Posted:  May 13, 2013

On Monday, May 13, the United States Supreme Court issued its ruling in Bowman v. Monsanto Co., et al., decision that will reverberate throughout the continued debate over the role of genetically modified organisms in agriculture.  The Court ruled unanimously in favor of Monsanto Company, holding that patent exhaustion does not permit Indiana farmer Vernon Bowman and other farmers to reproduce patented seeds through planting and harvesting without the patent holder’s permission. A copy of the ten page slip opinion is available here.

According to a USA Today article covering this story, “[t]he court ruled unanimously that an Indiana farmer violated Monsanto’s patent on genetically modified soybeans when he culled some from a grain elevator and used them to replant his own crop in future years.”

In its decision, Justice Elena Kegan wrote that:

. . . [I]f simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction. And that would result in less incentive for innovation than Congress wanted. Hence our repeated insistence that exhaustion applies only to the particular item sold, and not to reproductions.

While the decision will have far-reaching implications, Justice Kegan indicated that the decision was limited and not intended to address every situation that involves a self-replicating product.  Along these lines, the decision concludes with the following:

Our holding today is limited—addressing the situation before us, rather than every one involving a self-replicating product. 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. . . . .We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances. In the case at hand, Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article. Patent exhaustion provides no haven for that conduct. We accordingly affirm the judgment of the Court of Appeals for the Federal Circuit.