Agricultural law in the United States: overview
A Q&A guide to agricultural law in the United States.
The Q&A gives a high level overview of agricultural law, including acquiring agricultural companies and co-operatives, competition law, land ownership and usage rights, pricing and tender processes, tax and financing, crop seed business, importing crop seeds, commercial crop production and distribution, plant variety right protection, GM crops, GM foods, importing animals, gene patents, and product liability.
To compare answers across multiple jurisdictions, visit the Agriculture Country Q&A tool.
This Q&A is part of the Agricultural Law Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/agriculture-guide.
The World Trade Organization.
The Food and Agriculture Organization of the United Nations.
The International Plant Protection Convention.
The Office International des Epizooties, also known as the World Animal Health Organisation.
Agricultural law has a long history in the United States, and is regularly changing to address agricultural needs and revolutions in technology. This chapter has endeavoured to provide the reader with a general overview of the legislation and policies applicable to US agriculture, so the reader must conduct a thorough analysis of the law to understand how it applies to his or her specific circumstances. Further, the reader must be careful to ensure that he or she is reviewing the most recent legislation in this area, and should also note that any of the individual 50 states may have additional law on any given subject matter.
With respect to international agricultural law, the United States is party to several international agricultural organisations.
World Trade Organization (WTO)
The US joined the World Trade Organization (WTO) on 1 January 1995 (www.wto.org/english/thewto_e/countries_e/usa_e.htm).
Food and Agriculture Organization of the United Nations (FAO)
The US joined the Food and Agriculture Organization of the United Nations on October 16, 1945 (www.fao.org/legal/home/fao-members/en/).
International Plant Protection Convention (IPPC)
The US joined the International Plant Protection Convention on 18 August 1972 (www.ippc.int/en/core-activities/standards-setting/ispms/).
Office International des Epizooties (IOE)/World Animal Health Organization
The US also joined the Office of International des Epizooties, also known as the World Animal Health Organization on 18 August 1972 (www.oie.int/about-us/our-members/member-countries).
The US has considerable domestic agricultural legislation, as detailed throughout this chapter. The United States' most recent federal legislation addressing agriculture is the Agricultural Act of 2014 (Pub. L. No. 113–79) (Farm Bill), which was enacted on 7 February 2014. The Farm Bill is the US' primary legislation on agriculture and is revisited and amended every few years. Known as an "omnibus bill" because it addresses myriad topics, the 2014 Farm Bill's chapters cover:
Generally, the US government supports farm development, demonstrated by the significant legislative and financial support made available through the Farm Bill. In addition, there is large cultural support for farming, as organic, farm-to-table, and community-supported agriculture initiatives are prevalent across the country. Finally, while the US does not directly promote foreign investment in US agriculture, it is a strong proponent of investment in agriculture overseas.
Acquisition of agricultural companies
Though not specific to agriculture, the US has established a committee to review foreign investments in domestic companies (Committee on Foreign Investment in the United States (CFIUS)). Several US regulations join together to create CFIUS. These regulations are the:
Defense Production Act of 1950 (Pub. L. 81-774), as amended by the Foreign Investment.
National Security Act of 2007 (Pub. L. 110-49).
The above legislation is further enforced by the rules promulgated at 31 C.F.R. Section 800 et seq.
If a foreign investment is subject to CFIUS approval, the parties first submit a voluntary notice to CFIUS. However, CFIUS can review transactions under its jurisdiction even if no notice is submitted. Upon receipt, the Staff Chairperson confirms that the notice satisfies the regulatory notice requirements and if so, circulates the notice to the other CFIUS members triggering the start of a 30-day review period. CFIUS then reviews the transaction to identify whether it poses any national-security concerns. CFIUS can request additional information, initiate another investigation, or refer the transaction to the President in its discretion, all of which extend CFIUS' review period.
If CFIUS determines that the transaction does not pose any threats to national security, it will notify the parties that CFIUS has concluded its investigation and the parties receive a "safe harbour" for the transaction. If CFIUS determines that the transaction poses national-security risks that are not adequately addressed by other law or authority, CFIUS can elect to enter into an agreement with or impose conditions on the transaction.
In addition to the CFIUS approval, there are several statutes that require information-gathering and disclosure relating to foreign investment in domestic companies.
The International Investment and Trade in Services Survey Act of 1976 authorises the President of the United States to collect information on international investments and US foreign trade (22 U.S.C. §§ 3101 et seq). Under this law, the President is directed to conduct a survey on foreign investment every five years and issue findings from the survey for use by the general public and foreign agencies.
The Foreign Direct Investment and International Financial Data Improvements Act of 1990 directs the Bureau of the Census and the Bureau of Economic Analysis of the Department of Commerce to exchange business data obtained under the census and relevant to the International Investment and Trade in Services Survey Act (22 U.S.C. §§ 3141 et seq).
The Agricultural Foreign Investment Disclosure Act of 1978 requires a foreign person acquiring an interest in agricultural land to report the transfer or acquisition to the Secretary of Agriculture within 90 days (7 U.S.C. §§ 3501 et seq).
The Domestic and Foreign Investment Improved Disclosure Act of 1977 requires any party acquiring 5% or more in a company registered with the Securities and Exchange Commission (that is, a public company) to disclose certain identifying information to the government (Pub. L. 95-213).
Finally, foreign investments can also be subject to anti-trust laws and restrictions (see Question 5).
