The Effects of FIFRA
on Chemical Pesticide
Development and Research
submitted by:
Matt King
submitted to:
Frank Skillern
for:
Independent Research
December 3, 1982
JCt?
TABLE OF CONTENTS
Page
List of Abbreviations
iii
Preface
iv
A.
Introduction
1
B.
History of pesticide development
8
C.
Registration under FIFRA
D.
E.
11
1.
Legislative development
11
2.
Statutory provisions
14
Effects of industry compliance
20
1.
Patent rights protection
20
2.
Trade secrets Disclosure
22
Conclusion
32
M'flfT 1
ll
LIST OF ABBREVIATIONS
CFR
Code of Federal Regulations
EPA
Environmental Protection Agency
FEPCA -
Federal Environmental Pesticide Control Act
FIFRA -
Federal Insecticide, Fungicide and Rodenticide Act
FOIA
Freedom of Information Act
IPM
Integrated Pest Management
NACA
National Agricultural Chemicals Association
PTO
Patent and Trademark Office
RPAR
Rebuttable Presumption Against Registration
USDA
United States Department of Agriculture
Preface
This research was undertaken with the hope that it
would reveal the importance of developing new pesticides
and the thwarting effect that FIFRA has on this development.
The scope of the paper includes:
an introduction of
the need for chemical pesticides, the history of pesticide
development, registration requirements under FIFRA, and the
burdens facing the chemical industry.
With chemicals playing in important role in fighting
pestilance, it is vital that the chemicals stay ahead of the
pests.
iv
00389
A.
INTRODUCTION
The former secretary of Agriculture, Charles Branman,
in a forward to the Yearbook of Agriculture1 in 1952, commented
that "[w]e dare not think of an knowledge - least of all knowledge of living things - as static, fixed or finished."
He
made this statement after noting that even though the science
of entomology had made great progress in the two decades prior
to 1952, the problems caused by insects seemed to be bigger
than ever.^
Some thirty years later, these observations still carry
meaning when viewed with the current problems facing pest control today.
1)
These problems can be summarized as the:
Worldwide concern for producing enough
food.
2)
Constant threat of pestilence resulting
in lower crop production
3)
Concern for the effects of chemical pest
control agents on humans and the
environment.3
The pressure exerted, separately and in combination, by these
concerns, constitute ample evidence to conclude that pest control problems are far from over.
1.
C. Branman Yearbook of Agriculture (1952).
2.
Id.
3
Joint Hearings before the subcommittee on Natural Resources
and Environmentof the Committee on Science and Technology
and the Subcommittee on Copse^Y-ation and Credit of the
Committee on Agriculture,fe6tf|;^8hg., 1st Sess. 524 Tjuly
25, 26, 19 79).
^ ., ,
•
Agricultural production of food and fiber is particularly
important in the U.S. both for domestic use and for export.
Since the world depends on the U.S. technology and production
for its food supply, foreign countries monitor with intense
4
interest the production levels of American farmers.
United
States production will likely continue to be important especially
since it is predicted the world demand
for food will triple
5
in the next twenty to thirty years.
on three factors.
This estimate is based
First, the population is expected to double
within that time frame.
Second, inadequate diets exist in
in many parts of the world today.
Third, the demand for food
will increase as the standard of living increases, especially
in developing countries.6
In order to meet this demand two logical alternatives are
available.
tion.
One is to increase the amount of land under produc-
The other is to increase the production of land currently
under cultivation.
The first alternative requires that more
land must be purchased or leased by an individual farmer.
The
latter requires the farmer to use the newest and best technological and management practices available.
4.
Schnittker, A Framework for Food and Agricultural Policy
for the 1980s, Farm Chemicals, May 1981, at 14-16.
5.
Holmsen, T.W., The Need for Chemicals to Alleviate Stress
in Crop Plants, 37 Down to Earth 28 (Fall 1980).
6.
Id.
2
p
'j
u»>!\;
x.
When considering an option to increase production by
increasing the amount of land cultivated, whether more land
is available becomes a crucial factor in the decision making.
It has been estimated that 3.2 billion hectares have the
potential for cultivation.
7
Currently, only 1.5 billion (or
g
45%) is now under cultivation.
The remainder includes
twenty-two percent of land that is arid or semi-arid,
and
9
would requxre irrigation to make it productive.
Considering
that irrigation accounts for about 50 percent of the energy
costs of irrigated farm land, economic constraints would
logically slow this type of production expansion.
The remaining cultivable land could be brought under production, but unless current economic conditions change, this
alternative does not seem very dependable.
Inflation, high
interest, and falling farm product prices would make this land
much more costly to bring under production, thereby decreasing
the economic feasibility.
Because of economic restraints of
the present and of the past, it is estimated that nearly all
the land suitable for cultivation is now under production.11
7.
Id.
8.
Id.
9.
Id.
10.
Id.
11.
Id.
The remaining alternative is to increase the per unit
production of land currently cultivated.
This means that
farmers must use every device at their disposal to increase
yields to a profitable level.
The use of pesticides is a
major way relied on by agriculture to increase per land unit
production.
The term 'pesticide' refers to "any substance or mixture
of substances intended for preventing, destroying, repelling
or mitigating any 'pest' and any substance or mixture of substances intended for use as a plant regulator, defoliant, or
12
desiceant."
The term "pest" generally refers to any "insect,
rodent, nematode, fungus, weed, or any other form of terrestrial
or aquatic plant„ 13
or animal life or virus, bacteria or other
micro-organism.
