Soybeans and Patents: Bowman v. Monsanto

On October 5, 2012, the Supreme Court of the United States ("SCOTUS") granted an Indiana farmer's petition for transfer to hear a case regarding whether the lower court erred by (1) refusing to find patent exhaustion in patented soybean seeds even after an authorized sale and (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies.  The case, Vernon Hugh Bowman v. Monsanto Company et al., 11-796 (more information on this case at the SCOTUS is available at this link), originated in the U.S. District Court of the Southern District of Indiana.  The district court granted Monsanto's motion for summary judgment (Judge Young's opinion is available here) and the Federal Circuit Court affirmed that judgment.

The Indiana farmer planted two soybean crops in 2007: the first was of Pioneer Hi-Bred beans (a Monsanto brand), and a later crop of commodity beans from his local elevator.  The farmer discovered that neither brand of seed was damaged by a particular herbicide.  He was able to save some of the second crop to plant in later years.  Monsanto sued the farmer, claiming that it had developed and patented the biotechnology that made the Pioneer Hi-Bred beans resistant to herbicide (these were called "Roundup Ready" (R) seeds).  Monsanto argued the farmer signed a licensing agreement that included a provision that meant the company's patent rights were not exhausted.  The farmer disagreed, claiming that when beans from a licensed Roundup Ready (R) are harvested and sold to a grain elevator, they are sold without restriction, mixed with all other soybean crops from the area, and therefore, when farmers purchase those beans later to use as seed, the beans are not protected by patent.

After the district court granted Monsanto's motion for summary judgment, the Federal Circuit Court affirmed and relied in part on the "conditional sale exemption" that allows patent holders to continue to assert patent rights after an authorized sale is correct.  Now in front of the SCOTUS, the farmer argues that patent exhaustion results after an authorized sale.  As explained by the farmer: "[t]his case presents an issue both of core practical important to agriculture and of vital legal interest in patent law..."  Brief in Support of Certiorari, available here.  The importance of this case, and of seed patent rights, is especially apparent in a drought year, like the one we are currently having here in the Hoosier state.  (Soybean harvest is well underway in Indiana.)

The United States has filed an amicus brief in favor of Monsanto, available here.  As of October 22, 2012, oral argument in the case was to be determined.