Co-operatives are often used in the agricultural sector because they enable farmers and others in the industry to maximise the value of their goods and services. Though not specifically regulated with respect to foreign investment, it is challenging for a foreign party to invest in a co-operative because co-operative members must provide and use the services of the co-operative, therefore a local presence is generally necessary.
Other entity types (for example, corporations and limited liability companies) are regularly used in agriculture. Foreign investors should be careful to note whether a corporation is an "s corporation" and whether a limited liability company has elected "s status" because these designations prevent ownership by a foreign person pursuant to the US tax code (26 U.S.C. § 1361(b)(1)(c)).
Finally, many US states have "anti-corporate" laws, which restrict foreign investment and/or foreign ownership of domestic businesses. Foreign investors should identify the state of formation of any business in which they are considering investing and determine whether the state observes anti-corporate statutes.
Federal anti-trust law pertains to all industries, including agriculture. In fact, there have been numerous anti-trust cases in the agricultural industry, particularly among seed companies, in recent years. Three bodies of law combine to form US anti-trust law:
The Sherman Act of 1980.
The Clayton Act of 1914.
The Federal Trade Commission Act of 1914.
When taken together, these laws prevent practices that unreasonably restrict trade, lessen competition and create monopolies.
The Sherman Act, in short, prohibits transactions and activities that lessen trade and create monopolies (26 U.S.C. §§ 1 et seq). Violations of the Sherman Act can result in severe civil and/or criminal penalties, and the Sherman Act can be enforced by the US Department of Justice.
The Clayton Act is a gap-filler in that it covers those mergers and acquisitions that lessen trade and create monopolies that are not already covered under the Sherman Act (15 U.S.C. §§ 12 et seq). The Clayton Act was amended by the Hart-Scott-Rodino Antitrust Improvements Act (Pub. L. 94-435 (1976)) to require parties engaged in covered transactions to receive approval that the covered transaction will not negatively impact US commerce pursuant to the US anti-trust laws upon filing of a pre-merger notification with the US Federal Trade Commission and Department of Justice.
The Federal Trade Commission Act prohibits unfair competition and deceptive practices, and also establishes the Federal Trade Commission (FTC) (15 U.S.C. §§ 41 et seq).
Finally, most states have individual anti-trust laws that are based on and supplement the federal anti-trust laws.
Acquisition of agricultural land
Sale and transfer of usage rights and ownership
Usage rights to agricultural land.
Ownership of agricultural land.
Usage rights to agricultural land
While most states have legislation addressing agricultural leases, federal law is slim and primarily relates to grazing. The Taylor Grazing Act of 1934 establishes grazing districts within federally owned property and grants the US Department of the Interior with authority to issue grazing permits to US citizens and companies registered in the state in which the permit is sought (43 U.S.C. §§ 315 et seq).
The Pierce Act further authorises the Department of the Interior to lease state, county, and privately-owned lands for grazing (43 C.F.R. §§ 4600 et seq). Leasing of land owned or held in trust for Indian tribes may be subject to additional regulation or oversight from the Bureau of Indian Affairs.
Ownership of agricultural land
Ownership of agricultural land is regulated by the Agricultural Foreign Investment Disclosure Act of 1978 (see Question 3).
Foreign investors in agricultural land are subject to the Agricultural Foreign Investment Disclosure Act of 1978 and state anti-corporate laws (see Questions 3 and 4). Foreign investors who are permitted to own or use agricultural land can transfer their ownership or usage rights, but these transfers would be subject to the same Agricultural Foreign Investment Disclosure Act and state anti-corporate laws.
There are no federal laws requiring tendering or prior approval for the sale of privately-owned agricultural land, meaning that private parties can freely contract for the sale of agricultural land among themselves. However, there may be reporting requirements for foreign investors of US real property (see Question 3).
The US government currently owns approximately 28% of its total land base. Property owned by the federal government is not often available for purchase by the public; however, if government property is deemed "surplus", the General Services Agency (GSA) can ultimately make it available for purchase through a competitive sale process. The process varies depending on the property involved, therefore it is recommended that interested purchasers contact the GSA for specific information. In addition, foreign purchasers would be subject to the legislation referenced in Question 3 above.
The federal government, under the Fifth Amendment to the Constitution, and state governments, under the Fourteenth Amendment to the Constitution, can take privately-owned land for public uses (U.S. Const. amends. V, XIV § 1). This right to take private property is called "eminent domain". There is no definition of "public use", but courts have upheld "public use" to include:
The construction of governmental buildings (Kohl v United States, 91 U.S. 367 (1876)).
Transportation improvements (Dohany v Rogers, 281 U.S. 362 (1930)).
Development of utilities (Mt. Vernon–Woodberry Cotton Duck Co. v Alabama Interstate Power Co., 240 U.S. 30 (1916)), open spaces like parks (Shoemaker v United States, 147 U.S. 282 (1893)), and many other purposes benefiting the public.
If a government exercises its eminent-domain powers, under the Constitution it must give the land owner "just compensation" for taking the real property (U.S. Const. amends. V, XIV § 1). Just compensation is generally the fair market value of the property, that is the amount a buyer would willingly pay a seller (United States v Miller, 317 U.S. 369, 374 (1943)).
Tax and financing
Upon the sale and transfer of land ownership, the seller can be subject to capital gains tax and/or income tax, depending on the ownership of the property. These tax rates also vary based on the individual's tax bracket and can be adjusted by the government annually. Therefore a seller should consult an accountant to determine the specific amount of tax due. Sales or transfers of real estate held by foreign parties are also subject to income tax under the Foreign Investment in Real Property Tax Act of 1980, which requires a 10% withholding that can be petitioned by the seller. Finally, the local government where the property is located can impose transfer fees.