The availability of effective chemicals has done much to
increase the quality and quantity of agricultural commodities.
The increased yield and economic return made available by pesticides, has encouraged both farmers and the chemical industry 14
alike to use chemicals as the primary means of pest control.
12.
7 U.S.C. § 136u (1976) (as amended Pub. L. 95-396,
92 Stat. 842, 1978) .
13.
Id. at § 136(t).
14.
National Research Council Regulating Pesticides
(Washington D.C.: National Academy of Sciences, 1980).
Farmers spend more than $2.2 billion a year on chemical pest
control, which increases the value of their output by an
15
estimated $8.7 billion.
These kind of figures result making
the pesticide chemical industry a major business and concern
in the U.S.
Although chemicals are the primary pest control agent,
other methods of control have been studied and researched.
The
most common, and most vigorously advanced by environmentalists,
is biological or integrated pest management (IPM) control
programs.
These programs utilize natural beneficial insects
to control the pest harmful to the crops.
Many believe that
U.S. Agriculture can survive and prosper without the use of
pesticides.
However, in test programs throughout the country
this has never been proven entirely true.
In 1980 the
University of Arkansas concluded a study that resulted in a
finding that no economic benefits were derived from an IPM.1^
In 1979 during joint hearings before the subcommittees of
the Committee on Science and Technology and the Committee on
Agriculture, G. Ray Sawyer testified
as to the results of a
17
pilot IPM program in his area.
Mr. Sawyer, a graduate of
Texas A & M and a cotton/sorghum producer in Texas, testified
15.
Id. at p. 18.
16.
No Economic Benefits from IPM, Agrichemical Age 6 (March
(1982).
"
17.
Supra n. 3 at
that the IPM program was initiated because of the failure of
chemicals to control tobacco budworm on cotton.
However,
when spraying for midge on nearby sorghum, the insecticide
drifted on the cotton, killing the beneficial insects released
there, so the tobbaco budworm "got another cotton crop." 18
Sawyer concluded his testimony by stating:
[I] do not want you to believe that the
producers can produce the food and fiber
necessary to feed the world with beneficial insects alone. The use of chemicals is absolutely necessary. IPM has
convinced me that I can no longer spray
indiscriminately. We must know what
insect pest is causing the problem and
use the least amount of insecticide, at
the proper time, to obtain control.-'-9
Mr. Sawyer's testimony brings out two
important considera-
tions regarding the third problem facing the pest control
industry.
First, the ultimate decision as to what, if any,
checmicals shall be applied, is done at the local level by the
individual farmer.
Second, the farmer, in order to run an
efficient and profitable business, must be' aware of the effects
his decision may have beyond his specific purpose in using
the pesticide.
In 1981, more than one million U.S. farmers applied more
than 750 million pounds of chemical pesticides in an effort
to control pests.
20
The result is that over a million decisions
18.
Id. at 43.
19.
Id.
20.
U.S. Pesticide Demand to Level Off in 80's, Agrichemical
Age 82-83 (Sept. 1982).
6
r
W
J
m
i
J
^
^
H
J
are made annually concerning the application of chemical
pesticides.
The small independent decision making process has
controlled the whole development of the pest control industry.
Technology adapted itself to the independent farmer
decision making.
The idea being that the farmer could perceive
the problem and act quickly with the knowledge necessary to
eradicate the pestilance.
The producers of the chemi-
cal materials identified their market and promoted sales
toward the customer farmer.
21
In short, "[i]t is a decision
framework based on short term private economic benefits and
costs."
22
The decision process does not include the broader, long
term environmental effects, or the spillover effects to non23
target species.
It is also, unlikely, that the farmer will
consider the effects his decision will have beyond his particular farming operation.
Whatever costs and risks to the
environment that might occur are just simply not considered.
However, the risk of environmental damage may entail costs that
society is unwilling to bear.
This situation has probably been best described by Hardin
in his article "The Tragedy of the Commons." 24 Hardin describes
21-
Supra n. 3 at 530.
22.
Id.
23.
Id.
24.
162 Science 1243, 1244-45 (1968).
7
the earth as a common pasture with every man using its
resources with no regard as to its possible depletion or
destruction.
He states that "[e]ach man is locked into a
system that compels him to increase his herd without limit
25
- in a world that is limited."
suggests that in todays
Hardin, in his article
economic society there are no self-
restraints or safeguards, and that
control or intervention
26
must be instituted by society.
The result of society intervention has been the passing of
laws that regulate the development and application of chemical
pesticides.
These laws represent society's attempt to protect
users, consumers and the environment from risks of harm.
They
also represent a recognition of the fact that the marketing of
pesticides fails to include the necessary social implications.
Input of social values are not incorporated due to a lack of
knowledge by users and because there is no way to provide
incentives for the user to consider the benefits and risks.
That is because risks and benefits are not measured by the
cost of the chemical applied nor by the price of the product
produced, but by what society is willing to bear.
B.
HISTORY OF PESTICIDE DEVELOPMENT
Although chemicals have been used for pest control for
centuries, the pesticide industry and large scale pest control
25.
Id.
26.
Id.
fC^r*-*4
\j'b
8
k»-
•
i
really dates only from the end of World War II.
27
Prior to
this time pesticides consisted of simple compounds, sold by
many small, and often itinerant, dealers or were ordered through
the mail.
