Monday, May 13, 2013

Supreme Court: Saving and Replanting Patented Seeds Unlawfully Infringes the Patent

This morning, a unanimous Supreme Court held that a farmer infringed on Monsanto's patent for Roundup Ready soybeans, which had been genetically modified to survive exposure to its well-known herbicide. Bowman v. Monsanto, No. 11-796. (The genetic alteration enables you to spray the herbicide and kill everything except the soybeans you are trying to grow). Monsanto sells the seeds to farmers subject to a licensing agreement preventing growers from harvesting and replanting any seeds from the crop. Instead, the farmers must sell or consume the resulting crop. The defendant farmer in this case purchased the Roundup Ready seeds for his early crop from a Monsanto supplier and complied with the license agreement. However, he purchased additional commodity soybean seeds from a grain elevator (where the seeds were not sold subject to a licensing agreement), planted them, applied the herbicide to kill any non-genetically modified plants, harvested the resulting soybeans and saved them to plant his second crop (thereby avoiding the premium price paid for the Roundup Ready seeds). He did this for eight years and admitted that he knew of no other farmers who were doing this.

The legal theory asserted to support the farmer's conduct was that under traditional patent law, a legitimate purchaser of an object can put the object to whatever use he wants – except making copies – without infringing on the patent. In other words, ""the initial authorized sale of a patented item terminates all patent rights to that item." This is referred to as patent exhaustion. An example would be if you buy a car and then turn it into a house or a piece of art or buy a shoe and use it as a planter. However, in this case, the Court concluded that he was really making copies of the patented seeds. If this conduct were permitted, then farmers would only need to buy the patented seeds once before growing and saving their own. "If the purchaser of that article could make and sell endless copies, the patent would effectively protect the invention for just a single sale . . . [T]he exhaustion doctrine does not extend to the right to 'make' a new product."

As Justice Kagan explained in the opening paragraph of the opinion:

Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention. The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder's permission. We hold that he may not.
Following a trial, Monsanto was awarded $84,456. The verdict was affirmed on appeal.
Our holding today also follows from J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc., 534 U. S. 124 (2001). We considered there whether an inventor could get a patent on a seed or plant, or only a certificate issued under the Plant Variety Protection Act (PVPA), 7 U. S. C. §2321 et seq. We decided a patent was available, rejecting the claim that the PVPA implicitly repealed the Patent Act's coverage of seeds and plants. On our view, the two statutes established different, but not conflicting schemes: The requirements for getting a patent "are more stringent than those for obtaining a PVP certificate, and the protections afforded" by a patent are correspondingly greater. J. E. M., 534 U. S., at 142. Most notable here, we explained that only a patent holder (not a certificate holder) could prohibit "[a] farmer who legally purchases and plants" a protected seed from saving harvested seed "for replanting." Id., at 140; see id., at 143 (noting that the Patent Act, unlike the PVPA, contains "no exemptio[n]" for "saving seed"). That statement is inconsistent with applying exhaustion to protect conduct like Bowman's. If a sale cut off the right to control a patented seed's progeny, then (contrary to J. E. M.) the patentee could not prevent the buyer from saving harvested seed. Indeed, the patentee could not stop the buyer from selling such seed, which even a PVP certificate owner (who, recall, is supposed to have fewer rights) can usually accomplish. See 7 U. S. C. §§2541, 2543. Those limitations would turn upside-down the statutory scheme J. E. M. described.
The farmer also raised the issue of self-replicating seeds. The Court was skeptical of a blame-the-seed argument, particularly in this case where the defendant farmer "was not a passive observer of his soybeans' multiplication; or put another way, the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops. As we have explained, supra at 2-3, Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium."

Because a passive recipient of the patented seeds might have additional defenses that are not available to the defendant farmer in this case, the Court declined to address the issue of self-replication:

Our holding today 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. 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. Cf. 17 U. S. C. §117(a)(1) ("[I]t is not [a copyright] infringement for the owner of a copy of a computer program to make . . . another copy or adaptation of that computer program provide[d] that such a new copy or adaptation is created as an essential step in the utilization of the computer program"). We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances.
It might be a different case – as we all know exists – if this was simply a situation where bees, wind or other pollinators spread pollen from a patented crop to fertilize a non-patented crop and then some of the progeny contained patented or even new characteristics. (Frankencrops is one reason that some people are vehemently against genetically modified vegetables). Similarly, birds, other small animals and the wind frequently carry seeds from one location (i.e., a farmer who uses patented seeds subject to a licensing agreement) and drops them on land of another grower (who did not purchase the seeds or sign the licensing agreement).

So community gardeners, keep this case in mind this Fall when you begin saving seeds for next year. Did you grow your crop from patented seeds? Or Heirloom seeds?

1 comment:

  1. I have been wondering how this affects the heirloom seeds I often use to grow plants from. The source I get them hasn't put a disclaimer on them, but how will I really know?