Patent Law

The Supreme Court Considers Biotech Seed Patents

What are the limits to patents on self-replicating technologies?

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In February, the Supreme Court heard oral arguments in the case of an Indiana soybean farmer, Vernon Hugh Bowman, who says he has the right to plant second-generation herbicide-resistant soybean seeds without paying a royalty to Monsanto, the biotech company that created and owns the invention. Monsanto's seeds are Roundup Ready, which means that they resistant to the company's popular herbicide glyphosate, known as Roundup. This technology makes it much easier and cheaper for farmers to control weed infestations in their fields.

Bowman is asserting the legal doctrine of patent exhaustion. After the first sale of a patented item, the purchaser may use and dispose of that item in any way she chooses; the royalty payment associated with the individual item entirely compensates the patent holder. If you buy a patented screwdriver, for example, you can resell it without owing the patent holder any royalties.

In this case, Bowman each year purchased herbicide-resistant soybean seed covered by Monsanto's patent for a first planting. Bowman, like nearly a quarter of a million American farmers, signed each time the standard technology agreement in which purchasers agree "to use the seed containing Monsanto gene technologies for planting a commercial crop only in a single season." The agreement also requires farmers not to supply it to anyone else for planting, not to save any seeds produced for replanting, and not to use or provide to anyone else the seeds for crop breeding, research, or seed production. 

In 1999, Bowman also bought commodity soybean seeds from a local grain elevator and planted them as a late-season second crop. Since late-season plantings are riskier, Bowman wanted to avoid paying for higher-priced commercial seeds. He expected that the commodity seeds he purchased from the grain elevator would mostly be Roundup Ready and, in fact, he successfully sprayed that crop with Roundup. He then saved seeds from that late-season crop and replanted them for many years, supplementing his subsequent late-season plantings with additional purchases of commodity grains. Bowman did not hide what he was doing. In fact, he forthrightly explained his practices in correspondence with Monsanto's representatives.

In 2009, Monsanto sued Bowman in Federal District Court for infringing its patents. Bowman essentially argued that when the grain elevator sold him seeds, it was in the same position as the owner of a properly purchased patented screwdriver reselling it to another consumer. In its summary judgment against Bowman, the Federal District Court for Southern Indiana found that the owners of the grain elevator "had no right to plant the soybeans and could not confer such a right on Bowman. Consequently, Bowman has infringed on Monsanto's patent rights by planting the commodity soybeans, which contained the patented trait, and then applying a glyphosate-based herbicide to that planted crop." The court ordered Bowman to pay Monsanto $84,000 in unrecovered royalties. 

In 2011, Bowman appealed his case to the U.S. Court of Appeals for the Federal Circuit in Washington, DC. In its decision, the three-judge panel reviewed two earlier cases, McFarling and Scruggs, in which farmers asserted patent exhaustion claims. In the McFarling case, a farmer simply violated the technology agreement he signed by saving and subsequently planting Roundup Ready seeds. He claimed that once he purchased seeds from Monsanto he could do whatever he wanted with them.

In the Scruggs case, a farmer claimed that he had bought Roundup Ready seeds but never signed the technology agreement and so was not infringing Monsanto's patent by replanting saved seeds. In Scruggs, the Appeals Court rejected this claim, noting that "there was no unrestricted sale because the use of the seeds by seed growers was conditioned on obtaining a license from Monsanto." The fact that Scruggs had not obtained a license meant that he had no right to use the seeds. The Court further found that the "fact that a patented technology can replicate itself does not give a purchaser the right to use replicated copies of the technology. Applying the first sale doctrine to subsequent generations of self-replicating technology would eviscerate the rights of the patent holder." Just because a technology is self-replicating does not change the fact that making copies of a patented item is an infringement.

In both cases, the Court of Appeals ruled in favor of Monsanto. Given these earlier rulings, it is not at all surprising that the Appeals Court found for the company again: "While farmers, like Bowman, may have the right to use commodity seeds as feed, or for any other conceivable use, they cannot 'replicate' Monsanto's patented technology by planting it in the ground to create newly infringing genetic material, seeds, and plants." In other words, Bowman infringed.

When the Supreme Court heard oral arguments in Bowman v. Monsanto last month, the justices' questions to the attorneys do not appear to bode well for Bowman's case. Bowman's lawyer had barely cleared his throat before Chief Justice John Roberts got right to the heart of the matter by asking: "Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?"

