Little, Yellow ... Different?

A tiny bean--and its patent--become ammunition for a Nafta border skirmish.

LATIN AMERICA'S FARMERS HAVE LONG COMPLAINED ABOUT buying seeds developed from genetic materials their own universities turned over to U.S. firms in the 1970s. Agriculture is 10% of the region's gross domestic product (GDP), worth some US$200 billion, so seeds mean big money.

Now farmers in northern Mexico, the Mexican government and intellectual property experts alike are up in arms over a U.S. resident who has successfully patented a small yellow bean--as well as its seeds and any plant grown from it--that they claim belongs to Mexico. Some records indicate the bean's use in Mexico dates back at least two decades; others records show similar beans in printed documents dating to the 1930s.

If the patent stands, bean growers on both sides of the border will owe Larry Proctor, the patent holder, six cents a pound for beans the Mexicans say they've grown and eaten for years. Lawsuits have been filed and a patent challenge is under way from the World Bank-backed International Center for Tropical Agriculture, which is charged with combating famine by collecting and improving varieties of the world's basic foods.

"What Mr. Proctor has done is plagiarism of the product of years of research in Mexican experimental fields," charges Rodolfo Soto, of the Rio Fuerte Growers Association in Los Mochis, Sinaloa, in northern Mexico.

Proctor sued U.S. importers Tutuli Produce in October 1999 for infringement and royalties on yellow beans imported from Sinaloa. In 15 patent claims, Proctor says he complied with patenting requirements by creating a "new, useful and non-obvious" product, producing a field bean variety with a yellow seed coat that falls within defined points of a color card similar to that used by interior decorators.

Mexican growers say the true identity of the bean Proctor patented as the enola is their mayocoba, a variety released in 1978. A counter-suit by Tutuli argues that the patent is invalid and unenforceable, says Jill Pietrini, of the Los Angeles, California, law office of Manatt, Phelps and Phillips. The firm was retained by Tutuli, which is working closely with Mexican agriculture authorities and growers.

Tutuli Produce began importing peruano and mayocoba beans from Mexico in 1994, according to Tutuli President Rebecca Gilliland, who bristles at the mention of Proctor's company, Pod-ners LLC. "I worked hard to open a market. These people saw a variety of beans gaining a market and jumped on she contends.

Roadblocks. Gilliland says that in the first year of the patent she watched her growing bean market dry up. "First they started notifying my customers that it was against the law to buy beans from Tutuli Produce," she says. "Then customs began to stop every load to sample it, to find a single bean that fits the description of the patent." The inspections, according to Gilliland, cost her company $300 a load and added unpredictable delays.

Now, worse still, she can't get any beans. Thanks to the patent, as well as weather and other factors, yellow bean production in Sinaloa fell to 96,000 tons in the 2000-2001 season from 250,000 tons in 1998-99. Export levels of nearly all yellow beans in 1999 fell from close to 4,000 tons to negligible amounts for the 2001 harvest. For the 2000-2001 season, acreage sown in yellow beans in Sinaloa declined by 76%. The entire production was sold on the domestic market.

While climate and crop choices factored into the decision, local bean grower Ramon Osuna says many farmers shifted to other crops or sold their crop regionally instead of exporting because of the patent. "I didn't export in 2000 because I don't want six cents a pound to go to Pod-ners. I want to earn that as the producer," Osuna says.

Tutuli's countersuit seeks punitive damages from Pod-ners, citing "trade libel and intentional interference with contractual relationships and prospective economic relations." Mexico's Agriculture Ministry has offered consulting services, declaring the defense of the mayocoba a matter of "national interest."

Ricardo Hernandez, director of foreign trade for the ag ministry, says the bean flap is about money, plain and simple. "The basis of this is commercial, not scientific. I think Pod-ner's interests were not based on patenting a seed but in conquering a market that we had already made," he says.

Proctor admits his goal has always been to control the market. "What I've done here is develop a bean for the United States and put into place a system for monitoring production and consumption so we don't produce more than we need," Proctor says. All enola beans sold in the United States must be permitted by International Bean Marketing an affiliate of Pod-ners. A former bean farmer forced out, as he puts it, "by economics," Podner argues that U.S. growers like himself are getting killed by overproduction. When a crop looks good everyone jumps on the bandwagon and prices plummet. The solution, in his view, is to control yellow bean production.

Podner says that if Mexico tries to defeat Pod-ners, soon not just a few states but many farmers in a variety of U.S. states will grow tons of yellow beans, destroying the market in the United States and damaging the Mexican market, too. "I've been trying not to do that," Procter says. "All I want to do is reach a production and consumption balance in the United States."

Generations. What Proctor did to win his patent protection is spelled out in his own patent, No. 5894079. "Enola" comes from his wife Polly's middie name. In 1994, the patent says, field beans that were yellow in color were discovered in a package of dry edible beans purchased in Mexico and brought to the United States. They were mixed in the bag with various other type of beans, Proctor claims. 3 Proctor planted the beans in Montrose Country, Colorado, and allowed them to self-pollinate--that is, fertilize themselves. Some of the beans grew poorly but some thrived and were allowed to breed again. By 1996, Proctor describes a plant with far superior characteristics, including a smooth rather than gritty texture. These beans also cook twice as fast in water as other field beans, the patent claims.

Proctor's patent calls the bean an "invention" deserving protection. The patent also sweepingly claims rights on any beans derived from future crossings of enolas, including hybrids devised from enolas and other beans.

Trade war? On Dec. 20, 2000, the International Center for Tropical Agriculture (CIAT) successfully sought a re-examination of the enola patent. CIAT claims the patent violates a 1994 U,N. agreement specifying that plant varieties held "in trust" cannot be protected. As one of 16 worldwide centers charged with collecting and improving varieties of basic foods, CIAT must assure that their materials remain in the public domain. CIAT holds 260 varieties of yellow bean, including six that appear to be covered under Proctor's claim.

The re-examination request cites extensive evidence of the prior existence of yellow beans with traits identical to the enola patent, and it accuses Proctor or bringing the beans into the country illegally. It also attacks the patent for the breadth of its claim, saying "it will make a mockery of the patent system to allow statutory protection of a color."

The case is scheduled to be heard before the U.S. District Court of Central California on Jan. 25,2002 and the conclusions of the patent re-examination should be released a few months after.

Meanwhile, both sides are upping the ante. The Mexican government has sworn "to do everything necessary" to revert the patent, including presenting the case before a Nafta panel. For his part, Proctor warns that if his patent is reversed he'll flood the Mexican market with beans, depressing an already-weak bean price. "I would have no choice but to sell all the seed I have and, by next October, there would be about 400,000 bags of beans sitting on the border ready to go into Mexico," says Procter. "There's been a lot of talking and attorneys ... But I've decided what I would do. Dump 'em and walk away."