The fragmented market made it easy to pass adul-
terated goods, and this state of affairs was alarming to the
U.S. Department of Agriculture (U.S.D.A) and other various
farm organizations.
Under pressure from these groups, Congress
28
passed the Insecticide Act of 1910.
The Act specified the
percentages of certain ingredients and set general standards
for other chemicals.
The protection of consumers from fradulent
goods was its principal purpose and was regarded as a sufficient
response to the problem.
The period during 1910 and 1947 really represented the
beginning of the modern era of synthetic organic pesticides.
The 1930's started the era with the introduction of numerous
29
30
synthetic organic insecticides and fungicides.
In 1939,
31
Dr. Paul Muller discovered the powerful properties of DDT.
It was manufactured in 194 3 and soon became the most widely
used insecticide in the world.
In 1943, Templeman and Sexton, working for Imperical Chemical Industries in England, independently discovered the herbicidal
27.
R. Cremlyh , Pesticides (1978).
28.
29.
Ch. 191, 36 Stat. 335 (repealed June 25, 1947, ch. 125
§ 16, 61 Stat. 172).
Supra n. 23 at 5.
30.
31.
Id.
dichlorodiphenylthichoroethane
AO'OTVQ
activity of the phenooxyacetic acids. 32
include MPA,
33
2-4, D,
34
35
and 2-4-5,T.
Well known examples
All these compounds
became valuable herbicides for selective broad leaf weed control.
The organophosphorus
compounds are another class of
important organic insecticides developed during this period.
Their development stemmed from wartime research of nerve gas
37
for use in chemical warfare in Germany.
An early example
is parathion, 3 8 which is a very effective insecticide but is
39
very poisonous to mammalians.
Malathion,
parathion, was later developed.
a derivative of
It became the first example
of a wide spectrum organophosphorous insecticide that had a
very low mammalian toxicity rate and low persistence. 40
In 1947, the carbanate e sters were discovered by the Giegy
41
Company in Switzerland.
These chemicals became some of the
most important compounds discovered for pest control.
The most
32.
Supra n. 23 at 5.
33.
2 - melhyl - 4 - chloro
34.
2,4 - dichloro - phynoxyacetic acid
35.
2,4,5 - tricholoropheno oxyacetic acid
36.
Supra n. 23 at 6.
37.
Id.
38.
0, 0 - diethyl p-nitrophenylphosphorothionate
39.
Synthesized by addition of 0,O-dimelhylphosphoroclithioic
40.
Supra n. 23 at 6.
41.
Supra n. 23 at 6.
10
effective and safest member of the group, sevin, 27was introduced ten years later and continues to be one of the most
widely used pesticides today. 4 3
C.
REGISTRATION UNDER FIFRA
1.
Legislative development.
In 1947 Congress passed The Federal Insecticide, Fungicide,
44
and Rodenticide Act (FIFRA).
By this time pesticide com-
pounds ceased to be simple and Congress felt users needed advance information.
This represented the first time pesticides
had to be registered before they could be marketed.
It was
also the first time that labels had to specify the contents of
the container.
The crucial assumption underlying the 1947 FIFRA was the
misconception that:
the major problem with the use of pesticides
was their efficacy.
In other words, whether the chemical could
do the job for which it was sold.
The USDA was the police unit
of the 1947 FIFRA and administered its provisions on this assumption.
As a consequence, the bulk of the USDA's regulatory
activity was concerned with ensuring that pesticides were labeled1
accurately. 45
Thus, the Act, as administered, became just an
42.
N - methyl
43.
Supra n. 23 at 6.
44.
7 U.S.C. §§ 135-136 (1976) (as amended Pub. L. 95-396, 92 Stat. 842,
1978) .
Supra n. 14 at 21.
45.
- naphthlylcarbemate
extension of the consumer protection objectives found in the
1910 Act.
The only protection afforded non-target species
was the labeling of the chemical a "poison." 4 6 As a result,
few chemicals were barred from the market. 47
In the 1960's the efficacy assumption was challenged.
The
first challenge came from Racheal Carson in her book Silent
48
Spring.
Later, challenges came from a series of presiden-
tial commissions.
These challenges asserted that the problem
was not whether pesticides were effective but whether they were
"safe."
The argument presented was that pesticides were poten-
tially unsafe because they have unanticipated effects on nontarget species and therefore posed risks to ecosystem stability
and human health.
The effects were unanticipated because no
information was available on how the pesticides affected nontarget species.
Rachel Carson attempted to show the enomous impact that
the uncontrolled use of pesticides had, when she wrote:
For the first time in the history of the world,
every human being is now subjected to contact
with dangerous chemicals, from the moment of
conception until death. In the less than two
decades of their use, the synthetic pesticies
have been,so thoroughly distributed throughout
the animate and inanimate world that they occur
virtually everywhere . . . [w]hat sets the new
synthetic insecticides apart is their enormous
biological potency. They have immense power not
merely to poison but to enter into the most vital
processes of the body and nhange them in sinister and often deadly ways.
46.
47.
Supra n. 44 .
Supra note 14, at 21.
48.
Carson, R., Silent Spring (1962).
49.
Id. at 15, 16.
She further contended that "[t]hat we have allowed these
chemicals to be used with little or no advance investigation
of their effect on soil, water, wildlife, and man himself . . .
[i]n the words of Jean Rostrand, 'The obligation to endure
50
gives us the right to know.'"
With her book, Miss Carson was able to focus attention
upon possible ecological problems and also arouse genuine concern among many Americans.