Bowman's attorney tried to deflect the Chief Justice's query by suggesting that Monsanto and other seed companies could protect their inventions through contracts. Later Justice Elena Kagan opined that relying contracts would be "peculiarly insufficient." Why? Because if one self replicating seed escapes "the web of these contracts [that]…essentially makes all the contracts worthless." Of course, that is exactly the argument the farmer in Scruggs was making: He hadn't signed a contract so he could grow and sell as many patented seeds as he wanted.

The Justices were also skeptical of Bowman's patent exhaustion argument. Justice Sonia Sotomayor, for example, declared that the "Exhaustion Doctrine permits you to use the good that you buy. It never permits you to make another item from that item you bought." Similarly, Justice Stephen Breyer noted, "When you create a new generation [of seeds], you have made a patented item, which you cannot do without the approval of the patent owner."

As a friend of the court, Assistant U.S. Solicitor General Melissa Arbus Sherry piled on against applying the patent exhaustion argument to self-replicating technologies like seeds. "In order to encourage investment, the Patent Act provides 20 years of exclusivity," said Sherry. "This would be reducing the 20-year term to essentially one and only sale." If that were to be the case, Sherry added, there would be "no incentive to invest, not just in Roundup Ready soybeans or not even agricultural technology" but any future self-replicating technologies.

As it happens, Bowman had the option of planting conventional soybeans whose seeds he could legally save for replanting each year. It's clear that he chose not to do this because he specifically wanted the weed-control convenience Roundup Ready seeds afforded him; he just didn't want to pay for them.

If the Supreme Court does "eviscerate" seed patent protections, agricultural biotech companies could turn to genetic engineering solutions similar to the Technology Protection System (TPS), an approach developed in 1999 by the U.S. Department of Agriculture and the seed company Delta & Pine Land Company (now owned by Monsanto). TPS consists of an array of three genes that causes a second generation of seeds to be sterile so that farmers would gain nothing by saving them. Bowman himself suggested in 2009 to the Federal District Court that Monsanto could protect itself against people like him by deploying TPS.

Back in 1999, anti-biotech activists were quick to denounce the TPS, dubbing it Terminator technology. The activists were against TPS precisely because it would prevent farmers from saving seeds. In addition, prominent anti-biotech activist Vandana Shiva worried in 2000 that one dire outcome of TPS would be "the gradual spread of sterility in seeding plants [that] would result in a global catastrophe that could eventually wipe out higher life forms, including humans, from the planet." This is, of course, biologically impossible: A gene technology that causes sterility is, by definition, one that can't spread.

If the Supreme Court were to rule in favor of Bowman, future advances in agricultural biotechnology would be significantly and needlessly slowed as agricultural biotech innovators seek regulatory approval to develop and incorporate TPS or other genetic use restriction technologies. Advances like increased drought tolerance, crops that use 50 percent less nitrogen fertilizer, disease resistant varieties, and nutritionally enhanced grains. Looking further afield, a decision for Bowman would also slow the development of all sorts of future self-replicating technologies ranging from stem cell therapies and vaccines grown on cell lines to self-assembling nanotechnology machines.

The patent system is certainly not perfect, but as Abraham Lincoln explained in 1858, its aim is to "add the fuel of interest to the fire of genius." So to paraphrase the Chief Justice: Why in the world would anybody spend money on developing an invention if as soon as they sold the first one anybody could make more and have as many of them as they want? That's the right question; let's hope the court comes up with the right answer.

Disclosure: As far as I know I own no stocks in any agricultural biotechnology company. Given the scientific consensus on the safety of biotech crops, I happily eat foods daily made from ingredients derived from them.

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  1. Considering Monsanto has been known to sue farmers because Monsanto’s seeds went over the property line and landed on the farmer’s property, I have no sympathy for them in this case whatsoever.

    1. Bullshit. Monsanto has never sued anyone for accidental cross-pollination. What they sued for is someone taking cross polinated seed, planting it, and then spraying it with Roundup in order to SELECT in favor of the Roundup ready trait. Then replanting THAT seed as the next years crop.

      Percy Schmeisers crop was 99% pure Roundup Ready canola. You don’t get that kind of purity by accident.

      His neighbors SAW HIM spraying his crop with Roundup as if he knew he was using Roundup Ready seed. They also knew that he was claiming organic status, which you can’t do in Canada if you’re planting GMOs. It was his own neighbors who turned him in.

