A RESULT in high level legal proceedings aimed at halting a United States bid to patent established cattle genetic selection techniques is expected in Melbourne tomorrow.
Meat and Livestock Australia (MLA), on behalf of producer levy payers, launched an appeal in the Federal Court of Australia two years ago against a decision by the Australian Patent Office (APO) to grant the patent to meat giant Cargill and United States company Branhaven LLC.
Lawyers for Branhaven, KL Gates in Sydney, said they were expecting the Federal Court to hand down its finding tomorrow.
Beef producer and science leaders say the patent means fees will be payable for the application of more than half the DNA-associated genetic tests used in Australia’s beef and dairy industries.
Cargill Australia has distanced itself from attempts to uphold the patent.
Branhaven acquired its interest in the patent following the bankruptcy of Cargill’s previous partner Metamorphix, according to Cargill Australia.
Fairfax Media has not been able to contact, or identify information on, Branhaven.
Companies “not in the game” taking ownership of patents with the view to extracting profit from an industry using the corresponding technology was not unusual, patent law experts said.
Lloyd Thomson, from the University of New England’s Faculty of Science, Agriculture, Business and Law, said the more common arrangement with patents was a company in a particular industry patenting an invention in order to sell its products.
Mr Thomson, who has a Master of Intellectual Property (IP), is the faculty’s commercialisation and industry adoption manager. He quoted Rob McInnes, one of Australia’s leading IP lawyers, saying the golden rule was “if you can’t protect it, you can’t commercialise it”.
“Essentially, most organisations who own patents are in the business relating to those patents - the likes of Apple and Samsung,” he said.
“Then we have a class of patent owners who extract value from their patent portfolio – non-practicing entities (NPE).
“The business model is to acquire patents, target a weak industry participant who is using the technology and demand a licence. The NPE then works its way through the industry to obtain more licences.
“The interesting thing with licensing is it can be split narrowly - by territory, by field. A lot of different people can be paying a slice, which adds up to a substantial revenue stream.
“This behaviour happens in many industries, not just agriculture.”
Theoretically, if Branhaven survives the appeal, it might target anywhere in the world a healthy and progressive cattle industry operated.
NPEs, sometimes called “patent trolls” by their opponents, typically seek to quickly exploit a patent portfolio after acquisition, which may be achieved by buying the patents or the company that owns them.
“Keep in mind, at any point in time, patents can become invalid through a court challenge and an owner is paying registration fees every year to keep it,” Mr Thomson said.
“That tends to force a company to do something with the patent, or abandon it.”