Pollinating Monsanto's IP: A Trifecta (continued)

IP ManagementEngineered for Life: Fresh or Concentrate? (continued)

From a pro-GMO-labeling perspective, a review of the technical and policy issues by Craig Holdrege from 2002 covers many of the issues for advocating mandatory GMO labeling. With regard to food labels in general, the FDA states that it “regulates what’s on these labels to ensure that they are truthful.” Besides the health and safety reasons, Holdrege argues that food labels, in keeping with the truthfulness clause, have also been instituted by the FDA to provide information for consumers to make informed decisions along the lines of transparent technology marketing.


The labels also make distinctions that producers might like to hide. If you want to buy grape juice, then you know it is actually 100% juice if the label states ‘juice’. If it is labeled ‘drink’ or ‘beverage’, you know it has been diluted and may contain flavoring. Or when the ice cream label states ‘vanilla flavored’, you know that it contains an artificial substitute rather than natural vanilla.


Food labels also tell you something about the way a food has been processed. If the pasta sauce you buy has been heated (pasteurized) so that it will keep longer, it cannot be labeled ‘fresh’, since the label ‘fresh’ indicates that a food has not been processed. Similarly, when you buy orange juice, a label tells you whether the juice has been reconstituted by adding water to a concentrate. It states ‘from concentrate’ to distinguish it from fresh-squeezed juice.


Another example of processing is radiation treatment (to kill bacteria). Irradiated fruits and vegetables must carry the radura symbol on a label stating ‘treated with radiation’. The FDA has ‘found it necessary to inform the consumer that irradiated food has been processed, because irradiation, like other forms of processing, can affect the characteristics of food’. (Strangely, if an irradiated fruit or vegetable is used in a canned or packaged product, it need not be labeled, since the FDA reasons that consumers know they are buying a processed food. Evidently the FDA does not consider it important in this case to inform us about different kinds of processing.)


All these examples show a good deal of common sense. The purpose of the label is to accurately inform consumers so that they know what they are getting and can make informed choices about the food they buy. The label should embody the intent of open and truthful disclosure. Insofar as this goal is achieved, the FDA is exercising its function as a consumer protection agency.


When it comes to GMOs, the FDA relies on “substantial equivalence” to assert that GM foods are essentially the same as traditional foods. In 1992’s “Statement of Policy: Foods Derived From New Plant Varieties,” the FDA concluded:


The agency is not aware of any information showing that foods derived by these new methods differ from other foods in any meaningful or uniform way, or that, as a class, foods developed by the new techniques present any different or greater safety concern than foods developed by traditional plant breeding. For this reason, the agency does not believe that the method of development of a new plant variety is normally material information … and would not usually be required to be disclosed in labeling for the food.


As Holdrege points out, in the above formulation for GMOs, the FDA narrowly limited, somewhat capriciously, the justification for food labeling to only health and safety hazards. Thus, the FDA concluded that since GM foods are substantially equivalent to traditional foods, there is no safety issue, and therefore, no need for labeling from a technology marketing point of view. Such equivalence relies on a select set of attributes, depending on which ones are chosen, equivalence may or may not be a trivial matter to prove.


Holdrege raises many interesting points regarding the FDA’s criteria for the labeling of food additives versus processing aids. When considering the labeling requirements for antibiotic-resistance enzymes, the FDA reasoned:


FDA considers an ‘ingredient’ to be a substance used to fabricate (i.e., manufacture or produce) a food. FDA does not consider those substances that are inherent components of food to be ingredients that must be disclosed in the food label. A genetic substance introduced into a plant by breeding becomes an inherent part of the plant as well as of all foods derived from the plant. Consistent with FDA’s general approach on ingredient labeling, the agency has not treated as an ingredient a new constituent of a plant introduced by breeding, regardless of the method used to develop the new plant variety…. Accordingly, [the antibiotic-resistance enzyme is not] an ingredient that must be individually identified on the labels of foods containing them.