Shortly after the book was published
agricultural chemicals and particularly insecticides and herbi51
cides came under tremendous attack from a vociferous minority.
However, the disclosure of information concerning adverse
effects of a chemical only partially solves the problem of
safety.
A more demanding solution requires that some pesticides
be banned from sale or at least have limitations placed on their
use.
But adequate, safety review, necessary to accomplish
this, was never initiated by the U.S.D.A.
was caused by two things.
The lack of review
The first was the Department's tradi-
tional position of promoting and increasing agricultural production.
The second, was the fact that the 1947 FIFRA allowed a
registrant whose chemical was challenged to obtain a protest
52
registration.
This had the effect of shifting the burden of
proving a pesticide ineffective or unsafe to the government and
allowing the challenged chemical on the market.
50.
Id. at 13.
51.
Mullison, W.R., Point of View, 4 Down to Earth 1 (1976).
52.
Supra note 44.
13
m
m
In 1964 and 1972 Congress made significant reforms to the
1947 Act, the law under which pesticides had been regulated
since the 1920's.
The year 1964 saw an elimination of the pro-
test registration and for the first time expressly directed
53
the USDA's attention to safety considerations.
In 1972 Congress passed major revisions to FIFRA.
There
was little resemblence between the 1972 amendments and earlier
law; so little in fact, that it was signed into law as
54 the
Federal Environmental Pesticide Control Act (FEPCA).
FRPCA
was significant for it set the tone for many of the changes in
registration and regulation of pesticides.
Authority for regis-
tration was transferred from USDA
55 to the newly-created Environmental Protection Agency (EPA)."
FEPCA remained the title
until Congress passed the 1978 amendments and the name reverted 5 fi
back to The Federal Insecticide, Fungicide and Rodenticide Act.
2.
Statutory provisions
The significant change brought about by the 1972 amendments
was the congressional recognition that the public generally
needed to be protected from potentially harmful effects.
This
was evident from the expanded mandate found in § 136a(C)(5)
which provides that:
53.
Pub.L. 88-305, 78 Stat. 190-193 (May 12, 1964).
54.
Pub.L. 92-516, 86 Stat. 983 (Oct. 21, 1972).
55.
Id.
56.
Pub.L. 95-396, 92 Stat. 842, (Sept. 30, 1978).
14
The Administrator shall register a pesticide
if he determines that, when considered with
any restrictions imposed under subsection (d)
of this section (C) it will perform its intended function
without unreasonable adverse effects
on the environment; and
(D) when used in accordance with widespread
and commonly recognized practice it
will not generally cause unreasonable
adverse effects on the environment.
The phrase "unreasonable adverse effects on the environment" is defined in Section 136(bb) as:
any unreasonable risk to man or the environment, taking into account the economic,
social, and environmental costs and benefits
of the use of any pesticide.58
What this meant was that the standard would become an
analysis of the benefits and risks involved in the use of pesticides.
This standard, or analysis, in turn controls the
Agencys decisions as to the acceptability of a proposed use of
a pesticide.
Legislative history seems clear that in all
stages of decision making the analysis should be a balanced
one with equal weight given to benefits and risks.
This
blance of analysis was specific in the report of the House
Committee on Agriculture, whose version became the final bill.
"As the committee labored through the months of hearings and
discussions, one central legislative philosophy developed
59
. . . the theme of the search of balance!"
57.
7 U.S.C. § 136a{c)(5) (Supp. Ill 1980).
58.
Id.
59.
U.S. Congress House 1971:5.
The conclusion that emerges from all this seems to be
that Congress recognized that some level of risk was inevitable in pesticide use, but determined that the presence of risk
alone was not sufficeint grounds for denying registration.
The provisions under FIFRA state that: "[n]o person in
any state may distribute, sell, offer for sell, hold for sale,
ship, deliver for shipment, or receive and (having so received)
deliver or offer to deliver, to any person any pesticide
60
which is not registered with the Administrator."
Procedures for registration are set forth in section 136a(C)
which basically requires each applicant to file a statement with
the Administrator.
The statement must include the name and
address of applicant that will appear on the label, the name of
the pesticide, a copy of the labeling, a statement of all claims,
and any directions for its use. 61
The applicant must also,
at the administrators request, provide a full descritpion of
the tests made upon which the claims are based.
Last the appli-
cant must include the formula 6of
2 the pesticide and the use for
which it is to be classified.
FIFRA requires that registared pesticides be properly
labeled. 6 3 The Act also sets forth the requirements for labeling
64
and what constitutes misbranding.
60.
7 U.S.C. § 136a (a) (1976), (as amended Pub.L., 95-396 , 92 Stat. 842, 197£
61.
Id. at § 136a (c).
62.
63.
64.
Id. at § 136a (c) (5) .
Id. at § 136(p).
Id. at § 136 (q).
16
Part of the registration process requires that the pesti65
cide be classified as to its use.
The uses authorized are
general use, restricted use, or both, and experimental use.
It is further required that the directions for use be clearly
stated, especially when general and restricted use classificatiosn appear on the same label.
Under the act the Administrator is required to make certain determinations before a classification is issued.
The Administrator must determine whether the pesticide,
when applied in accordance with its directions for use, warnings
and cautions and for the uses for which it is registered, or
for one or more of such uses, or in accordance with a widespread and commonly reocgnized practice will "generally cause
unreasonable adverse effects on the environment."
