Published: May 13, 2013
WASHINGTON — The Supreme Court ruled unanimously on Monday that farmers could not use Monsanto’s patented genetically altered soybeans to create new seeds without paying the company a fee.
The ruling has implications for many aspects of modern agriculture and for businesses based on vaccines, cell lines and software. But Justice Elena Kagan, writing for the court, emphasized that the decision was narrow.
“Our holding today is limited — addressing the situation before us, rather than every one involving a self-replicating product,” she wrote. “We recognize that such inventions are becoming ever more prevalent, complex and diverse. In another case, the article’s self-replication might occur outside the purchaser’s control. Or it might be a necessary but incidental step in using the item for another purpose.”
But Justice Kagan had little difficulty ruling that an Indiana farmer’s conduct in the case before the court, Bowman v. Monsanto Company, No. 11-796, had run afoul of patent law.
Farmers who buy Monsanto’s patented seeds must generally sign a contract promising not to save seeds from the resulting crop, which means they must buy new seeds every year. The seeds are valuable because they are resistant to the herbicide Roundup, itself a Monsanto product.
But the Indiana farmer, Vernon Hugh Bowman, who had signed such contracts for his main crop, said he discovered a loophole for a second, riskier crop later in the growing season.
For that second crop, he bought seeds from a grain elevator filled with a mix of seeds in the reasonable hope that many of them contained Monsanto’s patented Roundup Ready gene.
Seeds from grain elevators are typically sold for animal feed, food processing or industrial uses. But Mr. Bowman planted them and sprayed them with Roundup. Many plants survived, and he replanted their seeds.
Monsanto sued, and a federal judge in Indiana ordered Mr. Bowman to pay the company more than $84,000. The United States Court of Appeals for the Federal Circuit, which specializes in patent cases, upheld that decision, saying that by planting the seeds Mr. Bowman had infringed Monsanto’s patents.
Justice Kagan agreed, suggesting that Mr. Bowman had been too clever for his own good.
Mr. Bowman’s main argument was that a doctrine called patent exhaustion allowed him to do what he liked with products he had obtained legally. But Justice Kagan said it did not apply to the way he had used the seeds.
“Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased from the grain elevator; so too he could consume the beans himself or feed them to his animals,” she wrote.
“But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission,” she added, and went on to say that “that is precisely what Bowman did.”
Justice Kagan said that allowing Mr. Bowman’s tactic would destroy the value of Monsanto’s patent. “The exhaustion doctrine is limited to the ‘particular item’ sold,” she wrote, “to avoid just such a mismatch between invention and reward.”
Straight to the source: The New York Times.