In a closely watched case, the U.S. Supreme Court decided unanimously that Indiana farmer Vernon Bowman infringed on Monsanto’s patent for “Roundup Ready” soybean seeds when he bought second generation patented soybean seeds and planted and harvested them without Monsanto’s permission.
The ruling, which concurred with lower court decisions, could have had broad ramifications not just for the agricultural biotech industry, but also for diagnostics, therapeutics, and other sectors that make use of stem cells, vaccines, transgenic bacteria, and other patented self-replicating organisms.
Bowman’s defense focused on the doctrine of “patent exhaustion.” The court has previously said that “the initial authorized sale of a patented article terminates all patent rights to that item.” But the Supreme Court found that Bowman didn’t have standing under the doctrine because the basis for the infringement wasn’t the seeds that he bought, but the third generation of seed he produced.
“The Supreme Court said we don’t even have to think about patent exhaustion,” says Michael Belliveau, an intellectual property attorney and partner at the law firm Clark + Elbing in Boston. “All we have to ask is the question, ‘are the new seeds infringing?’”
In the ruling, Justice Elena Kagan writes “the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission (either express or implied). And that is precisely what Bowman did.”
Many observers who had heard the oral arguments in early March felt the justices would find in favor of Monsanto. What was of interest, however, was how narrow or broad the scope of the decision would be, according to Michael Ward, partner and chair of the patent practice group for the law firm Morrison & Foerster.
“Our holding today is limited—addressing the situation before us, rather than every one involving a self-replicating product,” wrote Justice Kagan. “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.”
While the Justices say they are just talking about seeds, the ruling was celebrated by the life sciences industry because it is seen as providing broader patent protection for companies that develop self-replication technologies.
May 16, 2013