If he finds
it will not cause adverse effect he shall classify it as general
use.
If he finds it will, then he shall classify it as restricted
use. 6 6
Pesticides classified as restricted use, may then only
67
be applied by certified applicators
as set forth in § 136(b)
of the Act.
Another classification allowed is experimental use.
This
involves issuance of a permit that allows an applicant to determine the information needed to register a pesticide.^
65.
Id. at § 136a(d)(1)(A)(B) and (C).
66.
Id. at § 136a(d) (1) (C) (i) (ii).
67.
Id. at § 136c.
68.
Id. at § 136 (c).
C
fg\
-n
rtf*
All registrations must be cancelled by the Administrator
at the end of the five-year period which begins on the date of
its registration, unless the registrant or an interested party
69
requests a continuation of the registration.
The Administrator also has the power to suspend the pesticide.
"If the Administrator determines that action is needed
to prevent an imminent hazard during the time required for cancellation or change in classification proceedings, he may, by 70
order, suspend the registration of the pesticide immediately."
The preceding discussion of the legislative framework
describes the evolution of EPA's current mandate to protect
public health and the environment from "unreasonable adverse
effects."
The mandate is interpreted to authorize an analysis
of the risks and benefits, to be used in determining whether a
pesticide should be registered, refused registration or be cancelled.
EPA, in order to carry out its mandate, adopted the
Rebuttable Presumption Against Registration (RPAR) process in
late 1975.
The RPAR process is a key part of EPA's plan to
review the approximately 35,000 pesticide
compounds on the
71
U.S. market, as well as any new applications.
Regulations for the registration of pesticides were developed
by EPA and are set forth in the Code of Federal Regulation
(CFR), Title 40, Part 162.
69.
Id. at § 136 (d) .
70.
Id. at § 136(d)(c).
71.
Supra note 14, at 38.
The regulations establish a process
AA A
18
for identifying those pesticides that appear to cause unreasonable adverse effects on human health and the environment.
The initial step in this determination considers the risk
only.
Each pesticide chemical is measured against a set of
risk criteria, or triggers criteria set forth in the CFR.
Paraphrased, these criteria are:
1.
Acute toxicity in humans, domestic animals or
nontarget wildlife;
Chronic toxicity, determined by oncogenic effects;
mutagenic effects; any chronic effects produced
in test animals; anticipated significant populatory reduction in nontarget organisms; or anticipated fatality to endangered species; or
2.
3.
Absence of an antidote or other emergency treatment
for toxic effects in humans from a single exposure
to the pesticide.72
So, if any pesticide reaches or exceeds these risk criteria,
EPA's Office of Pesticide Programs (OPP) is obligated to issue
a RPAR.
The pesticide is then subjected to an intensive scien-
tific review and public omment process concerning its risks and
benefits.
EPA then makes its decision whether to allow its
use.
This process has become the agchemical industry's biggest
stumbling block in their pursuit to obtain registration.
The
number of compounds that can undergo this analysis is necessarily
small because of EPA's limited resources, and the RPAR process
has subseqently turned into a bottleneck in registration procedures.
Since its conception in 1975 it has been initiated less
then thirty times and completed only seven.
73
72.
Regulations for the Enforcement of FIFRA, 40 C.F.R. § 162.11
(a)(3) (1975).
73.
Supra note 14, at 29.
19
D.
PESTICIDE DEVELOPMENT AND FIFRA
1.
Time periods for research and registration
The development and subsequent registration of new pesti-
cides has been described as an "excessively complex, costly,
and time consuming process fraught with significant financial
74
risks, and often indeterminate financial gains. ii
This description, though seemingly severe, may be appropriate after examining
the procedures the chemical industry must follow in order to
market a new pesticide.
The development of a commercially viable new pesticide is
an ongoing and continual process.
It starts with a discovery
process where chemical analysis and evaluation are performed.
During this period several thousand chemical compounds are subjected to evaluation.
Evaluation is based upon a comprehensive
screening program which may last from two to four years.
This
program is directed at the discovery of chemicals that are
active as herbicides, insecticides, fungicides, nematicides,
plane growth regulators, plant nutrition aids, and animal health
products.
The process involves the use of 60 - 100 different
test organisms in order to find a viable candidate.
Once a
viable candidate is identified, patent rights are sought for
the chemistry composition.
After this, development of a data
base needed for registration and commercialization is started.
74.
Wulf, Reducing the Regulation Burden, Down to Earth,
April 1981, at 2.
20
During this stage hundreds of studies are performed in a time
75
period which may entail four to six years.
The botton line cost and time expenditure for all these
activities - from discovery to registration - may be $10 to
$15 million and eight to twelve years.
These estimates do not
include the cost of constructing a plant to manufacture the
pesticide or the cost of developing chemicals never registered.
Nor do they include maintaining service and sales personnel
that may be under utilized when registration delays are
encountered.76
The
process was presented to the Senate Committee on the
Judiciary on April 30, 1981, as a means of illustrating the
tremendous amount of time involved.
The following schedule was
presented by Nicholas L. Reding, National Agricultural Chemicals
Association (NACA) board chairman and Monsanto Co. group vicepresident :
1979:
May 1981:
Sept. 1982:
May 1982:
Feb. 1986:
Discovery of biological activity
Patent is applied for
Long-term health studies begin
Domestic patent issues
Earliest completion date of long term
studies. The two major studies, mouse
and rat, require 24 and 30 months,
respectively, to complete. At least
an additional 12 months is required for
analysis of the animals, e.g., histophathology, sectioning, review of data
by toxicologists, preparation and
auditing of report to be submitted to EPA.
