On 3 November 2016, the European Commission (the "Commission") adopted a Notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions (the "Notice").

The Notice follows a decision from the Enlarged Board of Appeal of the European Patent Office (the "Enlarged Board") of March 2015 which held that although it follows from Directive 98/44/EC (the "Directive") that an essentially biological process for the production of a plant or animal is not patentable, a patent may nonetheless be granted for plants/plant material or animals resulting from this process. The Enlarged Board reached this decision after stating that exclusions from the general principle of patentability have to be interpreted narrowly. Article 4 of the Directive specifically excludes from the scope of patentable subject-matter "essentially biological processes for the production of plants and animal", such as crossing and selection, but leaves unaddressed the issue of patentability for products obtained from these processes.

Following this decision, the European Parliament asked the Commission in December 2015 to look into the patentability of these products.

In the Notice, the Commission diverges from the Enlarged Board's decision as it believes that the European legislator's intention when adopting the Directive was to exclude from patentability products that are obtained by essentially biological processes. The Commission emphasises that this interpretation stems from the preparatory works and from recital 32 of the Directive which states that "if an invention consists only in genetically modifying a particular plant variety, and if a new plant variety is bred, it will still be excluded from patentability even if the genetic modification is the result not of an essentially biological process but of a biotechnological process". The Commission adds that specific provisions of the Directive will only form a consistent framework if plants/animals obtained by essentially biological processes are understood as excluded from the scope of the Directive.

In addition, the Commission addresses two further issues relating to the Directive following a request from the European Parliament that an access to, and use of, material obtained from essentially biological processes for plant breeding be guaranteed.

First, the Commission calls for further analysis of the compulsory cross-licensing system under the Directive which enables a breeder who cannot acquire or exploit a plant variety right without infringing a prior patent to apply for a compulsory licence for non-exclusive use of the invention protected by the patent if the licence is necessary for the exploitation of the plant variety under protection, subject to payment of an appropriate royalty. The Commission believes that this further analysis should focus on the conditions triggering access to such cross-licensing system (i.e., Article 12(3)(b) of the Directive).

Second, the Commission examines Article 13(3) of the Directive which regulates the access to and deposit of biological material for the purpose of patent procedures. It takes the view that the wording of this provision offers balanced access to patented material of biological origin.

Although the Notice is not binding on the European Patent Office (the "EPO"), the EPO announced in a Notice of 24 November 2016 that, in view of the potential impact of the Notice, all proceedings before it relating to the patentability of a plant or animal obtained by an essentially biological process will be stayed while the concrete effects of the Notice are under discussion with the EPO members.

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