Building Intellectual Property within Fungal Biotechnology: Where Fungi fit in U.S. IP Law
A patent provides a limited period of market exclusivity to the owner of a new, useful and nonobvious invention, in exchange for public disclosure of the invention. The inventor explains how to make and use the invention, and the owner gains the right to exclude others from making, using, selling, offering to sell or importing the claimed invention. Following an intensive examination at the U.S. Patent and Trademark Office (USPTO), enforceable patent claims issue and generally expire 20 years after the relevant filing date.
For fungal innovation, utility patents can cover improved strains, mycelium materials, food ingredients, and biocontrol formulations, as well as cultivation, fermentation, and processing methods. A historical quirk also opens another route to fungal patent protection. The USPTO treats mushrooms as plants for plant patent purposes, a special class of patents distinct from utility patents, allowing certain new and distinct
mushroom varieties to qualify if they have been asexually reproduced.
Regardless of the subject matter, the scope of protection is determined by an issued patent’s claims. These numbered statements at the end of a patent define the boundaries of the owner’s rights, much as a deed defines the boundaries of a parcel of land. Patents are not self-enforcing, so the owner must bring a lawsuit against an alleged infringer to seek a court order stopping infringement or awarding damages. Infringement is assessed by comparing an accused third-party product or process with a patent’s claims, interpreted in light of the patent’s detailed description, or “specification.” Generally, an accused third-party product or process must meet every requirement of at least one issued patent claim to infringe.
Each additional requirement that a patent or patent application claim recites therefore narrows the range of products or processes the claim covers, creating a tradeoff between breadth and defensibility. A claim limited to a particular strain grown on a particular substrate may be easier to obtain, but also easier for a competitor to design around. A claim covering an entire class of mycelium materials reaches further, but may be harder to distinguish from earlier patents, publications, and other references, collectively referred to as “prior art.” A well-drafted patent application therefore includes claims at several levels of breadth, so narrower claims may preserve protection if a broader claim is rejected during examination or invalidated after issuance.
1. Claim what you made, not what you found
Finding a fungus that produces a powerful antimicrobial compound may be a scientific breakthrough, but discovery alone does not make the fungus or compound patentable. Simply isolating the strain or extracting the compound is generally not enough (See Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013)). Human intervention may support patent eligibility when it gives the resulting product markedly different characteristics from its natural counterpart (See Diamond v. Chakrabarty, 447 U.S. 303 (1980)). The USPTO applies the same “markedly different characteristics” analysis to products derived from nature. See MPEP § 2106.04(c). Examples include engineering a strain to produce a compound it does not naturally make, altering its cell walls to strengthen a mycelium material, or chemically modifying an extracted compound to improve its stability.
The same principle applies when natural strains are combined into a fungal consortium. A mixture does not necessarily become patent eligible merely because the strains have been brought together, even if selling them as one product offers a commercial advantage (See Funk Brothers Seed Co. v. Kalo Inoculant Co. 333 U.S. 127 (1948)). The relevant question is what the combination changes in structure, function or other properties. For example, interactions that give the consortium a biological activity its individual strains lack may support eligibility, while simply packaging strains that retain their natural functions may not.
Even when you cannot claim what a fungus or compound is, you may be able to patent a new and non-obvious method of making it, changing how it behaves or using it to achieve a particular result. The claims must recite specific, non-routine steps, not merely the natural function or desired outcome. Otherwise, a method that simply applies a natural property using routine steps may still be ineligible. (See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012); Natural Alternatives Int’l, Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019)).
These distinctions should guide the research as well as the patent drafting. Test what your strains and formulations change, document how your methods achieve their results, and build the claims around the contribution that gives the technology its commercial value.
2. Decide early what to patent and what to keep secret
Technical know-how that can be kept confidential may qualify for trade secret protection, if it derives independent economic value from not being generally known or readily ascertainable and the owner has taken reasonable measures to keep it secret. Substrate recipes, spawn protocols, and fermentation settings are good candidates for trade secret protection when the finished product does not readily reveal production details. Trade secret protection can last indefinitely, so long as the criteria are met, but enforcing your trade secret rights against unauthorized access or disclosure may require lengthy and expensive litigation.
If competitors can reverse engineer your invention from the finished product, trade secret protection alone may not provide the protection you need. For qualifying innovations, patent protection can arm you with the right to stop competitors from making or using the claimed invention, even if they reverse engineer your product or develop the same technology independently. This distinction matters for live spawn, starter cultures, and inoculants, from which a competitor may be able to recover and propagate, e.g., a proprietary strain.
A combined patent and trade secret strategy is often prudent. Practical safeguards include limiting access to master cultures and sensitive protocols, requiring confidentiality agreements, and documenting material transfers. Agreements with collaborators and co-manufacturers should define permitted uses and restrict unauthorized propagation, sequencing, reverse engineering, and further transfers.