The federal government does not have "green parks" or "agricultural development zones". The US National Parks System (NPS) does have a "Green Parks Plan", which should not be confused with "green parks". The Green Parks Plan is a strategy for operating NPS property in a sustainable manner. Although the US does not have "green parks", it does promote development of land through financing programs as described in more detail below.
In addition, the United States owns 84 million acres of land, in which there are 401 national parks (www.nps.gov/aboutus/index.htm). The NPS manages these properties. Currently, parties can donate funds to the NPS or take advantage of tax incentives available for rehabilitating historic buildings that are part of the National Parks System (www.nps.gov/tps/tax-incentives.htm), but there are no incentives for foreign investment in national parks.
Domestic financing can be obtained through the government or private parties.
One of the primary mechanisms for financing agricultural land is through the Farm Credit System (FCS), which is a financial co-operative that was established expressly for the purpose of financing agricultural investments (Federal Farm Loan Act of 1916 (Pub. L. 64-158)). In fact, about one third of all agricultural lending is conducted through the FCS (http://fca.gov/about/history/historyFCA_FCS.html ( www.practicallaw.com/3-606-6205) ). The following are eligible for FCS loans (http://www.farmcreditnetwork.com/about/who-we-serve):
To obtain an FCS loan, an eligible party must contact an FCS lender and complete the application process, which varies from lender to lender but typically requires an initial assessment of eligibility. If the applicant is eligible under the FCS program, it usually then submits financial information regarding assets, liabilities, operations, and similar data. The FCS lender reviews the application, and additional information or processes may be required depending on the lender and the applicant. If the FCS lender determines that the applicant satisfies its lending criteria, the FCS lender and applicant negotiate and execute loan agreements. Presuming the FCS lender takes an interest in the applicant's real property, the lender files a lien against the property by recording its interest with the local register of deeds. The lien secures the FCS lender's interest in the real property, thereby ensuring that the lender will be repaid if the property is sold. The lien is removed once the lender is paid in full or other agreement is made.
In the event a loan applicant fails to meet the lender's financing criteria, the applicant can apply for a Farm Service Agency (FSA) guarantee. FSA guarantees are only available to US citizens (www.fsa.usda.gov/Internet/FSA_File/guaranteed_farm_loans.pdf). To obtain an FSA guarantee, the applicant submits another application to the FSA demonstrating that the applicant meets the FSA's guarantee criteria. If approved, the FSA guarantees the loan by the FCS lender.
Another significant source of funding for agricultural purchases is through the United States Department of Agriculture's loan programme, also known as a USDA or Rural Development loan. USDA loans are available for purchases or development of agricultural land in "rural" areas, as identified by the USDA. Additional criteria may apply depending on the purpose of the loan (for example, whether the loan is for purchase of a rural home or development of a renewable resource) and the type of applicant (for example, a co-operative or an individual) (http://www.rurdev.usda.gov/RD_Loans.html). Similar to the FSA guarantee, there are also guarantees available for Rural Development loan applicants, again depending on the type of loan and applicant.
Finally, agricultural financing can be obtained through privately-owned lenders. To obtain a farm loan from a privately-owned lender, a party first submits an application that includes general financial information about the property and its operations. The bank can request additional or more detailed information, depending on the financial position of the applicant, the amount of the loan being considered, and other factors. If the applicant is approved, then the applicant and the bank negotiate and execute agreements addressing the terms and conditions of the loan.
Crop seed business
Several laws and regulations work together to regulate the crop seed industry.
The Plant Protection Act, which is a part of the overarching Agriculture Risk Protection Act of 2000 (Pub. L. 106-224), regulates the movement of plants, plant pests, noxious weeds, and other related organisms (7 U.S.C. §§ 7701-7772). The Plant Protection Act is the body of law authorising the federal government to regulate bio-engineered crops, and works in connection with the Genetically Engineered Plant Pest Regulations, which restrict the introduction of bio-engineered organisms that are, or could potentially be, plant pests (7 C.F.R. §§ 340.0-340.9). Under the Plant Protection Act, the United States Department of Agriculture is directed to regulate field testing and procedures for crops, which it performs through the Animal and Plant Health Inspection Service (APHIS).
In addition, bio-engineered plants can be considered "food additives" and thereby regulated under the Federal Food, Drug and Cosmetic Act (FFDCA) (21 U.S.C. §§ 301 et seq). The FFDCA authorises the Food and Drug Administration (FDA) to regulate food produced from bio-engineered plants.
The Plant Variety Protection Act protects breeders' rights by granting control over new sexually reproduced or tuber-propagated plant varieties (7 U.S.C. §§ 2321-2583). Under the related Plant Variety and Protection Regulations, a breeder can obtain a plant variety certificate from the Plant Variety Protection office, which gives the breeder the ability to prohibit others from selling, reproducing, exporting, importing, and developing a hybrid or different variety of the certified plant (7 C.F.R. §§ 97.1-97.900).
In contrast to the Plant Variety Protection Act, the Plant Patent Act protects breeders' rights by granting control over new plant varieties other than sexually produced and tuber-propagated plants (35 U.S.C. §§ 161-164). Under the Plant Patent Act, the breeder can obtain a patent on its plant variety, which, like a plant-variety certificate, enables the breeder to restrict others' activity with regard to the patented plant variety.
