U.S. Supreme Court No. 11-796
May 13, 2013
Unanimous opinion delivered by J. Kagan
Brief summary: The doctrine of patent exhaustion did not exempt farmer who reproduced patented seeds through planting and harvesting from infringement of Monsanto’s patents.
Summary: The US Supreme Court decided that “a farmer who buys patented seeds” may not “reproduce them through planting and harvesting without the patent holder’s permission”. At issue in this case were two Monsanto patents (US 5,352,605 and RE39,247E) relating to herbicide (glyphosate)-resistant seeds (Roundup Ready soybeans) and the related licensing agreement. Under the agreement, “the farmer may not save any of the harvested soybeans for replanting, nor may he supply them to anyone else for that purpose” (e.g., each season’s seeds must be bought from Monsanto). Mr. Bowman would undertake two plantings each year. The first crop was produced using seed purchased from a Monsanto affiliate. The second was produced using “commodity soybeans” purchased from a grain elevator (not owned by Monsanto) that were intended for human or animal consumption. The commodity soybeans contained seed from local farmers which Bowman “could anticipate…would contain Monsanto’s patented technology”. Bowman sprayed both crops with a glyphosate-based herbicide, confirming that the plants of the second crop were also herbicide-resistant. Monsanto sued Bowman for infringing its patents and was awarded $84,456 by the DC. This decision was affirmed by the CAFC because “patent exhaustion did not protect [him] because he had ‘created a newly infringing article'”. The US Supreme Court affirmed the CAFC decision under Quanta Computer (553 U.S. 617, 625 (2008)) because the doctrine of patent exhaustion “restricts a patentee’s rights only as to the ‘particular article’ sold” but “leaves untouched the patentee’s ability to prevent a buyer from making new copies of the patented item” (e.g., purchaser of patented machine does not acquire any right to make another machine). Here, Bowman could have resold or eaten the soybeans (either the first or second crop) but could not “make additional patented soybeans without Monsanto’s permission (either express or implied)” as he did. The Court contrasted a patent right with a right under the Plant Variety Protection Act (PVPA) (citing J.E.M. Ag Supply, US 2001), pointing out that “only a patent holder (not a certificate holder) [can] prohibit ‘a farmer who legally purchases and plants’ a protected seed from saving harvested seed ‘for replanting'” (PVPA has “no exemptio[n] for ‘saving seed'”). It also noted that, in some cases, an “article’s self-replication might occur outside the purchaser’s control” or “might be a necessary but inicidental step in using the item for another purpose” (e.g., making a copy of a computer program where a copy is essential to using it) which may provide a different result under the doctrine of patent exhaustion. Neither of those situations were relevant here, however, and the CAFC decision was affirmed.