Caseflicks

Supreme Court of the United States • 2013

Bowman v. Monsanto Co.

133 S. Ct. 1761 | 185 L. Ed. 2d 931 | 2013 U.S. LEXIS 3519 | 569 U.S. 278 | 81 U.S.L.W. 4295 | 24 Fla. L. Weekly Fed. S 179

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Takeaway

In short, this case holds that patent exhaustion frees a buyer to use or resell the patented item purchased, but not to reproduce that item—even when the item is a self-replicating seed.

Background

Monsanto held patents covering its Roundup Ready soybean technology, which gives soybean plants resistance to glyphosate herbicides. Monsanto sold the seed subject to an agreement allowing farmers to plant purchased seed for one season, sell or consume the resulting crop, but not save harvested seed for replanting.

Vernon Bowman bought licensed Roundup Ready seed for his first annual crop. For late-season crops, however, he bought cheaper commodity soybeans from a grain elevator. Knowing that many of those beans likely carried the Roundup Ready trait, he planted them, sprayed glyphosate to eliminate nonresistant plants, harvested the surviving soybeans, and saved seed from those crops for replanting over eight seasons.

Monsanto sued for patent infringement. Bowman argued that patent exhaustion applied because the commodity soybeans had entered the market through authorized sales. The District Court rejected that defense and awarded Monsanto $84,456 in damages. The Federal Circuit affirmed, holding that Bowman's planting and harvesting created newly infringing articles rather than merely using articles sold through an authorized sale.

Issues

Issue #1

Whether patent exhaustion permitted Bowman to plant patented commodity soybeans and save the harvested progeny for later planting without Monsanto's permission.

Holding

No. Patent exhaustion allowed Bowman to use, consume, or resell the particular soybeans he bought, but it did not give him the right to make new patented soybeans by planting and harvesting them.

Reasoning

Patent exhaustion provides that an authorized sale terminates the patentee's rights in the particular item sold. Once Monsanto, or an authorized seller, sold a soybean, its patent could not prevent a later owner from reselling that bean, consuming it, or feeding it to animals. But exhaustion does not transfer the separate right to make the patented invention; that right remains with the patent holder.

Planting seed to harvest a new crop creates new articles embodying the patented invention. Bowman did not simply use or resell the commodity beans he purchased. He planted them, cultivated the resulting plants, applied glyphosate to select for the patented trait, and harvested many more glyphosate-resistant soybeans. That process was the making of new patented seed, even though the original seed supplied the biological mechanism of reproduction.

A contrary rule would make patent protection for self-replicating seed practically worthless after the first authorized sale. Farmers or competing sellers could buy seed once and reproduce it indefinitely, while Monsanto would receive compensation only for the original articles sold. Limiting exhaustion to the particular sold article preserves the patent's incentive to innovate and prevents copying from eliminating the patentee's exclusive right to make the invention.

The Court's earlier decision in J.E.M. Ag Supply reinforced this conclusion. J.E.M. recognized that utility patents provide stronger protection for seeds than Plant Variety Protection Act certificates, including the ability to prohibit a purchaser from saving harvested seed for replanting. Treating exhaustion as authorizing Bowman to save and replant patented progeny would contradict that distinction.

Issue #2

Whether the ordinary, self-replicating nature of seeds transformed Bowman's planting and harvesting into a protected use rather than an unprotected making of patented articles.

Holding

No. Although planting is an ordinary use of seed, Bowman deliberately controlled and exploited the reproduction of Monsanto's technology; the Court did not decide how exhaustion might apply where self-replication occurs outside a purchaser's control or only incidentally to another use.

Reasoning

Bowman argued that seeds are meant to be planted and naturally reproduce, so planting should count as protected use of the purchased article. The Court rejected that framing because reproduction has always been excluded from exhaustion even if it can be described as a use. A purchaser may use a patented item, but may not use it to construct or copy another patented item.

The facts showed that Bowman, rather than the beans alone, caused the relevant replication. He intentionally bought commodity soybeans expecting many to contain the Roundup Ready trait, planted them at selected times, applied glyphosate to eliminate plants lacking that trait, harvested the resistant soybeans, and saved them to repeat the process. His conduct was a deliberate program to create successive generations of patented seed without paying Monsanto for them.

The Court emphasized the narrowness of its ruling. It did not resolve cases involving other self-replicating technologies where copying happens beyond the purchaser's control or where a new copy is an unavoidable and incidental part of using the product for some other purpose. Here, Bowman planted the soybeans specifically to make and market replicated Roundup Ready seed, so exhaustion provided no defense.