What is in this article?:
- Supreme Court Reviewing Important Ag Biotech Patent Case
- Patents vs. License
Patents vs. License
But what about "self-replicating" products such as soybeans? If I buy a bag of soybean seeds from the seed dealer, I obviously intend to plant them and create more seeds – that is, after all, the point of farming. Yet the readers of farmdoc certainly understand that farmers cannot save and replant soybean seeds year to year. And what about the First Sale Doctrine? Would that not allow the purchaser of the seed to make whatever use they want of the seed pre- or post-harvest similar to the patented chair example?
The answer, at least under current law, is no. In simplest terms, one does not "buy" the patented seeds, but rather purchases a license from the patent holder to use the patented technology embedded in the seed itself. This is a limited-use license that places restrictions on the license holder's use of the seed, e.g., no saving seed for replanting the next growing season. This is a well settled area of law as multiple courts have upheld limited use licenses that restrict seed saving. See Monsanto Co. v. McFarling, 363 F.3d 1336 (Fed. Cir. 2004); Monsanto Co. v. Scruggs, 459 F.3d 1328 (Fed. Cir. 2006).
What has the agricultural law community talking, however, is the planting of seeds not "saved" by the farmer from the previous growing season, but rather the purchase of soybeans from a grain elevator (known as "commodity seed") and the subsequent planting of those seeds. The seeds were "sold" by the original farmer to the grain elevator without restriction, and thus the question is whether the prohibition against planting commodity seeds applies to the subsequent farmer.
A federal trial court in Indiana, as well as the Court of Appeals for the Federal Circuit in Washington, DC, ruled in favor of the patent holder--Monsanto. See Monsanto Co. v. Bowman, 657 F.3d 1341 (Fed. Cir. 2011). The court avoided applying the First Sale Doctrine, holding that even if the patent rights in the commodity seed are exhausted by the authorized sale to the grain elevator, once the second farmer plants the commodity seed containing the patented technology and the next generation of seed develops, this farmer has in essence recreated the patented item without permission from the patent owner – a type of patent infringement somewhat similar to the example described above of building copies of the patented chair. See id. at 1347-48.
In many respects, the Court of Appeals' ruling in Bowman last year conformed with the general understanding of how patent law applies to agro-biotechnology and generated little discussion. So why would the U.S. Supreme Court, especially in light of the thousands of petitions for cert it receives each year, decide to look further into this particular case? Are the justices looking to solidify intellectual property protection for self-replicating patented products such as seeds? Or do they think intellectual property rights may have "gone too far" and that post-sale restrictions included in technology use agreements need to be scaled back?
The Supreme Court has not yet set a date for oral argument and briefs by the parties are due to the Court over the next two months. Until the Court rules, however, one can only speculate if or how the intellectual property rules may change with respect to genetically engineered seeds. At this point one thing is clear – a reversal by the Supreme Court and narrowing of intellectual property rights could have a significant impact on agricultural innovation and production practices. What this would mean for the agricultural community with respect to productivity and farm overall profitability is an even longer-term question.