Premature Commercialization Claims In Canada

• Published date: 11 November 2021
• Law Firm: Gowling WLG
• Author: Ricki T. Johnston, Heyla Vettyvel and Jeffrey Coles

Ontario Court certifies class action against Syngenta

Syngenta AG, a global entity headquartered in Switzerland, has been the subject of class action lawsuits in Canada and the United States in connection with its alleged premature commercialization of Agrisure^TM Viptera and Agrisure^TM Duracade. The Agrisure^TM products are genetically modified corn seeds that include an insect-resistant genetic trait called "MIR 162," which is subject to patent protection in a number of countries, including Canada ("Agrisure^TM"). The Ontario Courts recently certified a national class proceeding brought on behalf of various Canadian corn producers against Syngenta Canada Inc. ("Syngenta") based on similar allegations regarding premature commercialization. While it remains to be seen whether this novel claim will be successful, the decision to certify the claim raises interesting questions about the autonomy of the Canadian intellectual property and regulatory systems and the potential for a growth in class actions based on premature commercialization in Canada.

Background

By 2015, North America was the largest producer and exporter of corn in the world and China was a large and growing export market for North American corn. In the Syngenta class proceeding, the Plaintiff made arguments about the interconnected and mutually interdependent nature of the corn industry. In the context of this corn market, various approvals are required in Canada and other major foreign markets before genetically modified corn can be sold within those individual markets.

In 2010, Agrisure^TM was approved for use in North America by American and Canadian regulators. By that time, the approval process in China had been initiated by Syngenta but was anticipated to take several years to conclude. In 2011, Syngenta brought Agrisure^TM to the market in North America. In November 2013, China rejected all corn from North America after it alleged it had identified corn exports that were commingled with Agrisure^TM. The Plaintiff alleged that as a result, the North American market was hit with a surplus of corn, and the price of corn dropped.

A novel claim: Negligent premature commercialization in the Ontario courts

The Plaintiff alleged that Syngenta negligently commercialized Agrisure^TM when it knew or ought to have known that doing so could have the effect, through commingling, of impacting the North American corn supply. The Plaintiff further alleged that Syngenta knew or ought to have known that without required approvals for Agrisure^TM in China, this commingling could lead to the closing of the export market and a corresponding...