By Laurel Kilgour

Seven years ago, employees at gene-editing seed startup Inari checked boxes on new account forms at a seed registry called the American Type Culture Collection (ATCC). They were buying corn and soybean seeds created by multinational firm Corteva, and the form they used said the purchase was for “research.” These checkboxes are now a focal point in a lawsuit that could soon reshape what conditions, if any, can be imposed on the use of information—in the form of seed samples—that patentees are legally required to make public to obtain a patent.

This dispute is worth watching because if contract terms can convert registries like ATCC into infringement traps, future nascent competitors will be deprived of the benefit of the bargain built into patent law, making market entry more difficult. The seed sector, in particular, is already challenging to enter because the industry is highly concentrated—just four firms, including Corteva, collectively “hold 84% of the corn market and 79% of the soybean market” along with “95% of corn and 84% of soybean” intellectual property. This case could loosen their grip on the market—or make it even tighter.

The reason ATCC exists—and why Corteva deposited seeds there—is that patent law requires inventors to disclose their inventions fully enough to “enable” competitors to try improving upon them. Because it is challenging to fully describe a living organism in words alone, the patent office lets inventors satisfy the disclosure requirement by depositing a physical sample at an independent depository.

Corteva alleged in its complaint that Inari essentially tricked ATCC into illegally selling seeds that were supposed to have been restricted to non-commercial research uses only. Inari denied any wrongdoing, challenged the validity of the restrictions, and countered by attacking the validity of various Corteva patents and plant variety protection rights—part of a vast portfolio that Corteva plans to spin off into a separate company by the end of the year. Moreover, Inari asserted, Corteva “routinely” bought competitors’ seeds from ATCC itself.

Sequencing a plant’s DNA is the biological equivalent of reading a patent. On that much, everyone seems to agree. Applicable regulations specify that, while a patent application is pending, access is provided on par with published applications, and once a patent issues, “all restrictions” must be “irrevocably removed.” The Department of Justice (DOJ) argued in a May statement of interest that merely accessing and “reading” samples is not unauthorized use that infringes a patent, because that would upset the “quid pro quo” of the patent system. Corteva does not dispute that Inari was entitled to access and read deposited seeds.

Instead, the parties dispute whether Inari’s purchase was authorized in the first place. Corteva argues that it was not authorized because Inari secretly intended to engage in commercial use of the seeds. Inari argues that neither Corteva nor ATCC was entitled to impose restrictions on how anyone could use the seeds, given the purpose of the statutory deposit rules. In other words, the checkbox was a distraction, and it would not have mattered if it instead prompted the buyer to say they would use the samples only when Mercury was in retrograde. At best, there might be some breach of contract claim, but no patent infringement.

Although the parties already argued cross-motions for summary judgment—and a late September trial date looms—the judge asked the parties to submit additional briefs on topics including the legal theories underlying Corteva’s induced infringement claim. Not long before briefing was due, a unanimous Supreme Court tightened the standard for what counts as “active steps” toward encouraging infringement, in a case about generic drug labeling (Hikma Pharmaceuticals v. Amarin Pharma).

Invoking this new precedent, Corteva argued that Inari “filling out the order forms for the seeds, paying for the seeds, and misrepresenting that its intent was only research” counted as such active steps. Inari argued, among other things, that “entering a new account form and ordering samples of patent deposits are incident to ATCC’s functions and obligations as a patent depository” were exactly the sort of “ordinary acts incident to product distribution” that the Court said cannot support liability.

The judge also asked the parties to assume for the sake of argument that commercial use restrictions could be imposed and address: “Then what?” Would it matter if Inari lied on the form? Or told the truth but later changed its mind? Corteva responded that intent at the moment of purchase is what counts, and a jury would have to decide that at trial. Inari says intent is irrelevant, so the judge should grant summary judgment of noninfringement.

This is a sprawling case, with some extraterritorial twists and turns because Inari purchased some seeds through a Belgian affiliate. The overall resolution depends on much more than a checkbox. But the checkbox issue is one that will shape competition not only in seed markets, but in every sector that involves biological deposits.

Laurel Kilgour is Research Manager at the American Economic Liberties Project, and a former patent litigator