Summary of the Case
Bowman v. Monsanto centers on Monsanto’s patented Roundup Ready® trait, which makes certain crops tolerant of the herbicide (weed killer) glyphosate. Growers who plant these soybeans can spray a glyphosate-based herbicide on an entire field, killing any weeds without harming the soybean plants. This method of farming allows farmers to better manage weeds, reduce labor and on-farm costs, and allows them to reduce soil erosion by eliminating the need to till their fields.
Roundup Ready® soybeans, and other plants that contain the Roundup Ready® trait, are the product of an immense investment in research and development by Monsanto. Since the glyphosate-tolerance trait was initially introduced in 1996, Monsanto has broadly licensed the technology to hundreds of independent seed companies – who then market and sell the product. Growers can obtain Roundup Ready® seeds for planting only by purchasing them from an authorized seed dealer and signing a licensing agreement. Under that agreement, a grower is authorized to make one generation of soybeans and sell them to be consumed. The grower can sell that crop through normal distribution channels.
However, the agreement provides no authorization to the grower to save and replant soybeans from a harvested crop or to sell those soybeans to someone else to plant them. Such restrictions are necessary because each of the harvested seeds is a new copy of the original and contains the same patented Roundup Ready® trait.
Vernon Bowman was well aware of these restrictions, having previously purchased Roundup Ready® seeds from authorized dealers and written to Monsanto about these restrictions. To avoid paying for the right to grow soybeans containing Monsanto’s patented technology, Bowman purchased soybeans from an Indiana grain elevator, not an authorized seed distributor.
The grain elevator sold soybeans that had been grown and harvested by many growers in the area. However, because almost 95% of soybean acreage in Indiana are grown from seeds containing Monsanto’s Roundup Ready® traits, most of the soybeans Mr. Bowman purchased possessed the Roundup Ready® trait. Mr. Bowman confirmed this fact by spraying a glyphosate-based herbicide on his crops, which would have killed any soybeans that did not possess this patented trait.
After harvesting these soybeans, Mr. Bowman saved the soybeans and replanted them the next year and replenished his stock with additional purchases from the grain elevator. He continued to make new copies of those soybeans for several seasons, spraying glyphosate on his crops two or more times each year. Monsanto informed Mr. Bowman that he was in violation of the patent. Mr. Bowman refused to stop infringing and Monsanto was forced to file suit against him so that he would stop taking the company’s technology.
Mr. Bowman claimed that because he bought soybeans from the grain elevator, he was entitled to make copies of Monsanto’s patented invention without separately obtaining authorization from Monsanto to do so. He argued that in growing new generations of Roundup Ready® soybeans he did not actually create copies of the technology in the seeds but simply “used” a technology that is “self-replicating.” Further, he argued that, after the first time such seeds were sold (in this case, to the grower who sold the crop to the grain elevator), Monsanto no longer had patent rights to them under the doctrine of patent exhaustion, which operates under certain circumstances to limit a patent-holder’s right to control a patented article.
The Court Rules
The U.S. District Court for Southern District of Indiana disagreed with Mr. Bowman. It granted summary judgment for Monsanto, ruling that Mr. Bowman had infringed Monsanto’s patents.
Mr. Bowman appealed the case to the Federal Circuit Court of Appeals, which again rejected his claims. It reasoned that “[e]ven if Monsanto’s patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like Bowman, plants the commodity seeds containing Monsanto’s Roundup Ready® technology and the next generation of seed develops, the grower has created a newly infringing article.” In other words, even if the patent exhaustion doctrine applied to the commodity seeds Mr. Bowman purchased, it did not give him the right to make new generations of Roundup Ready® soybeans. Mr. Bowman therefore infringed Monsanto’s patents because he made new copies of the company’s patented invention without its authorization.
The U.S. Supreme Court
On October 5, 2012, the U.S. Supreme Court granted certiorari in Bowman v. Monsanto Company, No. 11-796, to consider the scope of the doctrine of patent exhaustion in cases like this one.
The parties have raised a number of issues in their briefs, some or all of which may be decided by the Supreme Court. One issue is whether, under the patent exhaustion doctrine, the sale of a patented seed or plant—here, a grower’s sale of Roundup Ready® soybeans to a grain elevator—permits later purchasers like Mr. Bowman to create, use, and sell an unlimited number of new generations of that seed or plant without authorization from the patent owner. A second issue is whether the patent exhaustion doctrine permits later purchasers to circumvent the restrictions on replanting in Monsanto’s license agreements, which Monsanto requires buyers to accept before any sale of Roundup Ready® seeds by its authorized dealers.
The outcome will have particular relevance not only to patented seeds containing innovative traits, like Roundup Ready® soybeans, but also to other easily replicated technologies, including a spectrum of new and emerging biotechnology-produced products such as cell lines and vaccines. Development of these products would not be economically viable for research institutions and companies if their patent rights extended only through the first sale, such that later purchasers could replicate their inventions in unlimited quantities without authorization. More broadly, the issues before the Court have implications far beyond agriculture and biotechnology, since they call into question the enforceability of patent rights and licensing conditions in a range of technologies and industries. 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.