The Supreme Court recently granted certiorari in Bowman v. Monsanto, an important case
for agricultural biotechnology. If the Supreme Court decides to overrule the
Federal Circuit's decision in favor of Monsanto, it could seriously impact the
ability of agricultural biotechnology companies to recoup their investment in
developing traits for seeds that farmers can harvest and replant, such as
soybeans.
Prior to agricultural biotechnology, there was little
incentive to invest in the development of improved seeds, since farmers have
historically been able to save and replant second-generation seeds, preventing
seed innovators from recouping the value they create in their seeds. The
exception has been hybrid corn, which cannot be saved for replanting without
losing beneficial characteristics of the hybrid, effectively forcing farmers to
buy new seed each year. This natural technological restriction on seed saving
encouraged investment by seed companies such as Pioneer in the development of
improved strains of hybrid corn.
In the 1990s scientists at USDA and Delta Pine Land, a
cotton biotechnology company subsequently purchased by Monsanto, developed genetic
use restriction technology (GURT). GURT allows for the production of seeds that
germinate and produce second-generation seeds, but those second-generation
seeds are sterile. In effect, this would allow a seed company like Monsanto to
impose a technological restriction on the ability of farmers to save and
replant seeds, analogous to the inherent restriction on the replanting of
hybrid corn. It would also allay concerns that genetically modified crops might
escape into the environment and cause environmental harm. However,
anti-biotechnology activists learned of GURT and dubbed it
"Terminator" technology, and made it a public relations disaster for agricultural
biotechnology, and particularly Monsanto. Agricultural biotechnology companies
like Monsanto have not used GURT in their products, but have instead relied
upon patents to prevent farmers from saving and replanting seeds. In 1999, Monsanto
pledged not to use GURT in its products.
Instead, Monsanto has relied upon patent and contract law to
prevent replanting of second-generation patented seeds. Basically, purchasers
of seeds containing a patented Monsanto trait, such as Roundup Ready soybean,
are required to sign a contract agreeing not to save second-generation seeds
for replanting. Farmers are of course able under the contract to harvest the
seeds for use as food or feed. A number of farmers challenged the
enforceability of this system on a variety of grounds, but in 2002 and 2006 the
Federal Circuit issued decisions upholding the validity of the arrangement in Monsanto v. McFarling and Monsanto v. Scruggs, respectively. In
those cases, the farmer saved and replanted seeds harvested from their own
fields, which the Federal Circuit held to constitute infringement of Monsanto's
patents.
In 2008, the Supreme Court's decision in Quanta v. LG Electronics cast some doubt
on the ability of Monsanto to use patents to prevent replanting of
second-generation seeds. In Quanta,
the Supreme Court overturned the Federal Circuit's decision that patent owners
could place conditions on sales, and held that the authorized sale of a
patented product exhausts patent rights in the product. Arguably, Quanta could be interpreted as precluding
Monsanto from claiming patent rights in the progeny of seed that had been the
subject of an authorized sale, as discussed in a previous post.
In Monsanto v. Bowman,
the
Federal Circuit held that even post-Quanta
Monsanto was not barred by the first sale doctrine from enforcing its patents
against farmers who save and replant second-generation seeds. Vernon Bowman is
a soybean farmer, and for years he has purchased and planted Roundup Ready
soybean, and signed the agreement not to replant. However, he later began
purchasing commodity soybeans from a grain elevator that he knew probably were Roundup
Ready, planting those seeds, and then harvesting and replanting some of the second-generation
seeds grown in his field. He apparently believed that since he did not sign
agreement with respect to commodity seeds he was not barred from replanting
them. He sprayed the soybeans twice during the season with Roundup, demonstrating
that not only did he know that the seeds are Roundup Ready, but also that he
was using the glyphosate-resistance properties of the plants.
The Federal Circuit rejected Bowman's argument that his
activities were protected by the first sale doctrine. The court held that his
purposeful planting and growing of the second-generation seeds constituted more
than simply "using” the patented seed, but impermissibly
"making" patented product in violation of Monsanto's patent.
In his petition for certiorari, Bowman argues that the
ability to make second-generation seed is an inherent characteristic of seeds,
and that his natural and foreseeable use of the seeds to produce
second-generation seeds is permitted under the first sale doctrine, regardless
of whether he sells the seed for use as feed or replants it.
The US solicitor general was invited to file Amicus brief in
the case, and did so, advising the Supreme Court not to grant certiorari. The
solicitor general agreed with Monsanto and the Federal Circuit that the first
sale doctrine under Quanta does not extend
to second-generation seed. The Federal
Circuit and solicitor general recognize that the interpretation of the first
sale doctrine advocated by Bowman would severely limit the ability of
biotechnology companies like Monsanto to recoup their sizable investment in
developing agricultural traits.
The grant of certiorari is presumably cause for great
concern to Monsanto and other agricultural biotechnology companies selling
patented seed that can be saved and replanted. In recent years, when the
Supreme Court has granted certiorari in patent cases it has tended to reverse
the Federal Circuit, for example in Prometheus,
Quanta, KSR, Bilski and Festo. Because the Federal Circuit is generally the only
Court of Appeals to decide patent cases, Supreme Court normally does not accept
patent cases to resolve split between the circuits. The fact that it took the
case suggests to me that at least some Justices question the Federal Circuit's
decision in Monsanto v. Bowman. Of
course, that does not necessarily mean the Court will reverse. For example, in LabCorp v. Metabolite (2006) the Supreme
Court dismissed a petition for certiorari as improvidently granted, although
three of the justices filed a dissent indicating they would have decided the
case and overruled the Federal Circuit's decision.
