In Bowman v Monsanto the Supreme Court requested the opinion of the solicitor general on whether to grant review on two questions:
"Whether the Federal Circuit erred by (1) refusing to find patent exhaustion in patented seeds even after an authorized sale and by (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies?"
In a well-reasoned amicus brief, the solicitor general suggested that the Supreme Court decline to hear the case. However, the court surprised many when, on October 5 2012, it granted review in Bowman against the solicitor general's advice.
The Bowman case involves a seed-purchasing customer's use of a transgenic 'Roundup Ready®' seed variety first invented and developed by Monsanto.(1) Vernan H Bowman, an Indiana farmer, routinely purchased Roundup Ready seeds for his first yearly soybean planting. However, starting in 1999, he also began purchasing commodity soybean seeds from a grain elevator for a second yearly planting. Because more than 90% of soybeans grown in Indiana contain Monsanto's patented technology, the soybean plants grown from Bowman's second yearly planting showed the same herbicide resistance as Roundup Ready soybean seeds. Monsanto investigated and then sued for patent infringement. The district court granted summary judgment of infringement for Monsanto, awarding $84,456.20 in damages.(2)
Bowman appealed, arguing that Monsanto's patent rights were "exhausted" as to commodity seeds after the authorised sale of those seeds in secondary markets. Thus, he contended, he was free to use them in his second yearly planting.(3) The Federal Circuit disagreed, noting that "[a]pplying the first sale doctrine to subsequent generations of self-replicating technology would eviscerate the rights of the patent holder".(4) The court explained that:
"[e]ven if Monsanto's patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like Bowman, plants the commodity seeds containing Monsanto's Roundup Ready® technology and the next generation of seed develops, the grower has created a newly infringing article [that Monsanto never authorised the grower to sell]."(5)
Accordingly, the Federal Circuit affirmed the district court.
Faced with the Federal Circuit's affirmance, Bowman filed a petition for certiorari in the Supreme Court. The court invited the opinion of the solicitor general on whether to grant review. Such requests are widely regarded to be an indication that the Supreme Court has taken an interest in the case. In a well-reasoned amicus brief, the solicitor general recently suggested that the Supreme Court should not grant review. Analogising the case to the law of unlicensed reproduction under copyright law and the repair or reconstruction doctrine under patent law, the solicitor general explained that planting soybean seeds in order to produce additional soybean seeds constitutes not only the permissible "using" of a thing sold, but also impermissible "making" of a newly infringing article. Moreover, the solicitor general cautioned that a finding in favour of Bowman could have unforeseen consequences affecting the enforcement of patents for other "self-replicating" technologies besides seeds, including "man-made cell lines, DNA molecules, nanotechnologies, [and] organic computers". The Supreme Court's decision to grant certiorari and review the Federal Circuit's decision despite the solicitor general's recommendation not to do so is not uncommon, but it does suggest that the court is unhappy with the Federal Circuit's articulation of the law in this area.
Now that it is clear the Supreme Court will hear Bowman, life sciences companies covering novel self-replicating technologies that are (or could be) subject to commercial sales will want to watch this case closely and consider how to protect their inventions should the Supreme Court expand the scope of patent exhaustion in this area.
For further information on this topic please contact Matthew Alan Chivvis, Michael R Ward or Rachel Krevans at Morrison & Foerster LLP by telephone (+1 202 887 1500), fax (+1 202 887 0763) or email ([email protected], [email protected] or [email protected]).