Patent Rights & Innovation at Stake

The Supreme Court will decide a case this term that has the potential to jeopardize some of the most innovative biotechnology research in the country and alter U.S. patent law in a way that would have profound consequences for a range of industries—from agriculture to medicine to environmental science—that rely on the patent system to make their R&D investments economically viable.

The question at the heart of the case, Bowman v. Monsanto, is how to apply a judicially created doctrine that originated in the 19th century to 21st-century innovations like drought- and insect-resistant crops, which require tens of millions of dollars to develop but which can be readily copied millions of times because they consist of genetic or other easily replicable material.

The Supreme Court first recognized the patentability of genetically engineered organisms in a 1980 decision (Diamond v. Chakrabarty), relating to a genetically engineered bacterium capable of breaking down crude oil in order to clean up oil spills. That groundbreaking decision provided the legal foundation for the massive expansion of the biotechnology industry in the United States—and for the influx of billions of dollars of private capital to fund a range of scientific breakthroughs—over the past 30 years.

The glyphosate-tolerance trait is widely credited with helping growers cut costs, spread equipment over more land, and, perhaps most importantly, it has helped growers change the way they farm—reducing tillage to save precious topsoil, keep streams cleaner, and cut carbon emissions.

The specific case before the Court concerns the infringement of Monsanto’s patents by the unauthorized planting of soybeans that have been genetically engineered to resist glyphosate, a commonly used and environmentally attractive herbicide that would otherwise kill soybean plants along with the weeds it is intended to eliminate. Monsanto’s patented technology allows growers to manage weeds during the growing season and adopt conservation tillage practices, which has enabled farmers to reduce or eliminate tilling as a practice to control weeds.

As an early innovator in agricultural biotechnology in the 1980s and 1990s, Monsanto spent more than a decade—and substantial sums of money—developing the glyphosate-tolerance trait. Today, seed products containing this trait are widely used by soybean farmers throughout the United States. The trait is also widely credited with helping growers cut costs, spread equipment over more land, and, perhaps most importantly, it has helped growers change the way they farm—reducing tillage to save precious topsoil, keep streams cleaner, and lower carbon emissions.

Growers who purchase seeds containing the trait—known as Roundup Ready® soybeans—agree to grow only a single generation of soybeans to be sold as a commodity (i.e., to be processed for consumption by people or livestock). This restriction is necessary because planting a single soybean as a seed can produce over 30 copies of that soybean, and each soybean grown from a Roundup Ready® soybean will contain the same patented trait as the original.

Without restrictions on the grower’s ability to make new generations of soybeans, Monsanto’s (or any trait inventor’s) ability to protect its patented technology and to recover its R&D investment would effectively be lost as soon as it sold the first bags of seeds.

An Indiana grower, Vernon Bowman, thought he found a way around these restrictions. Rather than buy seeds from an authorized dealer that would have charged him for the right to plant them under a Monsanto license, he bought commodity soybeans from a local grain elevator. Knowing that over 90% of those soybeans would contain Monsanto’s patented trait, he planted them and sprayed his fields with a glyphosate herbicide that would have otherwise killed this soybean crop along with the weeds—obtaining the benefits of Monsanto’s technology. He then saved some of the soybeans from this second generation to replant the next season and replenished his stock with additional purchases from the grain elevator; he repeated the practice for seven years until Monsanto sued him for patent infringement in order to make him stop.

In his defense, he invoked the legal doctrine of “patent exhaustion,” which states that once a patent-holder sells a patented article without imposing any conditions on the buyer, the patent-holder’s rights are “exhausted” as to that article, and the buyer may use or sell it without being liable for patent infringement. (A related doctrine applies in the context of copyright law, allowing you to buy a book from a bookstore, read it, and later sell it, but not allowing you to photocopy the book and sell those new copies.)

Courts have twice rejected Bowman’s defense, with the court of appeals concluding that each new soybean that Bowman grew was “an infringing article” as he was in essence manufacturing a copy of the original—the equivalent of an unauthorized photocopy of a book.

The Supreme Court agreed to hear his case, however, raising concerns over whether the Court will effectively prohibit biotechnology and other high-tech companies from enforcing patents on easily replicable technologies against those who would use those technologies to make an unlimited supply of identical products without paying royalties to the patent-holder.

The Potential to Impact Both the Public and Private Sector

If universities and private biotech firms can no longer rely on the patent system to protect their ability to recoup their R&D costs by preventing such replication, there will be no financial incentive to continue investing in technologies with easily replicable features.

In the agriculture sector alone, Monsanto and its competitors are spending billions of dollars annually on R&D in agricultural biotechnology, pursuing traits that make crops higher yielding and more resistant to various environmental stresses, and to make grains with increased nutritional value.

If Bowman prevails, however, this field of research could be altered severely, as would many others in medicine, biofuels, and environmental science, as easily replicable technologies would no longer enjoy any meaningful protection under the patent laws.

We invite you to read more about the case, and Monsanto’s position. What is decided in Bowman v. Monsanto has the potential to determine the role the U.S. patent system plays in protecting innovation – across both the public and private sector.

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