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.