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On August 17, 2009, China's Ministry of Agriculture (MOA) issued biosafety certificates for commercial production of two genetically modified (GM) rice varieties—Bt Shanyou 63 and Huahui 1—to the Huazhong Agricultural University. The certificates are valid from August 2009 to August 2014, during which time, the two GM rice varieties are allowed to grow on farmland in central China's Hubei province.1 For a while, China, the world's largest rice producer and consumer, was expected to become the first country to produce GM rice, a major staple food crop, which would likely positively impact global acceptance and accelerate the adoption of biotechnology food crops (James, 2009). Although the GM rice varieties still need to undergo the administrative test on value for cultivation and use (VCU), as well as pass crop variety registration (which usually takes 2 to 3 years), the landmark decision in China's regulation of the commercialization of GM crops immediately spurred public debate. In fact, the commercialization of GM rice has become the subject of controversy. In addition to the caution over the possible adverse impacts of GM varieties on the health of human beings and the environment, there have been concerns about the ownership of the intellectual property (IP) on the GM rice developed in Chinese laboratories (Zhou et al., 2008). The question—who owns the intellectual property rights (IPRs) of the Chinese GM rice—is still lingering in China.  The concerns about the IPRs of the Chinese GM rice were first raised by Greenpeace, the international environmental protection non-governmental organization (NGO), which largely opposes biotechnology activities. Around the time the biosafety certificates were granted to the GM rice varieties of Bt Shanyou 63 and Huahui 1, Greenpeace issued two major reports, claiming that the Chinese-developed GM rice may fall into the “foreign patent trap,” as these rice varieties may have used patents owned by foreign entities. In particular, in the first report, Greenpeace declared that at least 11 to 12 patented or proprietary methods and materials associated with three varieties of Chinese GM rice may belong to major international agribusiness companies (Greenpeace and TWN, 2008). In a follow-up report, Greenpeace concluded that another five Chinese GM rice varieties under development may have used at least 10 foreign patents (Greenpeace and TWN, 2009). Both reports implied that the Chinese GM rice would fall within the scope of foreign patent protection. Furthermore, Greenpeace argued that commercialization of GM rice in China would represent a threat to China's food security, sovereignty, food prices, and small-holding farmers' livelihood. Once exported, according to Greenpeace, these GM rice varieties would be subject to international IP laws, thus exposing China's rice-growing farms and the entire rice industry, including the rice seed and hybrid rice seed industries, to the control of foreign patents. Moreover, the foreign patent holders could demand royalties and compensation from China, and the big GM seed companies would stand to take the most benefits, while Chinese farmers would lose because they could not go back to conventional, non-GM seeds (Jia, 2010). The Greenpeace reports mentioned further hidden risks associated with undisclosed biological material transfer agreements that Chinese GM rice developers may have signed with foreign IPR holders. The GM rice under the Greenpeace's scrutiny includes the Bt varieties for which the Chinese government authorized commercialization.  The Chinese government and Chinese researchers involved in the development of GM rice have not only disputed Greenpeace's conclusions, but also repeatedly claimed that the Chinese GM rice varieties have been developed using China's own materials and technology, so as to allow domestic ownership of IPRs. For example, on July 9, 2010, the Office of Agricultural Genetic Engineering Biosafety Administration (OAGEBA), an organization affiliated with China's MOA, declared on the MOA website that both Bt Shanyou 63 and Huahui 1 had been developed with indigenous Chinese techniques and would not infringe any in-force patents filed in China.2 This official position was reaffirmed by a report issued by the State Intellectual Property Office (SIPO), China's patent office. The SIPO report specifically mentioned that it had granted the inventors of the Huahui 1 a patent entitled “The breeding methods of GM rice” (Patent No: ZL200510062980.9).3 In the meantime, some Chinese legal scholars have discounted the possibility that a significant risk of lawsuits may exist during the commercialization of Chinese GM rice on the ground that China has been trying to develop many indigenous innovations and technologies (Liu and Li, 2010; Liu, 2012).  Indeed, there are serious deficiencies in the Greenpeace reports. First, the research lacks scientific evidence and legal basis. Through searching all GM-related patents in the United States Patent and Trademark Office (PTO) and European Patent Office (EPO) databases, this Greenpeace commissioned research identified some patent applications with similar topics and then speculated arbitrarily that the Chinese GM rice would be covered by these foreign patents.4 Second, the reports completely ignore the nature of patent protection in terms of time frame, geographical coverage, and judicial scope of the patent rights. For example, the research does not look into whether any patent at stake has been filed and—especially—granted in China, and if so, whether it is still valid. Third, and most importantly, the Greenpeace research absolutely neglects the applicability of foreign patent claims to commercialization of Chinese GM rice as these foreign patents are not granted in the major rice producing, exporting, importing, and consuming countries.  Of course, the Chinese government and Chinese legal scholars have not, for their part, examined thoroughly whether China owns the full IPRs to its GM rice. In sum, neither opponents nor supporters have obtained all the information that could shed light on the complexity and dynamism of the IP framework in biotechnology research in general or pertaining to IPRs in the research and development (R&D) of Chinese GM rice in particular, because of the confidential terms of contracts between the parties involved.  In this paper, we try to answer the question of the ownership of the Chinese GM rice through analyzing patent portfolio of Bt Shanyou 63, one of the approved GM rice varieties. Bt Shanyou 63 is also a hybrid of Zhenshan 97A (cytoplasmic male sterile [CMS] line) and Huahui 1, a restorer for the CMS line. In particular, the paper reviews the IP and technical property components associated with China's GM rice with the objectives of (i) examining the distribution and structure of patent rights on China's GM rice; (ii) assessing the extent to which China owns the IPRs to the GM rice; (iii) evaluating the impacts of relevant patents owned by foreign holders; and (iv) identifying the possibility of patent infringements if China commercializes its GM rice. The research is based mainly on patent portfolio analysis by investigating the distribution of patents, particularly the coverage and strength of patent claims. The data have been obtained from the PTO and EPO patent databases that have been used in the Greenpeace research, as well as from the SIPO patent database. A number of professional queries based on a combination of international patent classification (IPC) codes and technology-related search terms will be explored to collect all relevant IP documents. In addition, some relevant scientific publications from the Web of Science will be referenced accordingly. The research results will provide a basis for reconsidering the questions of commercialization of GM rice in China and reviewing China's strategic R&D policy in agro-biotechnology from the IP perspective.  The rest of the paper is structured as follows. Sections 2 and 3 describe the R&D of GM crops, especially GM rice, and patenting activities in China, so as to provide the historical and institutional contexts of the development of GM rice. Section 4 systematically deconstructs technical components of Bt Shanyou 63. Section 5 examines the scope of patent protection of GM rice varieties, and in particular, whether the production of the Chinese GM rice is covered by foreign patents. Section 6 discusses the implications of the results for the IP management of GM rice as well as other GM crops in China and elsewhere.

Who Owns the Intellectual Property Rights to Chinese Genetically Modified Rice? Evidence from Patent Portfolio Analysis