Possible consequences of remedy in Monsanto Canada Inc. v. Schmeiser.

• Author: Facundo, Mark
• Position: Canada

In 2004, the Supreme Court of Canada (S.C.C.) passed judgment on Monsanto Canada Inc. v. Schmeiser, (1) an infringement action brought about by the possession of genetically modified crops, and the result is one of the most significant cases in Canadian patent law. The judgment was based upon the facts determined at trial, where the judge found that Mr. Schmeiser, without permission or license from Monsanto Canada Inc., intentionally grew crops containing a herbicide resistant gene, the patent for which was owned by Monsanto. (2)

In a 5-4 decision that drew much criticism, the majority of the S.C.C. decided that the patenting of a gene, and indirectly, for the resulting plant, was valid, and that the cultivation of seeds containing the patented cell and gene by Mr. Schmeiser constituted an infringing use that violated the monopoly granted to Monsanto by s. 42 of the Patent Act. (3) It is in this finding of validity and infringing use that much of the controversy lies. Most critics, including the minority of the S.C.C. in this case, point out that by patenting a gene, it is, in effect, granting the patent rights to the subsequent higher life form, something which was deemed unpatentable by a previous S.C.C. case, Harvard College v. Canada (Commissioner of Patents). (4) However, this paper focuses on another aspect of the decision, that of the determined remedy to the infringement.

There are two remedial avenues, usually mutually exclusive, that a plaintiff may seek in a patent infringement application as per the Patent Act: a) an account of profits made by the defendant from the use or sale of the patented invention or (b) the payment of such damages as may have been suffered by reason of the wrongful acts of the defendant. (5) At trial, an application was made by the plaintiffs (Monsanto U.S. Inc. and Monsanto Canada Inc.) for both an accounting of profits in the amount of $105,000, calculated from the profit from the sale of the crop, as well damages in the amount of $15,450, calculated from the cost of a licensing fee under the Technology Use Agreement, that of $15/acre. In the alternative, if both awards were not possible, the plaintiffs requested simply the accounting of profits. (6) The trial judge, MacKay J., awarded only an accounting of profits, and only in the amount of $19, 832 after factoring in the cost of the labour done by Mr. Schmeiser. (7) The decision of MacKay J. was upheld in the Federal Court of Appeal. (8)

Upon reaching...