      1. That’s a distinction without a difference. Accidental cross-pollination isn’t something you can sue over, spraying Roundup isn’t something you can sue over, but combine them and you can?

        1. heller| 3.8.13 @ 5:55PM |#
          “That’s a distinction without a difference. Accidental cross-pollination isn’t something you can sue over, spraying Roundup isn’t something you can sue over, but combine them and you can?”

          I don’t think he was sued for those activities; the activities are evidence that he was attempting to bypass the patent. That’s what he was sued for.

          1. I don’t think he was sued for those activities;

            What they sued for is someone taking cross polinated seed, planting it, and then spraying it with Roundup in order to SELECT in favor of the Roundup ready trait. Then replanting THAT seed as the next years crop.

            1. C’mon; yes, he did those things in an attempt to bypass the patent.

              1. Which I have no problem with. If he came across some GMO seeds without making an explicit agreement with Monsanto, then they are his seeds and can do with them what he pleases.

                1. If you find a copy of MS Word on the ground, is that your software and you can do with it as you please? Make a million copies of MS Word and sell them?

                  Genes are code. Planting seeds and growing additional seed from it is copying code.
                  Maybe what we should be talking about is a copyright.

                  1. If you find a copy of MS Word on the ground, is that your software and you can do with it as you please? Make a million copies of MS Word and sell them?

                    Sure you can.

                    Patents, copyright, it’s all the same argument.

                    1. No, you can’t. If I find a patented screwdriver on the ground and decide to cast it and make a few million clones, it’s infringement.

                      To activate MS Word, you need to agree to TOS, so the comparison isn’t a great one to start with.

              2. my classmate’s ex-wife makes $67 every hour on the internet. She has been without a job for seven months but last month her income was $17038 just working on the internet for a few hours. Here’s the site to read more jump15.com

        2. Yes – two actions that by themselves do not consititute a crime can be criminal when done taken together.

          Like driving and drinking.

          1. “Yes – two actions that by themselves do not consititute a crime can be criminal when done taken together.
            Like driving and drinking.”

            Well, not really.
            You can drink, so long as your BAL doesn’t exceed some arbitrary level, but that is a perversion of law.
            The intent is to keep people from driving dangerously, regardless of the specific actions.

            1. Ok, taking a photo of a US dollar, then printing that photo out on double sided paper.

              Two actions that taken together constitute a crime.

              1. Also not a crime, the crime is trying to pass that off as currency.

    2. Finrod| 3.8.13 @ 4:35PM |#
      “Considering Monsanto has been known to sue farmers because Monsanto’s seeds went over the property line and landed on the farmer’s property,”

      Given that it’s never happened, you’re either a liar or an idiot.

  2. This is going to be a harder case to argue for anti-Biotech folks than the Schmeiser case in Canada, because in this case Bowman isn’t trying to claim that the pollen accidentally drifted into his crops, and he’s not trying to claim he’s an organic farmer.

    In this case Bowman is clearly choosing to plant GMO seeds because he thinks it’s a superior technology. He just doesn’t want to pay the royalties for the superior seed.

    1. And it looks like Bowman specifically agreed to not do what he did. I don’t see how he can win the case.

  3. Bowman seems to be kind of an idiot here. He buys unlabeled seeds from a grain elevator, containing a mix of different seeds. He plants these seeds, then saves some of that year’s crop for next year’s crop.

    THEN he tells Monsanto what he did, basically inviting them to sue him. WTF? Why not just quietly replant the seeds, and if Monsanto tries to sue him, refuse to discuss his planting practices with them under the Fifth Amendment?

    1. Does the Fifth Amendment cover discovery in civil actions? IANAL, but I seriously doubt it.

  4. Bowman’s attorney tried to deflect the Chief Justice’s query by suggesting that Monsanto and other seed companies could protect their inventions through contracts. Later Justice Elena Kagan opined that relying contracts would be “peculiarly insufficient.” Why? Because if one self replicating seed escapes “the web of these contracts [that]…essentially makes all the contracts worthless.” Of course, that is exactly the argument the farmer in Scruggs was making: He hadn’t signed a contract so he could grow and sell as many patented seeds as he wanted.