Pesticides are an inherent component of the crop seed industry, and are also regulated by the government. Chemical pesticides are governed by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. §§ 136-136y). Plant-based pesticides (in other words, pesticides contained within genetically modified plants) are regulated by the Plant Incorporated Protectant Regulations (40 C.F.R. §§ 174.1-174.705). The Environmental Protection Agency (EPA), and more particularly the Office of Pesticide Programs within the EPA, is tasked with regulating and managing the use of pesticides under FIFRA, the FFDCA, and the Food Quality Protection Act (Pub. L. 104-170 (1996)).
Import/ export control measures for plants
APHIS's Plant Protection and Quarantine (PPQ) division manages imports of plants and plant products (7 C.F.R. § 319). If a party wants to import a plant or plant product (including genetically-engineered seeds or crops) it must apply for a permit from APHIS, although certain plants and plant products may be imported without a permit. (As of the law stated date, a list of plants and plant products that can be imported without a permit was not readily available.)
If a permit is necessary, the first step in the application process is determining whether the plant or plant product has already been approved for import or is currently undergoing the approval process, which can be done by searching the public databases available on APHIS' website or contacting APHIS directly. Because the import rules vary based on the plant or plant product to be imported, database searches can be narrowed to the specific plant or plant product at question. If the plant or plant product has not already been approved or is not currently being examined, the applicant must submit a commodity import request to PPQ. After receipt of the commodity import request, APHIS performs a pest risk analysis and environmental review to determine whether the plant or plant product proposed for import is likely to introduce pests into the domestic agriculture. If the proposed plant or plant product passes the risk analysis, APHIS commences a regulatory administrative process to allow the plant or plant product to be imported and, once complete, issues an import permit. The applicant may then import the permitted plant or plant product, provided it is accompanied by a phytosanitary certificate issued by the exporting country. Imports must be made through certain points of entry into the United States known as plant inspection stations, where PPQ physically inspects the plants and plant parts to ensure they are free from pests and diseases and comply with federal regulations and permitting obligations.
PPQ issues phytosanitary certificates for plants and plant products to be exported from the United States, as well as export certificates for processed plant products. To obtain a phytosanitary or export certificate, an applicant must request an inspection and certification from PPQ in writing. An applicant must also contact an Accredited Certification Official (ACO), who will determine the phytosanitary import requirements and conduct any necessary tests on the plant or plant product to ensure it satisfies the importing country's phytosanitary requirements. The applicant must:
Co-operate with the PPQ and ACO by providing requested documentation.
Allow access to the plant or plant product proposed to be exported for purposes of inspecting and testing.
Provide labour or facilities for opening and closing packaging and administering treatments, conditioners, or other actions as required.
Once the plant or plant product has satisfied the requirements of the PPQ and ACO, PPQ will issue the necessary permit and the applicant may export the permitted plant or plant product, provided the applicant complies with export regulations administered by the Department of Commerce.
A list of commodities that may not be exported is available at www.aphis.usda.gov/wps/portal/aphis/ourfocus/importexport?1dmy&urile=wcm%3apath%3a%2Faphis_content_library%2Fsa_our_focus%2Fsa_plant_health%2Fsa_export%2Fct_ineligible.
The United States is a signatory to the International Plant Protection Convention (IPPC), and as such, implements all the international phytosanitary standards approved by the Commission on Phytosanitary Measures.
Import of new plant species or varieties and import of crop growing technologies.
Set up of R&D centres and use of test plots of new crops.
Crop seed production.
Commercial crop production.
Distribution of seeds or crops (wholesale/retail/e-commerce).
Import of new plant species or varieties and crop growing technologies
To import plant species or crop-growing technologies, an importer must obtain a permit from Animal and Plant Health Inspection Service (APHIS) (see Question 15).
Set up of R&D centres and use of test plots of new crops
Developing and testing new crops requires a permit from APHIS and/or the Environmental Protection Agency (EPA), depending on the research and development to be done and crop to be tested (see Question 15). Parties involved in biotechnology research and development can choose to work with the Biotechnology Quality Management System (BQMS), a program offered through APHIS, to ensure they are complying with applicable laws and regulations and obtaining the necessary permits when appropriate throughout their research and development of new crops.
Because the regulations and permits vary greatly depending on the crop and how it is intended to be used (for example, for import, interstate movement or field release), an overview of those regulations and permits is outside the scope of this chapter, however, detailed information can be obtained from BQMS. In addition, the Office of Compliance Assistance (which is affiliated with APHIS) aids organisations engaged in biotechnology research and development with complying with applicable regulations. There are no federal restrictions on foreign investment in research and development centres or test plots aside from those restrictions outlined in Questions 3 and 7.
Crop seed production
If the crop seed is regulated by any of the statutory schemes outlined in Question 15, APHIS and/or the EPA may need to approve or receive notice of production, depending on regulations applicable to the specific crop (see Question 15). If the crop seed is newly developed, the party must comply with the regulations and obtain the permits applicable to the specific crop seed in order to produce it, much in the same manner a party would endeavour to test new crops as outlined in Question 16. There are no further federal requirements for producing seed crops, however individual states may have their own regulations and/or programs. There are no federal restrictions on foreign investment in crop-seed production aside from those restrictions described in Questions 3 and 7.
Commercial crop production
If the commercial crop is regulated by any of the statutory schemes outlined in Question 15, APHIS and/or the EPA may need to approve or receive notice of production, depending on regulations applicable to the specific crop (see Question 15). If the commercial crop is newly developed, the party must comply with the regulations and obtain the permits applicable to the specific crop seed in order to produce it, much in the same manner a party would endeavour to test new crops as outlined in Question 16. There are no further federal requirements for producing commercial crops, however individual states may have their own regulations and/or programs. There are no federal restrictions on foreign investment in commercial-crop production aside from those restrictions described in Questions 3 and 7.
