The Farmer Who Fought Monsanto (Part II)

At first glance, the recent U.S. Supreme Court decision in Bowman v. Monsanto could fairly be described as a ruling in favor of big players in the agriculture market, which prohibits farmers from planting seeds rightfully purchased in the open market.

Mnet 131547 Gerber Eisenberg Lead

At first glance, the recent U.S. Supreme Court decision in Bowman v. Monsanto could fairly be described as a ruling in favor of big players in the agriculture market, which prohibits farmers from planting seeds rightfully purchased in the open market. It is a ruling that has created a buzz of concern, and has many in the agriculture and food processing industries wondering what is in store as we push the envelope of genetic modification and optimization of crops and livestock.

Playing God?

From a distance and with restricted knowledge of the facts and of nuances of U.S. Patent Law, the ruling in this case appears as the courts are “playing God,” telling farmers when they can or cannot plant a seed and grow a soybean plant. Comments on Internet blog posts suggest that the Supreme Court has prohibited something that happens as part of nature, simply to protect monetary rewards to companies investing in agriculture research and development. Indeed, as explained by Justice Kagan in the ruling, if the Court ruled otherwise, “Monsanto’s patent would provide scant benefit.” As the Court reasoned, “Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article.”

However, such characterizations are unfounded in light of the legal issues presented. The Supreme Court’s apparent focus on the monetary reward to companies such as Monsanto does not mean that there has been a shift toward granting patent protection covering laws of nature. And the decision in this case is not merely a rationalization for extending patent laws to a new frontier. Rather, the reward to Monsanto for its innovation was at issue because of the legal principles being argued by the accused infringer — namely, the argument that the “first sale doctrine” prohibits further recovery by Monsanto. Because Mr. Bowman argued that Monsanto’s initial sale of its seeds limits the extent of its patent rights, the Supreme Court took into account the practical conclusion if that were the rule. Accordingly, the Court observed that, if Mr. Bowman were correct, anyone could simply plant an initial crop of seed purchased from Monsanto and subsequently sell soybeans for others to plant.

In the end, the Court found in favor of Monsanto because it was determined that Mr. Bowman was not properly applying the rule of “Patent Exhaustion.” The Court determined that he was not merely using or selling the same patented products (i.e., the soybeans), he was creating “replicas” of the patented product by planting the soybeans. Thus, in the context of a patented “self-replicating” product such as a seed with special genetic traits, it can be an act of patent infringement to use the copies made when one “controls the reproduction” of the seed.

Where to go from here

Included in the Supreme Court’s ruling in Bowman is the express statement that the ruling is limited to the particular context of that case. Nevertheless, the ruling sheds light on interesting avenues for future cases concerning “self replicating” products such as plants and seeds and perhaps even livestock. Generally, the decision in the Bowman case increases the possibility that patent rights are available to prohibit one from doing what the Court called “controlling” reproduction of the product. In that context, the Court’s ruling provides significant assurance to companies that an investment in research and development for agricultural and similar products will be justified and rewarded. This is especially important for companies involved with developing agricultural products that are optimized or genetically modified. The Court definitively made clear that planting and growing a crop is considered making replicate products, and thus would be an infringing act not covered by the “exhaustion doctrine.”

There are many possible fact scenarios that could warrant a different result than this particular case, of course. The Supreme Court ruling itself recognizes this, and stated that it realized “that such [self-replicating] inventions are becoming ever more prevalent, complex, and diverse.” The Court explained that, in another case with different facts, it might be argued that the person did not have control of the self-replication, or the self-replication may be an incidental step when using the product for another purpose. However, at least from the present vantage point, it is unlikely that such possible fact scenarios create alarm for businesses investing in agriculture research. The risk that such activities would have a large-scale impact appears to be minimal, and it is likely that the claims of a patent may be drafted in a way to reduce the risk of such situations.

Bradley Rademaker is an intellectual property attorney with Neal, Gerber & Eisenberg LLP (Chicago). He may be reached at (312) 269-8037 or brademaker@ngelaw.com.

More in Supply Chain