    Does anyone else see the huge problem with Kagan’s argument? Massive question-begging. Basically she is saying that the problem with Bowman’s justification for what he did (that he was not stopped by the contract he signed) is that it allows him to do what he did!

    It’s the responsibility of Monsanto to make an airtight contract if they don’t want their seeds being used without their permission. It’s hardly Bowman’s problem that the contract they designed did not do what they wanted. If all the Supreme Court (and Ron) can argue is that Monsanto gets hurt because it failed to protect itself properly and that’s bad, well that is frankly a non sequitur. And it’s hardly a justification for using coercion instead of contracts.

    1. She’s saying that contract law is not a sufficient protection for these products. And without those protections, companies like Monsanto would never bother to make these technologies in the first place. These technologies are socially important, thus we need to protect them. Therefore, patent law is required.

      This is a pretty standard argument for patent law. It’s a utilitarian argument. I don’t necessarily buy it, but it’s totally consistent with the commonly held conception of the utility of patents. Given that the SCOTUS (and Kagan in particular) are open to utilitarian arguments, I’m not at all shocked that they buy this.

      Remember – the argument is only screwed up if you believe in liberty of contract. SCOTUS clearly doesn’t hold this view.

      1. Remember – the argument is only screwed up if you believe in liberty of contract. SCOTUS clearly doesn’t hold this view.

        And what about Ron?

  5. Bullshit your way out of this if you can, but I see a distinct contradiction between traditional libertarian dogma (government force is bad for most purposes) and supporting government-granted monopolies known as patents. I mean I get that patents are foundational to capitalism, and that you’re all pro-capitalism, but when you start really applying libertarian logic, you’re not allowed capitalism (since it relies on relatively massive government interventions in order to set up and maintain).

    I guess what I’m saying is how can you support government-granted monopolies on the right to a self-replicating thing (like a life form) for the sole purpose of providing its inventor a profit in order to socially engineer increased innovation, but universal healthcare is a bridge too far?

    Which is not to suggest that there isn’t a very strong thread of consistency through generally held libertarian beliefs (whatever you need to believe to justify giant businesses like Monsanto and Pfizer making the most profits they possibly can).

    1. “I guess what I’m saying is how can you support government-granted monopolies on the right to a self-replicating thing (like a life form) for the sole purpose of providing its inventor a profit in order to socially engineer increased innovation, but universal healthcare is a bridge too far?”

      Shithead, do you really think anyone’s buying a false equivalence that obvious?

      1. Not saying they’re equivalent at all. Patents are bona fide restrictions on what people do. All universal healthcare takes is some taxes to pay for.

        1. And taxes are not somehow restrictions on what people do?

          1. Yeah but there’s gonna be taxes no matter what, so healthcare is no more restrictive than another equivalently priced service, and taxes are supposed to pay for things for which they are a good investment. Universal healthcare saves money relative to private healthcare, so freedom, even defined as more money in people’s pockets, is actually increased.

            1. “taxes are supposed to pay for things for which they are a good investment.”

              No, they’re not, shithead.

            2. Go home sockpuppet.

            3. Your main problem here is that universal healthcare does *not* save money relative to even the semi-socialized form of healthcare we have in this country.

              Just from a utilitarian perspective – everywhere universal healthcare has been tried (outside of France maybe) the care has been, at best, marginally worse than what is available here now (Canada and the UK) and most often completely atrocious (China, SU, Cuba).

              1. That is laughably untrue, especially if you consider universality to be a positive. We pay double per capita for healthcare than other civilized countries that manage to cover everyone.

                The point is that taxes aren’t the only expense people have–and almost everyone has healthcare expenses.

                1. Tony| 3.8.13 @ 7:36PM |#
                  “That is laughably untrue, especially if you consider universality to be a positive. We pay double per capita for healthcare than other civilized countries that manage to cover everyone.”

                  Shithead, how much is cherry-picking paying these days?

                2. Some expenses are more equal than others.

                  1. Billy Cole| 3.8.13 @ 8:23PM |#
                    “Some expenses are more equal than others.”
                    Yeah, like the ones people choose to pay rather than the ones extorted at gunpoint.
                    Shithead loves violence and coercion.

        2. “Patents are bona fide restrictions on what people do. All universal healthcare takes is some taxes to pay for.”

          Uh, and purple unicorns unhinge people’s flakes, too.
          WIH is that supposed to mean?