The same agreements should address ownership of derivatives and improvements, including any agreed assignments of ownership to your company or institution. Maintaining reference cultures and sequence records alongside the transfer documentation can help establish strain identity and trace access if a dispute arises.
3. Watch the clock on disclosures and sales
Sharing an invention too soon can cost you the chance to secure patent protection. Keeping technical details confidential until a patent application can be filed helps preserve your patent rights in the United States and abroad. The United States generally allows inventors one year after their own public disclosure event to file a patent application on the disclosed invention; however, that grace period does not preserve rights in other countries and jurisdictions. Filing a patent application before disclosure is often the most prudent way, and in many jurisdictions the only way, to preserve international patent rights for your invention.
Preserving your patent rights means recognizing that routine research and business activities can amount to a public disclosure. Technical information may become public when made accessible to people who have no obligation to keep the information confidential, e.g., conference posters and talks, preprints, publicly accessible theses, sequences released on GenBank, and strains made available through public culture collections can all qualify. A pitch deck or demonstration can also count as a disclosure event, even before a small audience, if the presentation is performed without confidentiality protections. Whether a disclosure affects patentability depends on what it reveals about the invention. A publicly accessible document can count as a disclosure even without formal publication or proof that anyone actually read the contents. When discussions cannot wait until patent filing, confidentiality agreements should be in place before technical details are shared. A confidentiality agreement can keep a disclosure from becoming public, but, as discussed below, it does not cure a commercial sale or offer.
A commercial offer for sale can also trigger the on-sale bar, even if the customer never accepts and no binding contract is formed. In the United States, your own sale or commercial offer more than a year before filing can bar patent protection if the invention was ready for patenting. The rule applies to products and processes alike. Selling a strain, formulation or mycelium material can jeopardize protection for the product, while selling products made using a secret process can bar a later patent on that process, even if the process itself was never disclosed (Celanese Int’l Corp. v. ITC, No. 22-1827 (Fed. Cir. Aug. 12, 2024)). A confidentiality agreement does not necessarily prevent the bar (Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 586 U.S. 123 (2019)).
By the time a new strain or mycelium material is ready for market, earlier publications, presentations or sales offers may already have put patent protection out of reach. Incorporating patent review into research and scale-up planning gives inventors time to decide what to protect, where to file, and which disclosures should wait until an application is on file.
4. Keep a clean chain of title
Building a company around an invention does not automatically make the company the owner. Under the default U.S. rule, joint inventors hold equal, undivided interests in the patent, meaning each owns a share of the entire patent regardless of the size of their contribution. Unless an agreement provides otherwise, any co-owner can, e.g., license the invention to a competitor without the others’ consent or any obligation to share royalties. Assigning all ownership interests to the company centralizes control over licensing and enforcement, allowing a venture to build and retain its IP portfolio as founders, employees, and investors change.
Putting that control in the company’s hands starts with written assignments transferring the founders’ relevant IP (often developed pre-incorporation) to the company. Patent rights initially vest in inventors, and neither employment nor funding automatically transfers ownership. Before work begins, agreements with employees, contractors, and co-manufacturers should establish ownership and assignment obligations for inventions, including improvements to existing technology. Assignment language should be a present transfer (“hereby assigns”), not a promise to assign in the future, and assignments should be recorded with the USPTO. Maintaining a clear record of assignments and licenses helps the company demonstrate the rights investors will expect to review.
Securing the company’s rights also means examining earlier ownership commitments. If an invention grew out of university research, a company may need to negotiate a license through, e.g., a university’s technology transfer office, taking account of the university’s rights and commitments to research sponsors. Federal funding can shape a deal as well, bringing Bayh-Dole reporting duties and a government license to practice the invention. Failure to meet the Bayh-Dole disclosure, election, and filing deadlines can jeopardize title to the invention (35 U.S.C. § 202(c); 37 C.F.R. § 401.14). Even the company’s manufacturing plans may be affected. Exclusive licenses to use or sell such inventions in the United States generally require covered products to be manufactured substantially in the United States, unless the funding agency grants a waiver.
A missing assignment or unresolved ownership claim can stall an investment, licensing deal or acquisition even after the underlying invention has been granted patent rights. Resolving ownership early and maintaining a clear record of the company’s rights and obligations help preserve the portfolio’s value and give investors and commercial partners a clearer basis for evaluating the venture.
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For a fungal venture, IP planning should complement research from its earliest stages. The inventions and know-how behind a new strain or mycelium material may have commercial value far beyond the first product brought to market. Protecting this broader body of work through appropriate patent rights, confidentiality safeguards, and clear ownership helps the company earn a return on its research through future products, licensing, partnerships, and acquisitions.