Distribution of seeds or crops
If the seed or crop is regulated by any of the statutory schemes outlined in Question 15, APHIS and/or the EPA must generally issue a permit for interstate movement of the seed or crop, depending on the specific seed/crop seed to be distributed (see Question 15). No further federal requirements apply to seed or crop distribution, although a local sales permit may be required from states where distributions are made. There are no federal restrictions on foreign investment in seed/crop distribution aside from those restrictions described in Questions 3 and 7.
The Nutrition Labeling and Education Act of 1990 (NLEA) dictates how prepared foods, including canned and frozen crops, must be labelled (Pub. L. 101–535). Raw fruits and vegetables are not subject to the NLEA's labelling requirements. According to the NLEA, labels for regulated foods must identify food type, volume, ingredients, and other information. If the food product is organic, the producer may choose to label it as such, but then must satisfy the criteria of the United States Department of Agriculture (USDA) and National Organic Program before it can label any food product as organic (NLEA, 7 C.F.R. § 205). Individual states may also have voluntary organic certification programmes.
The 2002 Farm Bill introduced country of origin labelling requirements (Pub. L. 107-171). These labelling requirements obligate sellers of perishable agricultural products, including fresh fruits and vegetables, and other products to identify the country where the product was produced.
Currently, there are no labelling requirements specifically related to genetically-engineered products or products containing genetically-engineered ingredients, although this issue has recently gained significant government attention.
While there are no express restrictions on foreign direct investment in the crop business sector, foreign investors may be subject to those restrictions described in Question 3.
Plant variety rights (PVR)
The United States joined the International Union for the Protection of New Varieties of Plants (UPOV) on 8 November 1981 (www.upov.int/export/sites/upov/members/en/pdf/pub423.pdf). It ratified the UPOV and all its amendments on 22 February 1999, except it elected to "continue to provide protection for asexually reproduced varieties by an industrial property title other than a breeder's right and [would] not, therefore, apply the terms of [the] Convention to those varieties" (www.upov.int/upovlex/en/text_notification.jsp?id=69).
Plant variety certificates are available for new, sexually reproduced or tuber-propagated plant varieties (7 U.S.C. §§ 2321-2583). To obtain a plant variety certificate, the breeder (an individual person, not an entity) must submit a detailed application to the Plant Variety Protection Office setting out:
Characteristics of the variety.
Basis for ownership.
Various other information evidencing how the variety is distinguished from other varieties.
In some cases, variety samples must also be submitted with the application. In all cases, a fee of US$4,382 is required for the application, and if the application is approved, an additional fee of US$768 is required for issuance of the certificate. There is no annual fee necessary to maintain the certificate.
In contrast to the Plant Variety Protection Act, the Plant Patent Act protects breeders' rights by granting control over new plant varieties other than sexually produced and tuber-propagated plants and prohibiting third parties from asexually reproducing, selling, or using patented plants (35 U.S.C. §§ 161-164).
Under the Plant Patent Act, the breeder can obtain a patent on its plant variety, which, like a plant-variety certificate, enables the breeder to restrict others' activity with regard to the patented plant variety. Specifically, plant patents are available and limited to new, living plant varieties which can be duplicated through asexual reproduction and includes:
To obtain a plant patent, an inventor must submit an application to the United States Patent and Trademark Office (USPTO) detailing the variety, including but not limited to the:
If an inventor wishes to protect a specific aspect of a plant (for example, a gene or genetic sequence, trait, or method of genetic engineering), he or she can apply for a utility patent through the USPTO (35 U.S.C. § 101 et seq). Like a plant patent, a utility patent grants the breeder protection against third parties' reproduction, sale or use of the patented gene, sequence, trait, or process. To obtain a utility patent, an inventor must submit an application to the USPTO very similar to a plant patent application.
Requirements for protection.
Extent of the protection.
Restrictions on the rights of the PVR holder.
Requirements for protection
To be eligible for a plant variety certificate, the variety must satisfy the following requirements (7 U.S.C. § 2402):
New. This means that the variety "has not been sold or otherwise disposed of to other persons, by or with the consent of the breeder, or the successor in interest of the breeder, for purposes of exploitation of the variety".
Distinct. This means that the variety "is clearly distinguishable from any other variety the existence of which is publicly known or a matter of common knowledge at the time of the filing of the application".
Uniform. This means that "any variations are describable, predictable, and commercially acceptable".
Stable. This means that the variety "will remain unchanged with regard to the essential and distinctive characteristics of the variety with a reasonable degree of reliability commensurate with that of varieties of the same category in which the same breeding method is employed".
Extent of the protection
The term of most plant variety certificates is 20 years from the date of issuance, and certificates for trees or vines survive 25 years (7 U.S.C. § 2483).
Restrictions on the rights of the holder
Only US nationals can obtain plant variety certificates, except where this limitation would violate a treaty to which the US is a party. This limitation also does not apply when the USPTO will grant the same protection to a foreign applicant that is afforded to a US applicant in the foreign country for the same genus and species proposed to be protected (7 U.S.C. § 2403). Since variety certificates are granted to the individual persons breeding the plant varieties, this limitation cannot otherwise be circumvented.