Supporters of Bowman argue that they Federal Circuit's
decision will end the long-standing practice of farmers saving and replanting
seeds, and of grain elevator selling commodity seeds. They point out that today
most of the soybeans collected by grain elevators and sold as commodity seeds
contain the patented Roundup Ready trait, since most farmers are planting
Roundup Ready soybeans. However, in this case Bowman clearly knew that the
seeds he planted were Roundup Ready, since he sprayed the fields repeatedly
with Roundup, which he would not have done if he thought he had planted non-glyphosate
resistant seeds. I very much doubt whether Monsanto has sued any farmer who
bought commodity seeds that happened to include the Roundup Ready trait, but
who did not take advantage of the patented trait by using Roundup on his
fields. Such a case of inadvertent infringement would clearly raise substantial
policy issues, but those are not the facts of this case.
If the Supreme Court reverses the Federal Circuit and holds
that companies like Monsanto cannot use their patents to prevent replanting a
second-generation seeds, it would be analogous to interpreting the first sale
doctrine in copyright as permitting anyone who buys a CD or DVD to make
unlimited copies and sell those copies. Clearly the first sale doctrine does
not go that far in copyright, and I don't think it should go that far in patent
law with respect to self-replicating technologies like seeds. I don't think a
farmer who innocently plants commodity seeds that happen to contain the
patented Roundup Ready trait, and who does not take advantage of that trait by
using Roundup on his fields, should be liable for patent infringement. But I
don't think a farmer should be able to take advantage of the first sale
doctrine to purposely acquire and grow patented seeds, benefit from the Roundup
ready characteristics by using Roundup on the crops, and then use the first
sale doctrine as a defense.
If the Supreme Court sides with Bowman in this case, I'm not
sure what Monsanto and other agricultural biotechnology companies will do. They
might have to alter their licensing practices, as discussed in a previous post.
Perhaps they will have to reconsider the use of GURT or some other
technological solution in lieu of patents.
15 comments:
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Freightliner Auto Glass
Don't you think your analogy is flawed? Records cannot reproduce themselves. Seeds, on the other hand, are naturally a means of reproduction.
David Koepsell makes a valid observation, the analogy between records (or more generally copyrighted material fixed in a machine-readable medium of expression) is not perfect, since seeds generally can reproduce absent human intervention. However, in practice reproduction of Monsanto's patented seeds usually involves human intervention. Farmers plant the seeds, and there is no dispute that in this case Bowman was instrumental in causing the seeds to reproduce in his fields, knew that these were not just "commodity" seeds and in fact were Roundup ready, and took advantage of that fact by spring his fields with Roundup. In doing so, he was putting other farmers at a competitive disadvantage since they had to pay for the valuable glyphosate resistance trait. I agree it would be very problematic if Monsanto had sued a farmer just because a seed happened to reproduce itself on his property, and the farmer had not actively participated in causing reproduction, but to my knowledge Monsanto has never sued anyone for passively permitting a patented seed to reproduce. So I think there is a good analogy between a farmer like Bowman and somebody who intentionally copies a copyrighted musical performance and then sells those pirated copies for profit.
Thanks for the posts. good stuff.
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Mini Auto Glass
Put another way, Monsanto put all farmers at a competitive disadvantage through their state-sponsored monopoly. Point taken, though. It seems that we need to treat reproduceable tokens as something different somehow and come up with a new rule for exhaustion for them to satisfy the aims of certain new technologies under the current regime. It seems like the notion of private property is threatened by copyright and patent if our abilities to do with the tokens we hold continue to be limited, as in this and the Kirtsaeng case.
In an environment with sufficient glyophsate load and nonresistant partners to outcross, glophysate resistance CANNOT be prevented from spreading. The same with pests and pest resistance.
Some may have heard of this process. There are even formulae to calculate a good estimate for speed by which it spreads.
Some boffins out there made a name for this stuff: it is called "evolution".
Similarly, a GURT seed has an evolutionary fitness of zero by definition. Any mutation that will disable the "terminator" will thus increase the evolutionary fitness of the seed in relation to the unmutated state by an *infinitely high* proportion. Inviable -> viable is the BIG JACKPOT in Darwin's lottery. Meaning the establishment of a deGURTed seedstock CANNOT be prevented (except - and even then not certainly - by a megaextinction event) once there is anything to out- and backcross to.
Non-GMO cultivars provide a proof to the point: requirement for cultivar protection ("seed patenting") is a distinctive trait that breeds true (or can be reproduced dependably, for F1 seeds). But in practice nobody does that except with traits that are highly deleterious for the plant's lineage (cannot survive without dedicated and massive human intervention). Like flore plena cultivars, which are generally sterile. It works no other way; even PCR could not (in dubio pro reo) prove without reasonable doubt that the individuals in question are not the offspring of some homoplasious (independently mutated) "sport". So most non-GMO cultivars registered for legal protection carry a whole batch of novel traits. Molecular proof is given by verifying a distinct and unique *haplotype across loci*, not some SNP or indel.
TL;DR: The law is Creationist here, to the detriment of all involved except the attorneys, and maybe not even them because they have to do hard and ugly work for their money.
(sry for the glyphosate fuckup in 1st para. Should have caught it but didn't)
For what it's worth, while transgenic hybrids cannot be productively replanted by farmers regardless of legal protection, they can be cannabalized and their transgenic traits sold by competeting companies at a fraction of the R&D time and cost required to create the novel trait in the first place. I don't see how overturning this protection would avoid severly chilling a technology/market that as it is, is already only profitable for the most massive market traits.
@mattvdileo
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A well written blog.
>Perhaps they will have to reconsider the use of GURT
But only within the USA, as GURT used outside of the USA satisfies the criteria of being a WMD (Weapon of Mass Destruction) and hence illegal to trade internationally.
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