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July 22, 2014

Supreme Court Decides Bowman v. Monsanto for Monsanto

On May 13th, a unanimous Court found that the doctrine of patent exhaustion “does not allow the purchaser to make new copies of the patented invention.” [A copy of decision is at the end of this post.] In this case, the patented invention was a soybean seed obtained from a plant that had been genetically altered so that it is resistant (“survives exposure”) to the herbicide glyphosate. I know that this is “yesterday’s news” by now, but I need a break from plumbing the depths of CLS v. Alice, so I thought I would offer a few observations. (I also did posts when the Fed. Cir. ruling came down, when the Supreme Court granted cert. and when oral argument was heard.)

At least this was a “patent friendly” decision, and the Court even spent some time discussing its relationship with J.E.M. v. Pioneer Hi-Bred, 534 U.S. 124 (2001) in which a divided Supreme Court held that utility patents were available for plants, despite the protections offered by Plant Variety Protection Act Certificates (PVPA certificates). Slip op. at 7. In that decision, the Court held that “only a patent holder (not a certificate holder) could prohibit ‘[a] farmer who legally purchases and plants’ a protected seed from saving harvested seed ‘for replanting’…(noting that the Patent Act, unlike the PVPA contains ‘no exemptio[n]’ for ‘saving seed’).”

Justice Kagen continued: “That statement is inconsistent with applying exhaustion to protect conduct like Bowman’s. If a sale cut off the right to control a patented seed’s progeny, then (contrary to J.E.M.) the patentee could not prevent the buyer from saving harvested seed [to replant a second crop]….Those limitations would turn upside-down the statutory scheme J.E.M. described.”

Although I don’t know whether or not any of the Justices or their clerks visit patents4life, I was gratified to see that the opinion cited and discussed Aro Mfg. Co. v. Convertible Top Replacement, 366 U.S. 336 (1961), which I discussed in my post of February 20th, and even quoted from the part of the decision that I quoted; “[A] ‘second creation’ of the patented item ‘call[s] the monopoly, conferred by the patent grant into play for a second time.”

It was also gratifying that the Court rejected two “natural phenomenon”-type arguments put forward by Bowman: (1) He should have the right to “use” the transgenic seeds “in the normal way farmers do”; that is, to raise a crop that effectively multiplies the original number of seeds that was purchased and (2) It was the planted soybean, not Bowman himself, that made the infringing replicas of Monsanto’s patented invention.

As to the first argument, Justice Kagen noted that such use would cause “[t]he undiluted patent monopoly [to] extend not for 20 years (as the Patent Act promises), but only for one transaction.” Slip op. at 8. Justice Kagan called the latter position a “blame-the-bean defense,” and noted that it was Bowman who devised and executed a novel way to harvest crops from Roundup Ready seeds [that he bought from a soybean elevator operator] without paying the usual premium….it was Bowman, and not the bean who controlled the reproduction (unto the eighth generation) of Monsanto’s patented invention.” Slip op. at 9-10.

Since this is a biotech/pharma blog, I must note that the decision closes with a disclaimer: “Our holding today is limited – addressing the situation before us, rather than every one involving a self-replicating product….the article’s self-replication might occur outside the purchaser’s control. Or it might be a necessary but incidental step in using the item for another purpose.” I will leave it to your imaginations to come up with some examples in the life sciences area.

© 2014 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

About the Author

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Warren Woessner is a registered patent attorney and a founding shareholder of Schwegman, Lundberg & Woessner. His practice focuses on chemical patent law, including biotechnology, pharmaceuticals, vaccines, medical treatments, diagnostics, and biofuels and agricultural chemistry, including related opinion and licensing matters.

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