In addition, a breeder may lose his or her protection if the government determines that protection must be rescinded in order to protect the public supply of fibre, food or feed. In this case, the breeder is entitled to compensation for rescission of the plant protection (7 U.S.C. § 2404).
Third parties may freely use protected varieties for additional breeding or other bona fide research without infringing upon the rights of a breeder's plant variety certificate (7 U.S.C. § 2544). However, any third party wishing to sell, offer for sale, reproduce, import, export, or use a protected variety to produce a hybrid or another variety must contact the breeder for consent before conducting such activity, otherwise the third party may be deemed to have infringed upon the breeder's rights of protection granted under the certificate (7 U.S.C. § 2483).
Under applicable law, a farmer who receives a licence from, or is otherwise permitted by, a certificate holder to produce or sell the seed of a certified variety may also save the seed for replanting and sell saved seed to other farmers. This right to save seed for replanting or sale to other farmers is known as a "crop exemption" (7 U.S.C. § 2543 and Asgrow Seed Co. v Winterboer et al., 513 U.S. 179 (1995)). A farmer must generally negotiate the terms of the licence/permission to use the seed for commercial purposes directly with the certificate holder before he or she is able to take advantage of the crop exemption. A farmer who produces or sells certificated varieties without a licence or consent from the certificate holder may not be entitled to the crop exemption and may further be subject to legal action for infringing upon the rights of the certificate holder.
The remedies available to the holder of a plant variety certificate upon infringement are injunction and/or civil suit against the infringing party (7 U.S.C. §§ 2561, 2563). At this time, no other remedies are available. If it is judicially determined that a party did in fact infringe on another party's protection, the holder is entitled to actual damages caused by the infringement, interest, and costs (7 U.S.C. § 2564).
Asgrow Seed Co. v Winterboer et al. determined that, under the farmer's privilege, a farmer may only sell that seed which the farmer saved for replanting on his own farm, meaning that the amount of seed a farmer is permitted to sell under the exemption is limited to the amount of seed necessary to replant his or her own fields (513 U.S. 179 (1995)). Though the court did not specifically state whether such a farmer could save seed sufficient to replant his or her own fields several times over, it did imply that the farmer can only save enough seed to replant his or her own field for one season (513 U.S. 188–89 (1995)).
Genetically modified (GM) crops
The United States did not ratify the Cartagena Protocol on Biosafety.
The United States' policy on genetically modified crops is generally found within the Coordinated Framework for Regulation of Biotechnology (CFRB). The CFRB provides that the United States' regulatory efforts would focus on the product of genetic modification and not the process. Regulation would only be permitted with regard to verifiable scientific risks, and the regulation of genetically modified products is otherwise addressed by existing statutes (51 Fed. Reg. 23,303).
The domestic laws and related agencies governing genetic engineering are described in Question 15 above.
A party must work with Animal and Plant Health Inspection Service (APHIS) in order to produce and distribute products resulting from genetic engineering (also known as a "regulated article" under federal law) (7 C.F.R. §§ 340 et seq). Depending on the product, the party may introduce the product either upon notice to APHIS or upon receipt of an APHIS permit.
Notice is available for those products that are known and do not cause disease, infection, or toxicity, among other factors. Notice is made by sending written documentation to APHIS within 10 to 30 days of the planned release including contact information for the requesting party, scientific information necessary to identify the regulated article, information regarding origination, and location. In addition, field test reports must be submitted to APHIS. APHIS and state regulators then review the application and inspect facilities and/or test sites to determine whether the product may be introduced. Presuming the regulated article passes inspection, APHIS will acknowledge that the release is permissible within ten to 30 days after receipt of the notice submission, depending on the type of release proposed (7 C.F.R. § 340.3).
Permits are required for all regulated articles that do not qualify for introduction via notice. To obtain a permit, a party must submit two copies of the written APHIS application to APHIS, and APHIS issues its determination within 120 days of receipt of a complete application. A complete application includes:
Contact information for the applicant and all parties involved in the development of the regulated article.
Scientific information relating to the regulated article.
Information regarding the proposed purchase, movement and introduction of the regulated article.
Other similar information that allows APHIS to determine whether the regulated article is safe for introduction into the environment.
Within 30 days of submission of the application, APHIS conducts an initial review to verify it is complete. Following the initial review, APHIS contacts the applicant to either confirm that the application is complete or request additional information. Once the application is complete, APHIS submits it to the state regulator for review as well. APHIS then informs the applicant whether the application has been approved or denied. If approved, the applicant will receive an APHIS permit for introduction of the regulated article, and must comply with the general conditions of APHIS permits, such as keeping the regulated article properly labelled, as well as other conditions that may be set forth on the permit issued specifically to the applicant for the regulated article. Limited permits are also available for interstate movement and importation (7 C.F.R. § 340.4).
If a regulated article is released without notice to or a permit from APHIS, APHIS is entitled to remove, seize, quarantine, treat, destroy, or otherwise dispose of the regulated article (7 C.F.R. § 340.0). In addition, the release may be referred to Investigative and Enforcement Services, a division of APHIS, which may investigate the release and impose civil fines/penalties.
For safety regulations pertaining to genetically modified crops, see Question 15.
Through the notice and permit procedures (see Question 26), Animal and Plant Health Inspection Service (APHIS) evaluates the genetically modified crop for potential for:
Plant pest risk.
Disease and pest susceptibilities.
The expression of gene products, new enzymes, or changes to plant metabolism.
Weediness and impact on sexually compatible plants.
Agricultural or cultivation practices.
Effects on non-target organisms.
