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On the brink of oral argument before the Supreme Court on Tuesday, it may be helpful to reiterate (as do the parties) the arguments from Petitioner Farmer Bowman and Respondent Monsanto, Inc. in Bowman v. Monsanto.
Farmer Bowman reprises his argument that the sale of the patented seed exhausts any future rights to the progeny of those seeds. The first part of this argument focuses on authorized uses, sales and offers to sell, where he argues (not necessarily incorrectly) that an authorized sale from patentee exhausts patent rights to the seed. Ignoring the Technology Agreement issues for a moment, it is certainly true that, had Farmer Bowman purchased seed from Monsanto and then decided not to plant it, he could have resold those seeds to another farmer. That, of course, is not the scenario before the Court in this case. This portion of the brief explicates for the Court its own jurisprudence on patent exhaustion from the 19th Century to date, and focuses on the Federal Circuit's Mallinckrodt v. Medipart line of cases to strengthen the Court's perception that there is an error below requiring correction.
Somewhat surprisingly, the brief concedes that, in some circumstances patentees may enter into licensing agreements enforceable under patent law, but consistent with the rest of his argument, Farmer Bowman contends that such restrictions cannot be enforced on authorized purchasers. "Any" seeds purchased in such an authorized sale have had all patent rights exhausted according to Farmer Bowman in the first section of his brief.
These principles of exhaustion also apply to seeds produced as the result of planting, i.e., progeny seeds. Analogizing (somewhat inappositely) to statements in the Supreme Court's Quanta Computer v. LG Electronics decision, Farmer Bowman contends that "like method claims, subsequent generations of seeds are 'embodied' in seeds sold" in authorized sales. While appealing in a 15th Century way (bringing to mind Pythagoris, preformationism and myths such as homunculi and others), the brief then uses this argument to support Farmer Bowman's contention that replanting seeds is not "making" but is rather an authorized use and thus an exhaustion of Monsanto's patent rights. This relationship then vests "title" in progeny seeds to the first authorized purchaser, and any decision otherwise would amount to a restraint on the alienation of personal property. The scope and reach of these arguments is breathtaking in its inclusion of perhaps every argument that could be made, once its proponents go down the rabbit hole of their premise (that each seed literally embodies every other seed that can ever be produced from that seed).
Finally, the brief goes back to the theme, developed in the Questions Presented, that the Federal Circuit created an "exception" to the patent exhaustion doctrine for "self-replicating technologies." Its inclusion late in the brief may be an admission by Farmer Bowman that this argument does not comport with the facts, as set forth in the Federal Circuit's opinion, Monsanto's brief, and the government's amicus brief. No matter how inclined the Federal Circuit has been to carve out what the Supreme Court has decided are "special" rules for patent cases (and which rules the Court has been happy to strike down), that is not what the Federak Circuit did in this case. In this abbreviated version of this argument, Farmer Bowman contends simply that any such "changes" in the patent exhaustion doctrine should come from Congress, or be left to contractual arrangements between patentees and parties in privity through sales of inventions comprising "self-replicating technologies. (But of course Farmer Bowman's intentions are not to help patentees to protect their technology, but rather to expose such contractual avenues to antitrust scrutiny.)
Monsanto's brief begins with a recitation of Monsanto's patented technology, the Technology Agreement, the "Petitioner's Conduct" (including the purported illegality of purchasing commodity seeds from grain elevators for replanting) and what transpired below. Turning to its arguments, Monsanto contends that sales, even "authorized" sales, do not exhaust patent rights to the extent argued by Farmer Bowman. As an initial matter, Monsanto argues that the "first sale" doctrine of patent exhaustion is inapplicable to Farmer Bowman's conduct because the seeds had not been sold. Thus, Monsanto rejects Farmer Bowman's predicate that there was an authorized sale and consequently that patent exhaustion does not apply.
The brief also discusses the relationship between patent law and laws specifically relating to plant protection (specifically the Plant Protection Act and the Plant Variety Protection Act), and argues that the Court should not thwart the Congressional statutory scheme and the Court's own precedent relating to protections for technological innovation in plants. The brief specifically cautions the Court against itself creating "exceptions" that would disfavor biotechnological innovation.
The brief also broaches the more risky grounds of the extent to which a patentee can convey limited rights to embodiments of a patented invention. The brief parses out the various rights in the patentee's bundle of rights (making, using, selling) and asserts the patentee's right to convey less than the entirety of the bundle, and reminds the Court that is has "never held that a sale per se renders unenforceable reasonable restrictions imposed by a license" (running the risk that this Court will take up the challenge and do just that). Arguing against this eventuality, the brief contends that any such per se rule would harm both the patent law and the exhaustion doctrine. Finally, and in the briefest section of Monsanto's brief, Monsanto argues that contractual remedies by themselves are inadequate to protect and therefore encourage innovation in "readily reproducible" technologies.
In his reply brief, Farmer Bowman identifies another basis for patent exhaustion, asserting that an authorized sale exhausts rights to using the article soled for the ordinary pursuits of life. It characterizes Monsanto's arguments as an attempt to "control post-sale use and disposition of seed," which it asks the Court to reject, and urges the Court to prevent Monsanto from suppressing a "cheaper, non-infringing source of seed." The brief rejects Monsanto's characterization of the PVPA and the Court's precedent interpreting the Act, and asserts that Monsanto (and "its" amici) have "overstate[d] the economic impact of patent exhaustion for self-replicating products."
Patent Docs will provide an assessment of the oral argument in due course.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© McDonnell Boehnen Hulbert & Berghoff LLP
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