June 1986: Full registration package compiled and
submitted to EPA for review.
75.
Id.
76.
Id.
June 1988: Scientic review and regulatory actions
within EPA from 12 to 24 months of
submission data; first tolerance and
approved label allowing commercial
sales
Spring 1989: First sale of product approved too
late for seasonal use."7'
He stressed, however, this time frame is applicable "if
everything goes right and there are no unforseen delays." 7 8
2.
Patent protection
The pesticide industry is big business in the U.S.
Just
as experiments are being conducted in the laboratory, business
decisions are being cranked out in board rooms.
Even if pes-
ticides are developed, decisions must be made as to their
marketability with total sales of pesticides amounting to
billions of dollars a year, competition is stiff and the stakes
79
high.
Management must decide if the chemical just developed will
be marketable 12 to 15 years later, they must project costs of
marketing and the time period needed to recoup their investment.
The time period involved is cruicial, for in the U.S.,
every patent granted is in effect for just 17 years.
Seventeen
years may sound like a fair period, and it was for a long time
after Congress adopted that time frame.
The mechanics of
patent protection have changed but little since the Patent and
77.
Improving Patent Protection, Farm Chemical, September 1981,
at 81.
78.
Id.
79.
Gannon, FIFRA and the Taking of Trade Secrets, 8 B.C. Env.
Aff. 593 (1980) .
c c - m
22
80
Trademark Office (PTO) designed them in 1836.
But as it has
been pointed out, seventeen years is not very long when compared to the amount of time needed to register a new pesticide.
Under the FIFRA regulations today, it may take up to 7 years
to receive the right to market a new ag chemical.
Since the
inventor secures the patent before or during registration, the
subsequent time needed to satisfy labeling requirements encroaches directly on the life of the patent.
This means that
the actual time the company receives patent protection is just
ten to twelve years.
Which is very little time to recoup the
$20 - 25 million spent on developing and introducing the new
product.
"That loss of time on the patent has become a stronc
disincentive to companies to 81
continue research and development
programs for new chemicals."
There could have been some change, however, that would have
a positive effect on the future of research and development.
In January 1981, Senator Charles Mathias (R-MD), proposed to
the 97th Congressional Senate, Senate Bill 255, "The Patent
Term Restoration Act of 1981." 8 2
In his formal report, Mathias stated,
"A new pesticide must be approved as not
causing unreasonable risk to man or the
environment under the Federal Insecticide
Act before it can be sold commercially.
80.
35 U.S.C. § 151 - 154 (1977).
81.
Supra note 77.
82.
S. 255, 97th Cong., 1st Sess. §
(1981).
23
(JlP'il!'**
'Since the inventor usually secures the
patent on these products before or during
the regulatory review period, the subsequent time needed to fulfill the regulatory
requirements encroaches directly on the
life of the patent. S. 255 would remedy
this unintended and inequitable side effect
by restoring to the term of the patent the
time lost in complying with the government's
premarket testing and review requirements,
up to a maximum of seven years.
'S. 255, by putting inventors of products
subject to federal regulatory review on an
equal footing with all other patent holders,
will help reverse these trends and restrore
badly needed research incentives in indusg^
tries that have suffered from this disparity.'
S.255 was approved by the committee on May 19, 1981 and by the
Senate on July 9.
It was referred to the H. Committee on the
Judiciary on July 13, where it was approved and sent to the
House on July 22, 1981.
The bill failed to get House approval
and, to date, has not been reintroduced.
3.
Trade Secrets Disclosure.
Although extended patent rights would restore some incen-
tive for research, by granting exclusive use to the company,
much of the business and technical know-how does not qualify
for patent protection.
Customer lists, marketing information,
process nuances, testing data and a wide variety of other
proprietary knowledge get no protection from the U.S. PTO or
any other similar arm of government.
"Companies must keep such
84
assets in the dark to make the best use of them."
83.
84.
Id.
Gale, Holding on to Those Chemical Trade Secrets, Chemical
Marketing Reptr., June 1, 1981, at 19.
24
bkr'M...
"f-
Under the Act the Environmental Protection Agency makes
decisions proscribing the sale of pesticides, which may endanger
85
the public, based on a risk - benefit analysis.
The Agency
relies on the manufacturer for the testing data upon which it
makes it analysis.
The manufacturer is required to make nume-
rous comprehensive studies concerning the probable effects the
checmical has upon humans and the environment.^
Moreover, if
at anytime after registration, the EPA has reason to believe
that the studies available do not adequately support the prior
regulatory approval, it may require additional "defensive"
87
data.
The controversy is whether, and to what extent, such
data should be publicly disclosed.
Confidential and proprietary information and its disclosure
is usually controlled by two federal acts: The Freedom of
88
89
Information (FOIA)
and The Trade Secrets Act (TSA).
The
FOIA
requires each federal agency to make certain information
available to the public.
Under its provisions each agency,
upon any request for records which (a) reasonably describes
such records and (b) is made in accordance with published
90
rules . . . shall make the records available to any person."
85.
7 U.S.C. § 136d (1977).
86.
Id. at § 136a(c)(2)(A).
87.
Id. at § 136a (c) (2) (B) .
88.
5 U.S.C. § 552.
89.
5 U.S.C. § 1905.
90.
