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As of December 2005
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There have been no lawsuits between farmers about adventitious
presence;
There has been one successful lawsuit (the StarLink litigation)
relating to an unapproved-for-food transgenic crop commingled
into the food supply;
There have been no successful lawsuits relating to
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Loss of premium due to adventitious presence;
Loss of organic certification;
Loss of market access;
“pure economic loss” related to ethical values, socio-economic values,
etc.; or
Product liability lawsuits related to health claims. No adverse health
claims have ever been verified.
Vermont S.18, sec. 3 (Feb. 2005)
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[sec. 650(2)] “Injury” includes:
(A) loss of any price premium
… contract … or that would
have been otherwise
reasonably available … through
ordinary commercial channels;
(B) any additional
transportation, storage,
handling, or related charges or
costs …
(C) any judgment, charge or
penalty … because of breach of
contract, including loss of
organic certification for failure to
deliver … any contractually
agreed tolerances …
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(D) market price reductions
incurred by farmers resulting
from loss of crop exports,
including foreign and domestic
markets; and
(E) a farmer’s loss of livelihood
or reputation caused by
genetically engineered crops.
[sec. 651(a)]
The manufacturer … is liable to
any person injured by the
release into Vermont of a
genetically engineered crop …”
Comment Points
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These laws are addressing liability for coexistence, not liability
for human or animal health, agronomic concerns or
environmental safety. These are economic concerns.
Common law and civil law provide remedy if a physical harm.
No loss of organic certification for product or farm. Production
standards, not product standards. Self-adopted standards.
Contractual specifications are the risk of the contracting parties.
Party seeking the price premium bears the costs of earning the
premium. Voluntarily accepted duties.
Aesthetic, ethical damages and reputation claims.
D. Kershen, Legal Liability Issues in Agricultural Biotechnology,
Research article, National AgLaw Center, Univ. ArkansasFayetteville (2002), www.nationalaglawcenter.org.
Comment Points
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Pure economic loss doctrine. Loss of contracts; loss of
markets. Incalculable and unpredictable damages.
Claims of biodiversity damages.
Lack of reciprocity and equality between agricultural production
methods.
Coexistence has three themes – farmer choice, good
stewardship, and neighborly cooperation.
Purpose of these liability proposals is:
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not compensation for sensible damages;
to use risk of liability to drive transgenic agriculture from the
market;
to privilege organic farming.
Legal Issues: Intellectual Property
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Protection of intellectual property (seed breeding)
– All crops, not just transgenic crops
 J.E.M. Ag Supply v. Pioneer Hi-Bred
– Plant variety certificates, Plant Patent Act (asexually reproduced), Utility
Patents
– Trade Secrets (hybrids) – parental lines
Saving seeds
– For own farm only for plant varieties (PVPA)
– Contractual prohibition for patented plants
– For agronomic reasons not feasible for hybrids
– Soybeans, wheat, canola (rarely)
Infringement Litigation
– As of Jan 2005, 98 lawsuits Monsanto and farmers
– Monsanto has won 73 of 73 resolved lawsuits
– Numerous other settlements; in fact, most settle quickly
Legal Issues:
Infringement of Patents
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Adventitious presence should not create legal liability for infringement under
patents.
All infringement cases, both conventional and transgenic, except two, farmers
admitted that they saved patented seeds intentionally.
– Schmeiser v. Monsanto Canada, Inc.
 In 1997 Schmeiser sprayed canola with Round-up; purposefully
harvested seed from surviving plants; purposefully segregated the
harvested seed; purposefully used the harvested, segregated seed for
the 1998 crop
 Tests on sample from Humbolt Elevator divided into three portions and
sent directly to Schmeiser, Monsanto, and an independent expert;
Schmeiser subdivided his portion and sent half to the independent
expert
– Results: S65%; M95-98%; IES 65%; IEH 95-98%
 The Canadian courts (trial, appellate, and Supreme Court) found
factually that he purposefully saved and planted patented seed that he
knew or should have know contained a patented gene for herbicide
tolerance.
Patent law will protect the truly innocent infringer.
References
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D. Kershen & A. McHughen, Adventitious Presence:
Inadvertent Commingling and Coexistence Among Farming
Methods, CAST Commentary QTA2005-1 (July 2005).
M. Hagmann, T. Hooker, Reports differ on coexistence of GM
crops, SonntagsZeitung (June 2, 2005),
http://www.sonntagszeitung.ch/dyn/news (discussion of the two
contrasting Swiss studies)
W. Weber & T. Bringezu, Test of coexistence under German
field conditions – results from the “Erprobungsanblau” 2004
with Bt-maize, Proc. 2nd Int’l Conf. on Co-Existence between
GM and non-GM based agricultural supply chains 327, 329
(Montpellier, Nov 2005)
Davide Ederle, Agricultural Biotechnologist, Italy provided the
photos of pollen flow between yellow corn and colored corn.
References
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Anon, Co-existence at 20 meters claims study, Cedab
Agrobiotechnologie (Cremona, Italy, Jan. 27, 2006) (press
release about the Ederle et al. study)
International Federation of Organic Agricultural Movements
(IFOAM), Position on Genetic Engineering and Genetically
Modified Organisms (adopted by IFOAM World Board, Canada,
May 2002), www.ifoam.com
Report of the Working Group of the Department of Agriculture
and Food, Coexistence of GM and non-GM Crops in Ireland,
Ch. 8 Economic loss, liability and redress (Sept. 2005),
www.agriculture.gov.ie.
References
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Kershen, Monsanto vs. U.S. Farmers: Commentary on the
Center for Food Safety Report, ISB News Report (April 2005)
Percy Schmeiser v Monsanto Canada, Inc.
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2001 FCT 256 (trial court);
2002 FCA 309 (intermediate appellate court);
2004 SCC 34 (Supreme Court of Canada).
Kershen, D., Of Straying Crops and Patent Rights, 43
Washburn L. J. 575 (2004).
Siebrasse, N., A Remedial Benefit-Based Approach to the
Innocent User Problem in the Patenting of Higher Life Forms,
20 Canadian Intel. Prop. Rev. 79 (2003).
Siebrasse, N., The Innocent Bystander Problem in the
Patenting of Higher Life Forms, 49 McGill L. J. 349 (2004).
Thank you.
I look forward to answering
questions about
coexistence, organic
standards, contractual
obligations, and liability.