Gene transfer to other types of organisms.
If the regulated article satisfies the APHIS evaluation, APHIS will approve its release either via notice or permit, depending on the application.
Test plots of genetically modified crops are subject to the same regulations and requirements outlined in Question 26.
Approval requirements and timelines for introducing genetically modified products as food or feed are outlined in Question 26 above.
See Question 17.
A recent case at the highest level was Monsanto Co. v Geertson Seed Farms, which considered whether it was appropriate for a district court to disallow Animal and Plant Health Inspection Service's (APHIS) deregulation of Roundup Ready alfalfa and rule that APHIS could not issue a partial deregulation, and prohibit further planting of such alfalfa pending the results of an environmental impact statement. The Supreme Court held that in the specific instance, the district court abused its discretion because the plaintiff had not demonstrated it suffered irreparable injury and therefore the injunction went beyond what was necessary to correct the injury to the plaintiffs and was too extreme in that it prohibited any planting of Roundup Ready alfalfa (130 S. Ct. 2743 (2010)). Monsanto v Geertson is significant in that it is the first Supreme Court ruling addressing genetically engineered crops.
Importing animals and gene patents
Exporting live animals, animal genetic material, semen and embryos. Animal and Plant Health Inspection Service (APHIS) requires an applicant to first obtain an international health certificate from an accredited veterinarian, who certifies the herd and animal health status and conducts tests. The specific requirements of the tests and certificate vary depending on the importing country. The applicant must then have the certificate endorsed by an APHIS veterinary services area office. The importing country may also require an import certificate in addition to the endorsed health certificate required by APHIS.
Exporting animal products. APHIS requires that the exporter obtains a zoosanitary certificate. An exporter must first contact the Ministry of Animal Health in the importing country to identify the certificate requirements and acquire the necessary certificate(s). The exporter must then work with the APHIS veterinary service office in the location from which the product will be exported to ensure that the certificate requirements have been met, at which point the APHIS veterinary service office will endorse the zoosanitary certificate. Because the zoosanitary certificate only certifies the animal-health status of the region from which the product is being exported, other certificates from other agencies may be required depending on the specifications of the importing country.
Importing live animals, animal genetic material, semen and embryos.The importer must obtain a permit from APHIS. There are different import protocols depending on the species and country of export, therefore the importer should work directly with APHIS in order to determine the exact process and requirements for the proposed import.
Importing animal products. The importer must generally obtain a United States Department of Agriculture (USDA) veterinary permit. The procedure varies depending on the type of animal product and intended purpose (that is, whether the product is intended for human consumption).
Some animals and animal products do not require an APHIS permit. A list of such animals and animal products is available at www.aphis.usda.gov/wps/portal/aphis/ourfocus/animalhealth?1dmy&urile=wcm%3apath%3a%2Faphis_content_library%2Fsa_our_focus%2Fsa_animal_health%2Fsa_import_into_us%2Fsa_apply_for_permits%2Fct_animal_imports_nopermit.
Animal genes, as well as animal breeding and genetics technologies, can be protected under a utility patent much in the same manner as plant genes and plant breeding and genetics technologies (35 U.S.C. § 101 et seq). See Question 22. Examples of animal breeding and genetics technologies that may qualify for US utility patents include DNA markers for genetic improvement, transgenic and cloned animals and methods to produce them, and new methods to measure traits.
The Animal Welfare Act (AWA) is the US' primary legislation regarding the humane treatment of animals bred for commercial sale, used in research, transported commercially, or exhibited to the public (7 U.S.C. § 2132). The welfare standards are set out in detail in the Animal Welfare Act Regulations and address all issues pertaining to animal care, ranging from facilities to transportation and grouped by type of animal (9 C.F.R. §§ 1-4.11). Importantly, the AWA does not apply to farm animals used for food, breeding, or the improvement of quality or nutrition. If a business uses animals covered under the AWA, it must apply for a licence and/or registration by the USDA, depending on the type of business and use of the animal. Commercial animal dealers and exhibitors must obtain licences by completing the licence application prepared by APHIS. Research facilities and animal transporters must register with the USDA by submitting a completed registration form.
Farmers and ranchers may elect to conform to the standards promulgated by the American Humane Association. These standards are not legal obligations, but compliance with these standards promotes animal welfare and means the farmer or rancher is entitled to certify his or her products as American Humane Certified.
In addition, states may have individual statutes governing the introduction of species and breeding.
Agricultural safety and product liability
Food safety is regulated through several bodies of legislation:
The Federal Food, Drug and Cosmetic Act (FFDCA) is the predominant legislation governing food safety. It authorises the Food and Drug Administration (FDA) to oversee the safety of food, drugs and cosmetics (21 U.S.C. § 301). See Question 15 above.
The FDA Food Safety and Modernization Act of 2000 (FSMA) is the most dominant food-safety legislation since the FFDCA, and focuses regulations on preventing contamination and authorises the FDA to regulate how foods are grown, harvested and processed (Pub. L. 111-353).
There are also specific regulations for meat and poultry. The Federal Meat Inspection Act was enacted in 1906 and is intended to ensure that only healthy meat products are sold by regulating slaughter, processing and handling (21 U.S.C. §§ 601-605). Like the Federal Meat Inspection Act, the Poultry Products Inspection Act of 1957 was enacted to ensure that only healthy poultry products are sold by regulating slaughter, processing and handling (21 U.S.C. §§ 451-471).
In addition, the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) regulates pesticides and is designed to protect applicators, consumers and the environment (7 U.S.C. § 136). See Question 15.
