The Supreme Court of the United States recently passed down judgement in the case Bowman vs Monsanto Co. et al, concurring with the decision of The Court of Appeals of the Federal Circuit that patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder’s permission.
Monsanto owns a US patent covering its “Roundup Ready” soybean seeds. These seeds are genetically engineered to be immune to glyphosate-based herbicides (such as Monsanto’s RoundupTM herbicide), enabling the herbicide to be applied to the growing crop without damaging the soybean plants. Roundup Ready seeds are sold by Monsanto under a licensing agreement which allows the buyer to consume or sell the resulting crop as a commodity, but not to replant seeds obtained from the crop.
Bowman, from Indiana, is a farmer who purchased Roundup Ready seeds for his first crop of the year. For the second planting, however, he purchased and planted seeds from a grain elevator, knowing that as most farmers in the area used Roundup Ready seeds a good proportion of the seeds from the elevator would contain the genetic modification. Seeds from that crop were saved for planting the following year, and this was continued for eight consecutive seasons. After establishing that the seeds contained the genetic modification, Monsanto sued Bowman for patent infringement.
Bowman made a number of arguments in his defence. These included that, since the licensing agreement permitted farmers to sell the seeds obtained from plants grown from the Roundup Ready seeds to the grain elevator, his subsequent purchase and propagation of those seeds was protected by the doctrine of patent exhaustion. Bowman also argued that soybeans naturally germinate and reproduce, and that the seeds themselves were therefore responsible for any patent infringement (the so-called “blame-the-beans” defence).
The doctrine of patent exhaustion is a limitation of patent rights which means that once a patented article has been sold by the patent proprietor or with the patent proprietor’s permission the patent rights in relation to that product are exhausted, and the proprietor cannot prevent further downstream selling of that article. Bowman argued that Monsanto’s patent rights had been exhausted by the original sale of Roundup Ready seeds to the farmers, and that he was consequently free to plant and propagate the seeds purchased from the grain elevator.
However, the Supreme Court held that the doctrine of patent exhaustion only applies to the particular article sold (in this case the original Roundup Ready seeds), and is not intended to limit the patent proprietor’s exclusive right to use and manufacture other articles covered by the patent. Hence, under this doctrine, Bowman was free to buy soybean seeds from the patent elevator and to sell or consume those seeds, but he was not free to plant and propagate the seeds as this effectively resulted in the manufacture of new Roundup Ready seeds. The Supreme Court went on to state that if the doctrine of patent exhaustion did allow purchasers of patented technology to replicate it, then the value of a patent would be depleted as soon as the first sale of the patented product was made, creating a mismatch between invention and reward.
The Supreme Court also dismissed Bowman’s “blame-the-beans” defence, stating that Bowman was not a passive observer of the replication and that, left to their own devices the beans would not create eight successive soybean crops. It was clear that Bowman controlled the replication and replanting over a number of years.
In making their decision, the Supreme Court did state that this decision cannot be universally applied to cases involving self-replication, and that a situation may arise where self-replication occurs outside the purchaser’s control and so the doctrine of patent exhaustion may apply.
23 May 2013