The U.S. Court of Appeals for the Federal Circuit upheld a district court judgment against a farmer (Vernon Hugh Bowman), finding that he infringed Monsanto’s patents for Roundup Ready herbicide-resistant soybean seeds.  Monsanto Co. v. Bowman, Case No. 10-1068 (Fed. Cir., Dec. 21, 2010) (Linn, J).

Bowman purchased commodity seed containing Roundup Ready seeds from one of Monsanto’s licensed seed producers, used it for planting and then saved and replanted the seeds he harvested.  All sales to growers, whether from Monsanto or one of its licensed producers, are subject to a standard form limited use license.  Under the license agreement, growers who buy the seeds can only use them for one crop season and cannot replant the progeny of the licensed seeds.

Monsanto sued Bowman for infringing two of its patents directed to Roundup Ready seeds.  Representative claims from the patents at issue cover a chimeric gene, a plant cell, a recombinant double-stranded DNA molecule, a seed of the plant, a plant and a method for selectively controlling weeds in a field.  Bowman did not dispute that he saved the seed harvested from his second-crop for replanting additional second-crops in later years and had candidly explained his practices in various correspondence with Monsanto’s representatives before the lawsuit.

Bowman argued that Monsanto’s patent rights on Roundup Ready seeds were exhausted with respect to all seeds that are present in grain elevators as undifferentiated commodity.  Monsanto countered, and the Federal Circuit agreed that the patent rights were not exhausted because the license agreement for the seeds specifically states that the progeny of licensed seeds can never be sold for planting.  The Court found that even if Monsanto’s patent rights in the commodity seeds were exhausted, it is of no consequence once a grower, such as Bowman, plants the commodity seeds containing Roundup Ready technology and the next generation of seed develops, because the grower has created a newly infringing product.

The Court concluded that the right to use patented technology upon purchase does “not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee,” citing Jazz Photo Corp.  The Court applied the “substantial embodiment” test with regard to separate generations of seed, stating that present seed does not “substantially embody” “all later generation seeds,” because with regard to the commodity seeds “nothing in the record indicates that the ‘only reasonable and intended use’ of commodity seeds is for replanting them to create new seeds,” and noting that other uses for commodity seed existed.  The Federal Circuit explained that while farmers may have the right to use commodity seeds as feed, or for any other conceivable use, they cannot replicate patented technology by planting it in the ground to create newly infringing genetic material, seeds and plants.