5 U.S.C. § 552 (a) (3) .
25
The identity of the requester and the motivation underlying
his request are irrelevant.
The only restriction is if the
information falls under one of nine exemptions.
Seemingly,
registration data would fall under exemption four or matters
that are "trade secrets and commercial or financial information
91
obtained from a person and privileged and confidential."
The Trade Secrets Act establishes criminal penalties for disclosure of proprietary
92 information unless disclosure is
"authorized by law."
Although trade secrets and proprietary information seems
to be well protected, problems develop as to what constitutes
trade secrets and proprietary information.
Exemption four of
the FOIA covers trade secrets, but "trade secrets" is not
defined in the FOIA. So the definition most likely to be used93
is the definition employed in the Restatement of Torst § 757,
it has been employed frequently in other contexts. 94
The
Restatement definition of Trade Secrets is as follows.
A trade secret may consist of any formula,
pattern, devise or compilation of information which is used in one's business, and
which gives him an opportunity to obtain
an advantage over competitors who do not
know or use it . . . . It differs from
other secret information in a business in
that it is not simply information as to
single or ephemeral events in the conduct
91.
Id. at § 552(b).
92.
5 U.S.C. § 1905 ( ) .
93.
94.
Restatement of Torts, § 757, comment (b) (1939).
Aronsen v. Quick Point Pencil Co., 440 U.S. 257, 266 (1979);
United States v. Int'l Business Mach. Corp., 67 F.R.D. 40,
46 n.9 (S.D.N.Y. 1975) .
26
utr*. -/J
of a business, as, for example, the amount
or other terms of a secret bid for a contract
. . . . A trade secret is a proeess or device
for continuous use in the operation of the
,
•
95
business.
Even under the broad Restatement definition, strict application
can still result in the disqualification of highly confidential
information as a trade secret.
Information relating to revenue,
sales, and manufacturing which was deemed highly confidential,
was denied trade secret status where the information was not
current and although distributed only to key personnel, was 96
not
actively protected against distribution to other employees.
Although controversy had raged over the issue since the
passing of the FOIA in 1966, it is now settled
that FOIA
97
exemptions are permissive, not mandatory.
Therefore, although
the FOIA requires agencies to disclose nonexempt records,
agencies may, in their discretion, also disclose exempt records,
so long as they do
9 8not abuse their discretion or violate another
provision of law.
Agency discretion is further extended under the FIFRA,
because as amended it specifically exempts health and safety
studies from the protections otherwise afforded to proprietary
95.
Supra n. 93.
96.
United States v. Int'1 Business Mach. Corp, supra n. 94,
at 47 - 49.
97.
Chrysler Corp. v. Brown, 441 U.S. 281 (1979).
98.
McCarthy and Kornmeir, Maintaining the Confidentiality of
Confidential Business Information Submitted to the
Federal Government, 36 Bus. Law 57, 58 (1980).
27 0 ^ 1 * 0
99
information.
Under the provisions of the FIFRA the Admini-
strator may disclose proprietary information if he determines
that "disclosure is necessary to protect against an unreasonable
risk of injury to health or the environment." 1 ^
This type
of provision falls squarely within the "except as otherwise
provided by law" proviso of the TSA. 1 0 1 It also meets the
judicial requirements set forth in Chrysler. 102
There has been much discussion about the advantages and
disadvantages of disclosure.
Some reasons advanced in favor
of disclosure include:
1)
2)
3)
4)
99.
agency effectiveness — EPA should have sufficient information to get other scientists
opinions.
independent consumer judgment — members of
society have a legitimate interest in
knowing the full health effects of products
approved by EPA.
unnecessary duplicative testing -- conserve
time and money on analyzing the same
chemicals.
hampering innovation — suppressing scientific
data prevents research 1based
on full know0o
iUJ
ledge of product area.
7 U.S.C. § 136h(d)(1) (1977).
100. Id.
101. Supra n. 89.
102. Chrysler, 441 U.S. 281.
103. McGarity and Shapiro, The Trade Secret Status of Health
and Safety Testing Information, 93 Harv. L. Rev. 837,
839 - 837 (1980).
28
Policies advanced against disclosure include:
1)
research incentives - slow current pace of
discovery, the reduction of benefits of
innovation discourages incentives to
research.
2)
Agency over regulation - EPA should be required
to more accurately describe data and information required, and should conduct "generic
chemical tests" instead of requiring "exact
chemical f ormulas . "
However, the FIFRA does provide some protection for
research and development.
Under the 1978 FIFRA amendments, a complex scheme permits
later registrants and the public to use the data of initial
registrants.
First, later registrants may use data submitted
prior to 1970, without compensation.
Second, data submitted
after January 1, 1970 in support of pesticides contained ingredients regisrered prior to the effective date of the 1978 amendments may be used without compensation only after fifteen years
from the date that the data are submitted.
For use before that
time, compensation must be paid as agreed to between the parties.
Third, data submitted to support pesticides containing active
ingredients that are initially registered after 1978 may be
used only after the original registration has been in existence
for 10 years, regardless of whether compensation of offered.
After the ten years of exclusive use, the later registrant must
compensate the data producer for fifteen years from the submission
of the data in accordance with sentence number (2) above.
104. Id. at 847, 848.
105. Id. at 875.
R
Data compensation and disclosure has not been a very
popular concept among the chemical industry.
The companies
who generate data believe that it belongs to them, and that
they should not be forced to make this proprietary information
available even for a fee.
