If Patented Technology Can Copy Itself, When Do Patent Rights Cease?

by Ballard Spahr LLP

Patent rights in a patented self-replicating technology, such as seeds, continue until the patent term is ended and not before. On May 13, the U.S. Supreme Court ruled in Bowman v. Monsanto that the patent rights in seeds are not exhausted by the initial sale of the seeds, and continue to prohibit copying of the original seeds.

The Court declined, however, to address self-replicating technology that replicates outside of the purchaser’s control, or technology that is copied as an intermediary and necessary step in a method of its use. Though limited, the case provides additional protection for patented biotechnological products such as seeds, cells, bacteria, viruses, and other patented organisms that can make multiple copies of themselves. Sale of such self-replicating technologies does not provide the opportunity for a purchaser to make unlimited copies, no matter how easily those copies can be produced.

A patent gives its holder the right to exclude others from making, using, selling, or offering to sell the patented invention. But there are limits to a patentee's ability to enforce these rights. Under the doctrine of patent exhaustion, the initial authorized sale of a patented item terminates all patent rights to that item. The buyer can then use or sell the item in whatever way he or she wishes. The doctrine is based on the idea that the patentee received “just compensation” for his invention from the first authorized sale.

But while the patentee relinquished the right to control the use of a patented article by selling it, the sale did not authorize the purchaser to make a newly infringing article. If the buyer could make copies of the patented invention and sell them, the patentee would not be receiving the “just compensation,” and patent rights would provide “scant benefit” to a patentee.

When soybean seeds are planted, the resulting plants make new soybeans that have genetic traits of the originally planted soybean seeds. These soybean seeds are “self-replicating” and are easily copied when farmers plant them and harvest the resulting crop of soybeans. The soybean seeds in Bowman were genetically modified to be resistant to glyphosate herbicides such as the commonly used Roundup® weed-killer product. Since 1996, Roundup Ready® (glyphosate-resistant) soybean seeds have been sold to farmers for planting, and the purchasers could only use the soybean seeds in a single growing season to produce one crop. The purchasers could consume or sell the crop, but could not replant the soybeans.

Vernon Bowman, an Indiana farmer, purchased Roundup Ready® soybean seeds each year for his first crop of the season. He sold the crop to a grain elevator where soybean seeds from large numbers of farmers are stored in silos for use as feed. For his second, riskier crop of the year, he purchased the mixed seeds from the grain elevator and planted them. He treated the fields with glyphosate, which would kill all the plants that did not have the glyphosate-resistant gene. The soybean plants that did have the patented glyphosate resistance continued to grow. The farmer saved seeds from the second crop and planted the saved seeds the following year as his second crop, occasionally adding more soybeans from the grain elevator.

After discovering the farmer’s practice, Monsanto sued him for patent infringement in the Southern District of Indiana. Both the district court and the U.S. Court of Appeals for the Federal Circuit determined that the subsequent generations of seeds constituted "newly infringing articles" and found that the farmer infringed the patents. The Supreme Court upheld this finding and ruled that patent exhaustion did not apply to the soybean seeds that the farmer bought.

The Court found that the authorized sale of the seeds gave the buyer the right to use or sell the seeds, but did not give the buyer the right to make new copies of them. One argument Bowman made was that he didn’t make the copies, the seeds made the copies. The “blame-the-bean” argument did not carry weight with the Court, which found that the copies existed as a result of action taken by the farmer—planting the seeds and tending the resulting plants.

Members of Ballard Spahr’s Intellectual Property Department help inventors and businesses develop, commercialize, and protect their inventions and innovations. With 14 Ph.D.s, one M.D., and one Pharm.D., our intellectual property professionals are attorneys, scientists, and engineers with specialized knowledge in a variety of scientific and technical fields.

For more information, please contact Mary Anthony Merchant, Ph.D., at 678.420.9428 or merchantm@ballardspahr.com, or Matthew R. Weaver at 215.864.8254 or weaverm@ballardspahr.com.

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.

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