Bowman v. Monsanto Co. (2013)

by McDonnell Boehnen Hulbert & Berghoff LLP
Contact

MonsantoToday, in Bowman v. Monsanto Co., the Supreme Court determined that the doctrine of patent exhaustion did not permit a farmer who buys patented seeds to repro­duce them through planting and harvesting without the patent holder's permission, affirming the Federal Circuit's decision that such activities amount to the creation of a newly infringing article.  Writing for a unanimous Court, Justice Kagan begins a concise 10-page opinion by noting that "[u]nder the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any sub­sequent owner, a right to use or resell that article," but that such sale "does not allow the purchaser to make new copies of the patented invention."

Roundup Ready SoybeansThe case arose as the result of a farmer (Mr. Bowman) replanting Monsanto's patented Roundup Ready® seed.  Mr. Bowman had purchased the seed from one of Monsanto's licensed seed producers, with the sale being subject to a Technology Agreement that permitted Mr. Bowman to, inter alia, "use the seed containing Monsanto gene technologies for planting a commercial crop only in a single season" and "not save any crop produced from this seed for replanting, or supply saved seed to anyone for replanting."  While Mr. Bowman complied with these provisions with respect to a first planting, Mr. Bowman used cheaper "commodity seed" (i.e., seed obtained from local grain elevators) in a second planting.  After planting the commodity seed, Mr. Bowman tested the second crop for Roundup® resistance, and found that substantial amounts of the seed were resistant.  He then used Roundup® on these plantings and replanted this seed.  The District Court granted summary judgment of patent infringement and entered judgment against Mr. Bowman, and the Federal Circuit affirmed (see "Monsanto Co. v. Bowman (Fed. Cir. 2011)").

With regard to Mr. Bowman's argument that the doctrine of patent exhaustion prevented Monsanto from controlling his use of soybeans he obtained from the grain elevator be­cause they were the subject of a prior authorized sale (i.e., from local farmers to the grain elevator), Justice Kagan counters that "the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto's permission" (emphasis in opinion).  Noting that the exhaustion doctrine restricts a patentee's rights only as to the particular article sold, the opinion indicates that the doctrine "leaves untouched the patentee's ability to prevent a buyer from making new copies of the patented item."  Justice Kagan explains that:

[This] is because the patent holder has "received his reward" only for the actual article sold, and not for subsequent recreations of it.  . . .  If the purchaser of that article could make and sell endless copies, the patent would effectively protect the invention for just a single sale.  Bowman himself disputes none of this analysis as a gen­eral matter:  He forthrightly acknowledges the "well set­tled" principle "that the exhaustion doctrine does not extend to the right to 'make' a new product."

"Unfortunately for Bowman," the opinion continues, "that principle decides this case against him."  As Justice Kagan notes, Mr. Bowman "took the soybeans he purchased home; planted them in his fields at the time he thought best; applied glyphosate to kill weeds (as well as any soy plants lacking the Roundup Ready trait); and finally harvested more (many more) beans than he started with."  Therefore, because Mr. Bowman reproduced Monsanto's patented invention, the opinion concludes that the ex­haustion doctrine does not protect him.

The opinion demonstrates an appreciation of the impact Mr. Bowman's activities would have on Monsanto if such activities were found to be protected under the exhaustion doctrine:

[I]n short order, other seed companies could reproduce the product and market it to growers, thus depriving Mon­santo of its monopoly.  And farmers themselves need only buy the seed once, whether from Monsanto, a competitor, or (as here) a grain elevator.  The grower could multiply his initial purchase, and then multiply that new creation, ad infinitum -- each time profiting from the patented seed without compensating its inventor.

With regard to Mr. Bowman's argument that he was merely using the Roundup Ready® seeds in the normal way that farmers do -- by planting them -- and that by interfering with that use, Monsanto was creating an impermissible exception to the exhaustion doctrine for patented seeds and other self-replicating technologies, Justice Kagan notes that "it is really Bowman who is asking for an unprece­dented exception -- to what he concedes is the 'well settled' rule that 'the exhaustion doctrine does not extend to the right to 'make' a new product."  Returning to the impact of Mr. Bowman's activities on Monsanto, the opinion states that:

[O]nce again, if simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention.  The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction.  And that would result in less incentive for innovation than Congress wanted.  Hence our repeated insistence that exhaustion applies only to the particular item sold, and not to reproductions.

Justice Kagan concludes the opinion, however, by noting that the Court's holding "is limited -- addressing the situation before us, rather than every one involving a self-­replicating product."  She adds that:

We recognize that such inventions are becoming ever more prevalent, complex, and diverse.  In another case, 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.  . . .  We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances.

Bowman v. Monsanto Co. (2013)
Opinion of the Court by Justice Kagan

 

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 | Attorney Advertising

Written by:

McDonnell Boehnen Hulbert & Berghoff LLP
Contact
more
less

McDonnell Boehnen Hulbert & Berghoff LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.