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The Farmer Who Fought Monsanto (Part I)

Thu, 07/11/2013 - 11:16am
Bradley Rademaker, Neal, Gerber & Eisenberg LLP

At first glance, the recent U.S. Supreme Court decision in Bowman v. Monsanto could fairly be described as a ruling in favor of big players in the agriculture market, which prohibits farmers from planting seeds rightfully purchased in the open market. It is a ruling that has created a buzz of concern, and has many in the agriculture and food processing industries wondering what is in store as we push the envelope of genetic modification and optimization of crops and livestock. Some have expressed concerns that patent law is being expanded to support business interests, and others believe that the case may cause a backlash due to fears that business interests prevail over farmers simply planting crops. The reality is that, although the Bowman ruling provides insight into legal issues in the emerging arena of patented seeds and similar “self-replicating products,” it does not create an expansion of patent rights as some fear.

Without consideration of the nuances of patent law at issue, it may appear that the Supreme Court ruling in the Bowman case is going out of its way to protect big business, prohibiting farmers from even growing a seed it rightfully purchased. On the surface, as is evident from numerous Internet blog posts on the subject, it is disturbing to many that farmers are not allowed to grow a plant from purchased seeds, and that this will only result in increased prices for customers and food companies.

There is also concern for where this decision may lead us in the new frontier of genetically engineered foods or ingredients, when patent protection is sought for what the Supreme Court named “self-replicating products.”

To understand the public debate regarding the Bowman case, and anticipate what is down the road for self-replicating products, a few principles of U.S. patent law are important.

First, there is a rule in patent law that a patent owner can only recover for the initial sale of a patented product, and not from subsequent use or sale of the product. This rule of patent law, called the “exhaustion doctrine,” means that a patent owner cannot continue to collect from everyone as a patented product is sold through commerce; after the first sale, the patent owner has exhausted the financial benefit provided by the law with regard to that particular product. For example, when a person buys a product covered by a patent, the patent owner cannot prohibit the resale of that product, nor is the patent owner able to seek damages or a royalty payment for the resale.

Secondly, to understand the landscape of the public debate, there is a general rule in patent law that laws of nature, i.e., that which is naturally occurring in nature, are not proper subject matter for patent protection. Although this was not squarely at issue in the Bowman case and thus not addressed in the ruling, it is significant for understanding the debate regarding the ruling, and the public concern that patent laws are being expanded to cover that which is naturally occurring.

The argument against Monsanto – patent exhaustion

Mr. Bowman was a repeat customer of Monsanto. Each year, he planted an initial crop of seeds purchased from Monsanto, which are said to be “Roundup Ready,” indicating that the soybeans are resistant to a chemical found in weed killer, including the herbicide branded as “Roundup.” As with all of Monsanto’s customers, the Roundup Ready soybeans were sold under a license agreement whereby the farmer agrees to not use the seed to grow crop that is subsequently planted.

If Mr. Bowman had violated that license agreement, the case against him would be one of contract law instead of patent law, and it is doubtful the Supreme Court would have become involved. The patent issues of this case arose because Mr. Bowman decided that, for his second crop of soybeans of the growing season, he would plant soybeans purchased from a local grain elevator, betting that most or all of the soybeans came from harvesting Roundup Ready seed, and thus also would be herbicide resistant. Because Bowman planted seeds purchased from a grain elevator rather than licensed seed, Monsanto asserted patent infringement.

After continuing this for several years, Monsanto asserted patent infringement because Mr. Bowman was recreating that which was patented, the seed resistant to the weed killer glyphosphate. Mr. Bowman’s defense was that, after Monsanto sold its seeds, it no longer had the right to enforce patent rights over the use of those seeds because of the exhaustion doctrine of patent law.

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