A unanimous U.S. Supreme Court that is often skeptical of patents embraced a key seed patent on Monday in the case of a Monsanto Co. soybean variety that was being replicated by savvy farmers.
The decision in the closely watched case Bowman v. Monsanto Co. may have its biggest impact in biotechnology, where self-replicating techniques are often used in research as well as commerce. Language in the decision could invite more patent infringement claims in that field, said Kenyon & Kenyon partner Patrice Jean, though she added, "I don’t think the court meant to prevent researchers from continuing their research."
The ruling was a victory for Monsanto and its advocate before the court, Seth Waxman of Wilmer Cutler Pickering Hale and Dorr.
"The court’s ruling today ensures that longstanding principles of patent law apply to breakthrough 21st century technologies," Monsanto executive vice president and general counsel David Snively said. "The ruling also provides assurance to all inventors throughout the public and private sectors that they can and should continue to invest in innovation that feeds people, improves lives, creates jobs, and allows America to keep its competitive edge."
If patent law allowed Monsanto’s genetically modified seeds to be copied without a license, Justice Elena Kagan wrote for the court, "a patent would plummet in value after the first sale of the first item containing the invention." That, she added, would "result in less incentive for innovation than Congress wanted." The case was decided without concurrences or dissents in a terse 10-page ruling.
In the run-up to oral arguments in February, the case was cast by some as a David-and-Goliath battle between Indiana farmer Vernon Bowman and the agribusiness giant Monsanto over use of the company’s "Roundup Ready" soybean seed, genetically modified to resist the company’s own Roundup herbicide.
But the Supreme Court at oral argument and in the opinion portrayed Bowman in a less favorable light. Kagan wrote that Bowman, "it is fair to say, appreciates Roundup Ready soybean seed."
Bowman purchased the seed under a licensing agreement that allows farmers to use it in only one season. But Bowman then bought other "commodity soybeans" in bulk, anticipating that many of the seeds would be the Roundup Ready variety.
Bowman was correct, and he was able to use those soybeans to produce successive crops of Roundup-resistant soybeans. Monsanto discovered the practice and sued Bowman for patent infringement. Bowman fought back, invoking the "patent exhaustion" doctrine that places limits on patent rights after a product is sold. But the federal district court and the U.S. Court of Appeals for the Federal Circuit sided with Monsanto, upholding an $84,456 judgment against Bowman.
The high court affirmed the federal circuit, finding that, under the exhaustion doctrine, Bowman could sell the soybeans he produced from the legitimately purchased seed, or could feed them to his animals. "But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission," Kagan wrote. "And that is precisely what Bowman did."
Kagan also dismissed Bowman’s argument that it was the seeds, not himself, that made the replicas of Monsanto’s invention. "Bowman was not a passive observer of his soybeans; multiplication," Kagan wrote. "It was Bowman, and not the bean, who controlled the reproduction."
The ruling ended with a significant caveat that "our holding today is limited—addressing the situation before us, rather than every one involving a self-replicating product." With new inventions becoming "ever more prevalent, complex and diverse," Kagan said future cases might involve self-replication that is beyond the purchaser’s control or is necessary for using the product.
With that cautionary language, the ruling’s impact outside biotechnology may be limited, said John Dragseth of Fish & Richardson. "It’s huge if you are Monsanto," said Dragseth, who also said the decision was not a big surprise. "It would have been stark for the court to say, ‘OK, we’re going to destroy Monsanto’s entire business model.’ "
The Center for Food Safety, which filed a brief on behalf of Bowman, criticized the decision. "The court chose to protect Monsanto over farmers," said executive director Andrew Kimbrell. He called the decision a "setback for the nation’s farmers" and said it ran "contrary to logic and to agronomics, because it improperly attributes seeds’ reproduction to farmers, rather than nature."
Tony Mauro is the U.S. Supreme Court correspondent for The National Law Journal, a Legal affiliate based in New York.