Monday, May 13, 2013

Monsanto v. Bowman: A Unanimous Supreme Court Sides with Monsanto

Today a unanimous Supreme Court affirmed the Federal Circuit's decision in Monsanto v. Bowman, and held that "patent exhaustion does not permit a farmer to reproduce patented seeds for planting and harvesting without the patent holder's permission." A background on the case can be found in earlier posts to this blog.
The Justices seemed to see through Bowman's arguments and understand what was at stake in this case. Writing for the Court, Justice Kagan noted that it is "well-settled" that the authorized purchaser of a patented product does not acquire any right to make copies of the product, and observed that were the Court to find in favor of Bowman patents would provide "scant benefit" to companies like Monsanto, and little incentive for investment in innovation.
The Court’s decision is explicitly premised on the fact that Monsanto requires farmers to enter into a license agreement which allows them to plant the patented seeds and harvest the resulting crop for use as food or animal feed, but not to replant the seeds or sell them for replanting. In footnote 3, the Court points out that "we do not here confront a case in which Monsanto (or an affiliated seed company) sold Roundup Ready to a farmer without an express license agreement. For reasons we explain below, we think that case unlikely to arise. And in the event it did, the farmer might reasonably claim that the sale came within an implied license to plant and harvest one soybean crop."
Kagan pointed out that a decision in favor of Bowman would be entirely inconsistent with the Court’s 2001 decision in J.E.M Ag Supply v. Pioneer Hi-Bred International, in which the Court held that utility patent protection is available for seeds and plants. In J.E.M., the Court noted that that the requirements for getting a patent are more stringent than those for obtaining a Plant Variety Protection (PVP) certificate, and that the protections afforded by a patent are correspondingly greater.  If the Court had sided with Bowman, it would mean that the owner of a patent would not only not be able to prevent a buyer from saving and replanting harvested seeds, but would be unable to prevent the buyer from selling the seeds, something "even a PVP certificate owner (who, recall, is supposed to have fewer rights) can usually accomplish."
Some supporters of Bowman have argued that farmers have a long-standing tradition of buying commodity grain for planting, but the Court gave short shrift to this contention. In a footnote, the Court observed that grain elevators "purchase grain from farmers and sell it for consumption; under federal and state law, they generally cannot package or market their grain for use as agricultural seed." The Court also noted that the commodity soybeans Bowman purchased were not intended for planting, but for consumption, and that Bowman himself had "conceded in deposition testimony that he knew of no other farmer who employed beans bought from a grain elevator to grow a new crop."
The Court also rejected Bowman's argument that seeds should be treated differently for purposes of exhaustion because they "self-replicate." The Court observed that Bowman was far from a passive observer, and that he had actively "made" (in the infringing sense) the copied seeds by purchasing the seeds knowing that many would be Roundup Ready, applying glyphosate in a way that culled any plants without the patented trait, saving the seeds to plant a later time, planting the beans in his field at the time he thought best, attending and treating them, including by exploiting their patented glyphosate-resistance, and harvesting the seeds, which he either marketed or saved to begin the next cycle. "In all this, the bean surely figure. But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto's patented invention.”
In the final paragraph, Kagan emphasizes that the decision is limited to the facts on hand, and the holding does not extend to hypothetical situations in which an article self-replicates "outside the purchaser’s control," or in which replication might be a necessary or incidental step in using the item for another purpose. She cites to 17 USC  117, a section of the copyright statute that addresses concerns relating to software and copyright that are very analogous to the concerns about inadvertent infringement expressed by supporters of Bowman. This analogy between software copyright and DNA patent was the theme of the Amicus brief I filed in support of Monsanto, in which I particularly pointed out that concerns about unavoidable infringement could be addressed by Congress if necessary, and citing 17 USC 117 as a specific example of that approach.

Friday, May 10, 2013

Jury finds Cellectis meganuclease claims invalid, but infringed by Precision Biosciences under Doctrine of Equivalents

As reported in an earlier post, on March 1, 2011, Cellectis sued Precision Biosciences in the District Court of Delaware [CIV-No.-11-173] for allegedly infringing US patent number 7,897,372, directed to "I-CreI Meganuclease Variants with Modified Specificity.”   The companies are both attempting to commercialize engineered meganucleases for use in genetic engineering. The litigation between Cellectis and Precision Biosciences has come to include 20 distinct lawsuits filed in Delaware and Eastern North Carolina (Precision licenses its patents from Duke University), and to involve multiple patents owned by both companies, a couple of which were discussed in this earlier post.

On May 3, the jury issued a verdict with respect to asserted claims 37, 40 and 50 from the ‘372 patent, finding all of the claims invalid for obviousness and inadequate written description. The jury also found that none of the claims are literally infringed by Precision’s meganucleases, and that Precision is not liable for inducing or contributory infringement of the claims. The jury did find that Precision meganucleases infringe claims 37 and 50 under the doctrine of equivalents.

Here are the claims:

37. A recombinant monomer of an I-CreI meganuclease variant comprising at least one mutation in the amino acid sequence of SEQ ID NO: 70, wherein said at least one mutation comprises a substitution at one or more of the amino acids residues at positions 44, 68 and 70 and said monomer further comprises at least one additional mutation of an amino acid residue directly contacting a DNA target sequence wherein said amino acid residue directly contacting a DNA target sequence is selected from the group consisting of positions 26, 28, 30, 32, 33 and 38, wherein said monomer when in a dimeric form is able to cleave DNA.

40. The monomer of an I-CreI meganuclease variant of claim 37, wherein said monomer when in a dimeric form has a modified DNA cleavage specificity relative to the I-CreI meganuclease of SEQ ID NO: 70 in at least one nucleotide in the .+-.3 to 5 triplets.

50. A single-chain chimeric meganuclease comprising the fusion of two different monomers according to claim 37.

Earlier, on April 9, 2013, the District Court issued an order denying multiple motions on summary judgment, including one relating to literal infringement of Claim 40. In one interesting aspect of the decision, the District Court judge held that the term "variant of the wild-type monomer from 1-Crel"  (which appears in the preamble of claim 37, from which claim 40 depends) is an indefinite “limitation,” essentially because the court found that one of skill in the art would not be able to discern the breath of the term "variant." The court pointed out that the claim does not limit the number of mutations that could be present in the amino acid sequence of the claimed “variant,” and it is unclear at what point the number of mutations would cause the sequence to diverge so substantially from wild- type as to no longer constitute a "variant" of the wild type protein, but rather a distinct protein.  The use of this sort of open-ended "variant" language is not uncommon in patent claims of this type.

It will be interesting to follow this case if it is appealed to the Federal Circuit, particularly with respect to the issue of infringement under the doctrine of equivalents. The most important Federal Circuit precedent in this area of which I am aware comes from Genentech v. Wellcome, a 1994 decision in which the Federal Circuit reversed a jury's verdict which found a claim reciting tissue plasminogen activator (t-PA) infringed under the doctrine of equivalents by a substantially re-engineered, synthetic version of t-PA (marketed as a pharmaceutical). The allegedly infringing product differed substantially in structure from the claimed protein, with 15% fewer amino acids and 10-fold greater half-life. In a concurrence, Judge Lourie pointed out that while the traditional "function-way-result" test for infringement under the doctrine of equivalents might work well for some inventions, such as in the mechanical arts, it seems a poor fit for inventions like recombinant proteins.