While several federal agencies are involved in food safety, the FDA and the United States Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) are primarily responsible for enforcing the regulations. The FDA has jurisdiction over all US "food", and the FSIS has jurisdiction over products containing meat, poultry, and processed egg products.
Under the FSMA, the FDA promulgates safety standards. First, the FDA publishes a proposed standard in the Federal Register, which makes the standard available to the public and provides an opportunity to comment for a period usually ranging from 30 to 90 days. If the standard may impact international trade, it is published with the WTO as well. Next, the FDA reviews comments submitted on the proposed standard and may revise the standard based on the feedback received. The FDA then publishes the final standard in the Federal Register, and those parties subject to the final standard must come into compliance by the effective date of the standard as published in the Federal Register. Finally, the FDA may issue industry guidance relating to final standards.
It should be noted that state agencies may promulgate additional safety regulations.
If the country is a WTO member, restrictions on the import of food need be based on international standards or justified on scientific basis under the WTO Agreement on Sanitary and Phytosanitary measures. The international standards for food safety are set out in the Codex Alimentarius of the Food and Agriculture Organisation of the United Nations (FAO) (www.codexalimentarius.org/about-codex/en/).
By law, a private party may bring a civil suit against any party within a distribution chain, including producers, importers and suppliers, for tort or product liability.
To have a claim for tort, the plaintiff must prove that (Restatement Second of Torts §§ 281, 328A):
The defendant had a duty to the plaintiff.
The defendant breached this duty.
The breach of duty caused an undesirable impact on the plaintiff.
The plaintiff suffered damages as a result.
To have a claim for product liability, the plaintiff must demonstrate that the defendant is in the business of producing or supplying the defective product and the product reaches the consumer in substantially the same condition as when sold (Restatement Second of Torts, § 402A).
In addition to claims for tort or product liability, the FDA is charged with ensuring compliance with and enforcing food-safety standards. Depending on the type of violation, the FDA can:
Issue an untitled letter (notice to the manufacturer for a minor control or labelling violation).
Issue a warning letter (notice to the producer for a significant violation).
Conduct inspections, samples or recalls of the product.
Obtain an injunction against or criminally prosecute the producer.
Defences to tort claims may include:
Assumption of risk by the plaintiff.
Regulatory-compliance defences are highly contested in the US, however may be available in certain states.
Defences to product-liability claims can include:
Assumption of risk by the plaintiff.
Plaintiff's failure to follow instructions.
Plaintiff's misuse of the product.
Defences based on compliance with applicable regulations may also be available in limited states.
The type of damages available to a plaintiff in a products-liability case depends on state law. Generally compensatory damages, such as damages for physical injury to person or property, emotional distress, and other intangible harms are available, and some states may also permit punitive damages. The amount of the damages is determined by the court or jury (Restatement Second of Torts § 328C(d)). For compensatory damages, the court or jury will identify an amount intended to make the plaintiff "whole" or as close as possible to that, based on the harm or injuries sustained by the plaintiff.
For punitive damages, the court or jury will determine the amount sufficient to punish the particular defendant, taking into account factors such as the causes resulting in the harm inflicted on the plaintiff and the defendant's financial position.
There is an expansive body of law in food safety.
Mazetti v Armour & Co. is the first case establishing product liability for food for human consumption (135 P. 633 (Wash 1913)). Escola v Coca Cola Bottling Co. is also significant in the development of product-liability law because it established strict liability for products liability cases, meaning that the plaintiff need not prove the defendant was negligent in its production or handling of the product (150 P.2d 436 (1944)).
Description. The US National Parks System (NPS) operates a "Green Parks Plan", which is a strategy for operating NPS property in a sustainable manner.
Description. The Farm Credit System (FCS) is a financial co-operative that was established expressly for the purpose of financing agricultural investments.
Summary: agricultural law in the United States
Acquisition of a domestic agricultural company
National security review
Applies depending on transaction.
Foreign acquisition of agricultural land
Agricultural land ownership?
Agricultural land usage rights (maximum term)?
Allowed (no maximum term).
Mortgage/pledge of agricultural land?
Foreign investment incentives?
No (US does not have agri/green parks).
Foreign investment in crop business
Import of foreign plant varieties?
APHIS/EPA, if regulated.
Production of crop seed?
APHIS/EPA, if regulated.
Commercial crop production?
APHIS/EPA, if regulated.
Distribution of crop seeds?
APHIS/EPA, if regulated.
Plant variety right?
Patent on plant genetic sequence?
None, but must meet requirements for patent protection.
Patent on livestock genes?
None, but must meet requirements for patent protection.
Exemption breeder rights protected plant variety
R&D for scientific purpose
Prior consent breeder
Royalty payment obligation
Third parties breeding rights?
Yes, if breeding to produce hybrid/another variety.
Yes, if breeding to produce hybrid/another variety, in which case royalty terms vary.
Farmer rights to harvest protected plant varieties?
Allowed for one season replant of farmer's existing fields.
Allowed only to other farmer(s) and only in amount necessary to replant selling farmer's existing fields for one season.
Import of GM seeds?
Import of GM crops?
Testing of GM seeds?
Local production of GM seeds
Local production of GM crops?
Import of animal genetic material?
Import of new animal breeds?
Food product liability
Market-entry approval is a legal defence?
Gretchen E. Cleveland
Exact Sciences Corporation
Professional qualifications. Admitted State of Wisconsin, 2009.
Areas of practice. Corporate transactions.