Monsanto Win and Implications for the Patent Exhaustion Doctrine


On May 13, 2013, the United States Supreme Court ruled in favor of Monsanto, finding that a farmer's unauthorized copying of Monsanto's genetically modified soybean seed infringed Monsanto's patent.

Writing for a unanimous court, Justice Kagan stated:

"The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder's permission. We hold that he may not."

Monsanto invented and patented a genetically modified soybean seed, known as Roundup Ready soybean seed. The genetic alteration allowed the seed to survive exposure to the herbicide, glyphosate, which is contained in the product Roundup Ready, also produced by Monsanto.

According to the opinion, farmers can purchase the Roundup Ready soybean seed, but only if they agree to the terms of a licensing agreement. The agreement permits a grower to plant the purchased seeds in only one season, and the resulting crop may be consumed or sold. Importantly however, the farmer may not save any of the harvested soybeans for replanting, nor may the farmer supply them to anyone else for that purpose. Under this framework, farmers had to purchase new seeds from Monsanto every season.

The farmer in this case, Bowman, did purchase the soybean seed for the first of each season from a company associated with Monsanto and he did follow the terms of the licensing agreement with respect to that purchase. For the late season, though, he deviated from this practice and bought seeds, intended for consumption, from a grain elevator. Bowman planted the seeds, and treated the plants with the herbicide. The resulting plants that were not killed by the herbicide were saved by Bowman for use in his late-season planting the next season.

Monsanto then sued Bowman for patent infringement. The District Court and Federal Circuit Court found in favor of Monsanto.

Patent Exhaustion Doctrine

Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any sub¬sequent owner, a right to use or resell that article.

In other words, when a person buys a product protected by a patent, the person then has the right to use or resell that article. "[T]he sale confers on the purchaser, or any subsequent owner, "the right to use [or] sell" the thing as he sees fit. Bowman relied on this doctrine, arguing that he had legally purchased the seeds, and Monsanto could not control his use of them.

Justice Ginsburg rejected Bowman's theory, holding that the doctrine of patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder's permission.

"If the purchaser of that article could make and sell endless copies, the patent would effectively protect the invention for just a single sale." But that is not the case; "the exhaustion doctrine does not extend to the right to 'make' a new product."

There were many things Bowman could do with the seeds he purchased, wrote Ginsburg: he could resell the seeds, he consume them himself, or feed them to his animals.

"But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto's permission."

Justice Ginsburg reasoned that if Bowman, or any other farmer, was not prevented from making additional patented soybeans without Monsanto's permission, then the patent would provide Monsanto with little to no benefit, because any protection would be gone after the first sale, rather than the 20 years provided by the Patent Act.

The facts of the case were also extremely unhelpful to Bowman's legal argument, as the seeds at issue were ones intended for consumption, and not for planting.

Blame the Bean Defense

Bowman's final Hail Mary was to argue that soybeans seeds naturally "self-replicate" and thus it was the beans, and not Bowman himself who was to blame. Ginsburg quickly dispensed of this argument: "we think that blame-the-bean defense tough to credit. Bowman was not a passive ob¬server of his soybeans' multiplication; or put another way, the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops."

Implications for the Patent Exhaustion Doctrine

This decision clearly has implications beyond just genetically modified soybean seeds, as technology and invention continually evolve and progress.

Noting that self-replicating products are "becoming ever more prevalent, complex and diverse," Justice Ginsburg recognized that scenarios will likely develop (if they do not exist already) that will prove challenging for the patent exhaustion doctrine as it stands today. A product's self-replication might occur outside the purchaser's control, or there might be a necessary but incidental step in using the item for another purpose, she wrote, comparing copyright infringement law that allows an owner of a copy of a computer program to make another copy of that program provided that such a new copy or adaptation is created as an essential step in the utilization of the com¬puter program.

However, this opinion was narrow, she warned, and did not address the question of whether the doctrine of patent exhaustion would apply in such circumstances.

Those are arguments for another -- likely not too distant -- day.

The case is Bowman v. Monsanto, Case No. 11-796.


Anne O'Donnell is a recovering litigator who is now currently a Senior Writer for legal professional content at FindLaw.com. She practiced for 10 years in civil litigation in San Francisco.