They also believe that proprietary
data belongs to the innovating company forever and should not
be forced to share it.
Several chemical companies carried this reasoning into the
courts with suits against EPA for what they considered a "taking"
of trade secret data.
Their argument presented two constitu-
tional issues or questions.
The Constitutional questions
raised were 1) whether health and safety data submitted to the
government pursuant to licensing is "property" within the meaning
of the taking clause, and 2) whether governmental publication
of data constitutes a taking. 10 ^
These issues may have been resolved in two recent cases
however.
107
In Chevron Chemical v. Costle,
Chevron Chemical company
sought to have EPA treat test data, submitted pursuant to registration, as trade secrets.
Chevron was hoping to have such
data declared trade secrets and thus any disclosure would be an
unconstitutional taking and subject to compensation.
The court
rejected this appeal and found no Chevron property right in
EPA files containing test data submitted for registration purposes.
106. Id. at 864.
107. 16 ERC 2004 (1981) .
30
The Court reasoned that Congress may condition the property
right held by submitters to EPA, in order to accommodate EPA
practice, since Congress conferred the property right to which
chemical companies had no prior claim.
108
In Mobay Chemical v. Costle,
a taking was again turned down.
a plea for a finding of
The Court in Mobay found that
FIFRA did not deprive chemical manufacturers of due process
or equal protection because no taking of property interests
occurred.
Mobay, in its suit, also attacked EPA's regulations
implementing the 1978 amendments of the FIFRA, particularly
EPA's use of data previously submitted.
The court found that
EPA's regulations which allow registration of pesticides conditional on submission of more information, and which require an
applicant to use all data submitted by others, are within
109
EPA's authority under the FIFRA.
With the amendments of 1978,Congress attempted to strike
a balance between the public interest of data disclosure and
the interest to have exclusive use of chemical data.
But the
procedures seem far from adequate, as noted by District Judge
McCune in the Mobay decision:
Both interests have long sought an accommodation, but the result achieved thus far has
left Mobay, and we suspect many other developers,
exasperated and frustrated . . . Mobay*s complaints are understandable. Certainly a
better accommodation can be devised by the
human mind, and it must be, if the industry
is to succeed in developing the sophisticated
pesticide which will be required in the years
to come.l-'-O
108. 16 ERC 1273 (1981) .
109. Id.
110. Id. at 1273.
31
i j i
)
b
A
'
A
4
CONCLUSION
The development of pesticides has changed dramatically
in the last century.
Starting from World War II biological
warfare research, the use of chemicals to control pests has
become essential to the production of food throughout the
world.
The use of pesticides has also changed dramatically.
Application of pesticide chemicals has gone from broad spectrum use to narrow specific target use.
Many of these changes in the pesticide industry can be
attributed to the Federal Insecticide Fungicide and Rodenticide
Act.
A concern about the effects of widespread pesticide use
on public health and ecological conditions, prompted Congress
to legislate the regulation of pesticides through FIFRA.
The
testing and labeling requirements under FIFRA are extremely
important and needed to ensure ecological and public welfare.
But there is considerations that have to be addressed.
The forecasted need to more than double the world's present food
production over the next several decades.
The limited avail-
ability of suitable agricultural land and the projected increased
need for food clearly dictates the need for improvement in
agricultural technolgoy.
During the last two to three decades
remarkable progress has been made with pesticides.
This progress
has been uniquely responsible for tremendous yield increases
and sometimes the saving
areas.
from destruction of many major crop
But there is much to be done and pesticide development
must keep pace with new and bigger demands on food production.
This means that Administrative Agencies and Congress need
to acknowledge the increased costs and administrative demands
put on the chemical industry in developing new chemicals for
pesticides.
Inflation and the costs of doing business has hit every
segment of American industry and the Ag Chemical industry is
no exception.
The price of developing and marketing new pesti-
cides has sky rocketed forcing the price the farmer pays higher
and higher.
however.
The problems do not start and end with inflation
Present Administrative review procedures help fuel
the fire of inflation that appears to be burning out of control
and threatens to consume the montetary initiative vital to
development and research.
Industry proposals include increasing the exclusive use of
data to fifteen years for a new active ingredient and elimination of compensation on any products registered after September
1978.The
have also proposed a new program for sharing the
112
costs of producing defensive data.
The industry has also
made recommendations regarding the confidentiality of data.
They have proposed that EPA establish a central reading room
at its Washington, D.C. office.
Then health and safety data
could be reviewed, but not copied or removed,
by members of the
113
public except other pesticide manufacturers.
111. Our Data Must Be Protected, Farm Chemicals, September, 1981,
at 86.
112. Id. at 89.
113. Id. at 90.
f % f k
0
O
M
Iv'./'jt'
Congressional and Administrative acknowledgement of the
burdens placed upon pesticide research is essential.
And
this acknowledgement needs to manifest itself in legislation
and administrative actions such as patent protection and
trade secret protection, to help alleviate some of the problems
facing the agricultural chemical industry.
The industry
recognizes the need for public access but as the Chairman of
the National Agricultural Chemicals Association, Nick Reding,
noted, "the amendments to FIFRA passed in 1978 make these data
so freely available we have no protection from competitive
encroachment by disclosure of our data to domestic or foreign
producers .
...
Without adequate data safeguards, ag
chemical companies would be ill advised to invest enormous
114
sums in research that could be subject to piracy."
114. Id. at 90.