Farmers cannot by-pass the patent protection provided for genetically-altered seeds by producing a new generation of seeds with the same traits, the US Supreme Court ruled Monday.
In a unanimous decision, the high court sided withMonsanto Co. in a dispute with an Indiana farmer who sought to cut the planting cost of his soybean crop by relying on subsequent generations of Monsanto’s patented Roundup Ready soybean seed.
The company developed a genetically-altered strain of seed that is resistant to the herbicide glyphosate. Monsanto sells the new seed under a licensing agreement with farmers that permits its use to grow one crop for sale or consumption.
The company explicitly bars farmers from using the resulting crop to seed future cultivation. The 20-year patent is designed to ensure that Monsanto reaps the rewards of its invention and innovation, and to provide an incentive for more innovation.
The farmer, Vernon Bowman, complied with the company’s licensing terms when planting and harvesting his first crop of the season. But rather than pay the higher price for Monsanto’s seed, Mr. Bowman purchased soybeans from a grain elevator and used them to seed his second crop of the season.
He assumed that most of the newly-purchased soybeans carried the genetic alteration that would render them resistant to the herbicide. After planting the seeds and applying the herbicide, the non-resistant plants died off, but most of the crop survived.
The farmer used this cost-saving technique for eight seasons – until Monsanto found out. The company sued for patent infringement.
Bowman’s lawyer argued that Monsanto’s patent protection did not extend to soybeans subsequently sold by farmers to a grain elevator and later sold by the grain elevator to Bowman. The patent protection was exhausted in such a case, the lawyer said.
A federal judge disagreed and ordered Bowman to pay Monsanto $84,000 in damages. A federal appeals court upheld the award.
On Monday, the justices affirmed those decisions in a 9 to 0 vote.
Although the case raised the important issue of how patents protect a self-replicating product, the justices declined to issue a broader decision.
Instead, the court focused on the limited issue raised in the Bowman case.
Justice Elena Kagan wrote the decision. She said that rather than creating a wholly new product, Bowman merely reproduced Monsanto’s patented invention. During every new planting, Bowman was profiting from the patented seeds without compensating the inventor, she said.
She rejected the argument that beans naturally reproduce and that the patent cannot extend through that reproduction process.
“Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium,” Kagan wrote. “But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto’s patented invention.”
Kagan emphasized that the decision was limited and could not be extended to every patent lawsuit concerning a self-replicating product.
“We recognize that such inventions are becoming ever more prevalent, complex, and diverse,” she said. “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,” Kagan wrote.
The case is Bowman v. Monsanto (11-796).