    2. I mean I get that patents are foundational to capitalism, and that you’re all pro-capitalism, but when you start really applying libertarian logic, you’re not allowed capitalism (since it relies on relatively massive government interventions in order to set up and maintain).

      Patents and government interventions are not “foundational” to capitalism. The only thing that is truly foundational to capitalism are libertarian rights and the contract.

      Which is not to suggest that there isn’t a very strong thread of consistency through generally held libertarian beliefs (whatever you need to believe to justify giant businesses like Monsanto and Pfizer making the most profits they possibly can).

      Go home, troll.

      1. Fuck Natural Law

    3. Libertarians think the government should protect our monopoly over our lives. Where’s the contradiction in believing the government should protect our monopoly over our ideas?

    4. Lots of juicy nuggets for the troll today.

  6. “Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?,”

    For the same reason people would make movies and music and write books without copyright – because you want to and because you can make a lot of money in the short time between release and it being readily available.

    What you can’t do is make a metric shit-ton of money on a single product – you have to *keep* innovating. That kinda sucks for producers but is a net benefit to society. Cpyright and patent were both instituted to benefit society by imposing a slight restriction on the rights of the public to encourage innovation.

    1. Anyone is free to come up with an idea or invention at whatever point they want. But the government then can prevent you from coming up with such an invention just because someone else did it first and was granted a state enforced monopoly, on the grounds that it helps society by (hypothetical and unprovable) encouraging innovation?

      Government, encouraging good values to manifest in society because otherwise it’d never happen? Never heard that one before.

      1. “But the government then can prevent you from coming up with such an invention just because someone else did it first and was granted a state enforced monopoly, on the grounds that it helps society by (hypothetical and unprovable) encouraging innovation?”

        Nope.
        A patent is a license to sue. The government does nothing other than grant that. It does not take action in behalf of the patent holder.
        And for the suit to be successful, it must prove that the ‘infringer’ is profiting by the same idea, not using it.
        You can make yourself an I-thing, use it all day long, and Apple can’t do a damn thing about it.

        1. Nope. Not selling it might limit the damages the patent holder can collect, but if you build it for purposes other than experimentation, you’re still infringing. If they decide to make an example of you to discourage others from diy-ing their invention for their own use, you’re screwed.

    2. Also, this statement is really stretching the definition of “as soon as.” I imagine it would take some time for a person who buys a single seed ? or even many seeds! ? to create “as many as they want.”

      Also, to answer his question: Uhh … competition from other seed companies?

  7. I’m not a patent lawyer, or even a patent, but this whole thing doesn’t sit well with me. It seems like there would be plenty of impetus for developing new seeds ? competition, expanding markets (with drought resistant seeds and such) ? while still allowing farmers to plant seeds gathered from past crops. It also seems like farmers would have incentive to purchase the newest seed offerings every few years (increased yield, lower fertilizer usage, pretty much all the same things that incentivizes a business to make an investment in new equipment/materials).

    If a farmer wants to keep planting his 98 soy beans, and all the other farmers are planting the much sleeker, more aerodynamic 2013 seeds, that first farmer will 1) suffer at the market 2)be less popular with the ladies.

    1. Ideally there should be a short window where a company can make back its money and then some, then it can go public domain

      Right down I think it’s 7 years and another 7 on renewal, which is too long.

    2. I wasn’t convinced until the end. Now you’ve got me hooked.

  8. Wow, supporting copyright laws, we’ve got some REAL libertarians here… i am dissapoint Bayley….

    1. Uh, the anarchist section is off to your right.

  9. “You didn’t devote hundreds or thousands of hours of excruciating cognitive effort, or millions of dollars, into conceptualizing that and bringing it into existence.”

    /Obozo and the leftarians

  10. So if a company creates a genetically modifed and pateneted stem cell string that is implanted into someone with parkinsons, does that cell-line remain the property of said company?

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  14. I just realized this was written in 2002. I wonder what the gun crime rate is now. Any government that tells you that you have no right to self defense is not looking after your best interest. Self defense is the most basic right anyone has. No government or police can protect you. I can’t believe you all allow this to continue. I keep a gun at home for self defense and have a license to carry it concealed any where I go. And I do. If I am attacked then at least I have a chance to stay alive. By the time the police arrive they can either arrange for my body to be picked up or take a statement from me. I choose the later. Britons let a right be taken from them and now it will be much harder to get it back. But you should try.
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