Contrasting this stance with that of the Europeans, David Byrne – European Commissioner for Health and Consumer Protection in 2001 – addressing the National Press Club, stated:


Let me be very frank. Unless we can give EU consumers confidence in this new technology then GM is dead in Europe. Let me assure you that this is not a scare tactic on my part. I am not prone to exaggeration…. As part of the new approval process, GM food and feed will have to be labeled as such…. Europe is perfectly entitled to impose the labeling rules proposed. Our consumers are demanding this. They are entitled to choice and full information is now a right since the Amsterdam Treaty has become part of the constitutional arrangements of the European Union…. Labels that cover all GM-derived products ensure that our consumers are able to choose a GM product or a non-GM product.


As Holdrege notes the paradox, he has this anecdotal story to add:


This logic restricts the regulation and labeling of genetically modified foods to the narrowest terms possible. The FDA is applying a very different standard than it does for other foods. I called the FDA and asked why it demands labeling of orange juice from concentrate. Surely, I said, it is not a safety issue, and just as surely the agency is not raising a question about ‘substantial equivalence’ with fresh-squeezed orange juice. The answer was, ‘no, of course not; it’s a matter of truthfulness’. A simple and clear answer (from an FDA employee who did not work on GM issues).


It remains to be seen how the California measure will fare in November, whether it will hold up to federal scrutiny and the precedential decisions cited above. However, considering the consumer impact of mandatory GMO labeling, there is a tradeoff that cannot be leveled. On the one hand, food producers opposing GM labels give the appearance that they are hiding risks, and present a facade that seems against consumer choice (even if this is not the case). On the other hand, GM labeling can stigmatize GM foods, alarming and turning away consumers, and damaging a company’s sustainable brand equity through erosion of their IP-management efforts and IP strategy.


Clearly, the stakes are very high for Monsanto. If such measures were put into force, Monsanto’s brand (which ironically is meant to be invisible to the consumer) would be in jeopardy of being seriously tarnished or even decimated in the worst case, and in the best case would perhaps only escape unscathed due to lack of consumer sensitivity to such labeling and techology marketing. Such potential market-share erosion is a lot to gamble with after having invested so heavily in costly R&D and patent-portfolio protection as part of comprehensive IP-management activities and IP strategy.


Food that is “engineered for life” to withstand the attacks of insects, pesticides, and herbicides has its noteworthy benefits. But, just as a consumer is able to select the type of orange juice to buy based on being informed through transparent technology marketing, one may ask whether the same consumer should know whether such engineering is “fresh squeezed” using traditional breeding methods, or is “from concentrate” of modern genetic-implantation techniques.





Pollinating Monsanto’s Intellectual Property: A Trifecta

In jockeying for “all the horses to win, place, and show,” the trifecta of analyses presented here emphasize how the different legal and PR wranglings have threatened Monsanto’s monopoly power and image by various attempts to “pollinate” their IP. That is to say, illegally coopting IP rights, bringing legitimate M&A transactions into question, and sanctioning mandatory labeling all serve to dilute and diffuse a company’s IP holdings, spreading the pollen to all the other flowers, so to speak.


Such a view pushes out of the starting gate the competitive-economic, business-ethics, and consumer-protection aspects involved in order to highlight the dynamic nature of IP value in the context of proactive IP management and effective IP strategy.


This is not to say that the merits of these aspects are not worthy of consideration. On the contrary, each section details important issues to be weighed in assessing the matter at hand. However, if a bee wasn’t attracted to the sweetness of the nectar, there wouldn’t be any honey, and the hive would not be sustainable.


As abstract as that may sound, one could wager that pulling on the judicial/legislative “bridle” to rein in on Monsanto’s “bit” isn’t going to win the long-term bet of leveraging strong IP-management practice for economic growth. Such resilient IP strategy relies on the tradeoffs of a reliable and predictable enforcement regime. Without such a system in place to incentivize the stakes and “saddle” the competition, the thoroughbreds of technology will be put out to pasture to swat their tails.


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