Monsanto Wins Case on Genetically Altered Soybeans

WASHINGTON – The Supreme Court ruled unanimously on Monday that farmers
could not use Monsanto’s patented genetically altered soybeans to create new
seeds without paying the company a fee.

The ruling has implications for many aspects of modern agriculture and for
businesses based on vaccines, cell lines and software. But Justice Elena
Kagan, writing for the court, emphasized that the decision was narrow.

“Our holding today is limited — addressing the situation before us, rather
than every one involving a self-replicating product,” she wrote. “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.”

But Justice Kagan had little difficulty ruling that an Indiana farmer’s
conduct in the case before the court, Bowman v. Monsanto Company, No.
11-796, had run afoul of the patent law.

Farmers who buy Monsanto’s patented seeds must generally sign a contract
promising not to save seeds from the resulting crop, which means they must
buy new seeds every year. The seeds are valuable because they are resistant
to the herbicide Roundup, itself a Monsanto product.

But the Indiana farmer, Vernon Hugh Bowman, who had signed such contracts
for his main crop, said he had discovered a loophole for a second, riskier
crop later in the growing season.

For that second crop, he bought seeds from a grain elevator filled with a
mix of seeds in the reasonable hope that many of them contained Monsanto’s
patented Roundup Ready gene.

Seeds from grain elevators are typically sold for animal feed, food
processing or industrial uses. But Mr. Bowman planted them and sprayed them
with Roundup. Many of the plants survived, and he saved seeds for further
plantings.

Monsanto sued, and a federal judge in Indiana ordered Mr. Bowman to pay the
company more than $84,000. The United States Court of Appeals for the
Federal Circuit, which specializes in patent cases, upheld that decision,
saying that by planting the seeds Mr. Bowman had infringed Monsanto’s
patents.

Justice Kagan agreed, suggesting that Mr. Bowman’s gambit had been too
clever by half.

Mr. Bowman’s main argument was that a doctrine called patent exhaustion
allowed him to do what he liked with products he had obtained legally. But
Justice Kagan said it did not apply to the way he had used the seeds.

“Under the patent exhaustion doctrine, Bowman could resell the patented
soybeans he purchased from the grain elevator; so too he could consume the
beans himself or feed them to his animals,” she wrote.

“But the exhaustion doctrine does not enable Bowman to make additional
patented soybeans without Monsanto’s permission,” she continued, “and that
is precisely what Bowman did.”

Justice Kagan said that allowing Mr. Bowman’s tactic would destroy the value
of Monsanto’s patent. “The exhaustion doctrine is limited to the ‘particular
item’ sold,” she wrote, “to avoid just such a mismatch between invention and
reward.”

Mr. Bowman acknowledged the general principle that he had no right to make a
new product with Monsanto’s seeds. But he said he had used the seeds
precisely as they were intended to be used – planting them “in the normal
way farmers do,” Justice Kagan wrote.

Accepting that theory, she wrote, would create an “unprecedented exception”
to the exhaustion doctrine. "If simple copying were a protected use," she
wrote, "a patent would plummet in value after the first sale of the item
containing the invention."

Mr. Bowman also argued in his briefs to the court that soybeans naturally
“self-replicate or ‘sprout’ unless stored in a controlled manner,” meaning
that “it was the planted soybean, not Bowman,” that created the new seeds.

Justice Kagan rejected what she called “that blame-the-bean defense.”

“Bowman was not a passive observer of his soybeans’ multiplication,” she
wrote. “Put another way, the seeds he purchased (miraculous though they
might be in other respects) did not spontaneously create eight successive
soybean crops.”

“It was Bowman, and not the bean,” she wrote, “who controlled the
reproduction (unto the eighth generation) of Monsanto’s patented invention.”

By ADAM LIPTAK
Published: May 13, 2013