U.S. SC sides with Monsanto in patent infringement case

By Jessica M. Karmasek | May 13, 2013

WASHINGTON (Legal Newsline) -- The U.S. Supreme Court ruled Monday that a farmer who bought patented seeds cannot reproduce them through planting, and harvest them, without the patent holder's permission.

A unanimous court sided with agribusiness giant Monsanto Company in the case.

"Under the patent exhaustion doctrine, (Vernon Hugh) 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. Monsanto, although the patent holder, would have no business interfering in those uses of Roundup Ready beans," Justice Elena Kagan wrote for the court. "But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto's permission (either express or implied). And that is precisely what Bowman did.

"He took the soybeans he purchased home; planted them in his fields at the time he thought best; applied glyphosate to kill weeds (as well as any soy plants lacking the Roundup Ready trait); and finally harvested more (many more) beans than he started with."

Because Bowman, an Indiana soybean farmer, reproduced Monsanto's patented invention, the doctrine of patent exhaustion -- which originated in 19th Century to 21st Century innovations like drought- and insect-resistant crops -- does not protect him, the nation's high court concluded.

In 2007, Monsanto sued Bowman to stop him from using and selling soybean seeds from plants that had, in turn, been grown from seeds genetically modified by Monsanto to produce plants resistant to herbicides.

Doing so allows farmers to kill neighboring weeds without harming the soybean plants.

Bowman, who was represented by New York-based Frommer Lawrence & Haug LLP, argued he legally purchased seeds at a grain elevator, which bought them from farmers who had, with Monsanto's authorization, used the genetically modified Monsanto seeds to grow their soybean crops.

Monsanto claimed that Bowman infringed its patents on herbicide-resistant plants and seeds by using the grain elevator seeds to grow his soybean crops.

Bowman asserted that Monsanto's sales of the original seeds to authorized purchasers exhausted the company's patent rights and therefore it could not enforce its patents against second-generation and later seeds that resulted from planting the original seeds.

The nation's high court accepted Bowman's case in October. It heard arguments in February.

In January, Monsanto said affirming its ability to enforce its patent rights in the case was "critical" to promoting continued research in biotechnology and other key fields -- as companies, universities and research institutions rely on patent law to recoup their research and development costs, and protect against unauthorized copying of their inventions.

"The U.S. patent system has played a pivotal role in incenting innovation and spurring the advancement of many of our nation's vital industries," David Snively, executive vice president and general counsel for Monsanto, said in a statement at the time. "In this case, this system has supported the discovery and expansion of a novel science that has revolutionized agriculture, enabling growers to produce more food while they also conserve more natural resources."

He continued, "What's at stake is some of the most innovative research on the planet -- not only in agriculture, but in industries from medicine to environmental science that rely on patent systems to make R&D investments economically viable.

"If companies and universities can't count on their inventions being protected, few will continue to invest the amounts needed to create a new seed, a new medicine or another new technology."

Both lower courts that previously heard the case agreed with Monsanto's position and ruled that well-settled patent law prevents the unauthorized copying of this type of invention.

While the U.S. Supreme Court sided with the company, it noted in its 10-page opinion that its holding is limited -- "addressing the situation before us, rather than every one involving a self-replicating product."

"We recognize that such inventions are becoming ever more prevalent, complex and diverse," Kagan wrote. "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.

"We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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