A typical seed patent license provides that a farmer can grow only one crop from the patented seeds purchased. The Supreme Court ruled unanimously yesterday that farmers cannot replant harvested seeds with the patented trait to produce a second crop without permission.[1]

Under the doctrine of patent exhaustion, the initial authorized sale of a patented item terminates the patent owner’s control over use or resale of that item.[2] However, patent exhaustion does not license a purchaser to “make, use or sell” additional iterations of the invention. Bowman v. Monsanto applied the patent exhaustion doctrine to a self-replicating article – Roundup Ready soybeans. 

Background:

Indiana farmer Vernon Bowman bought Monsanto’s patented Roundup Ready soybeans for his first crop each season. The soybeans contain a genetic alteration that allows them to survive exposure to the herbicide glyphosate. Under the licensing agreement, harvested soybeans must be used for consumption and may not be saved for replanting (thus enabling Monsanto to sell seeds for the next crop). 

To reduce costs in high risk late-season planting, Bowman bought commodity soybeans from a grain elevator. These soybeans, from prior harvests, were intended for human or animal consumption. After planting the soybeans, Bowman treated the plants with glyphosate. The herbicide killed all the plants lacking the Roundup Ready trait. Bowman harvested the resulting soybeans and retained some that contained the trait for future use. Monsanto discovered Bowman’s tactics and sued for patent infringement. 

Bowman asserted that Monsanto could not control his use of the soybeans because the beans were the subject of a prior authorized sale. The district court rejected the patent exhaustion defense, and the Federal Circuit affirmed. 

The Supreme Court Decision: 

Patent protection is “exhausted” only as to the “particular article” sold.[3] Making additional copies falls outside the patent exhaustion doctrine; otherwise a farmer could make one seed purchase and endlessly produce Roundup Ready crops and seeds. 

Bowman argued “seeds-are-special” -- seeds are intended for planting and Bowman was using them the normal way farmers do. Allowing Monsanto to interfere with that use, Bowman argued, would create an impermissible exception to the patent exhaustion doctrine for patented seeds and other self-replicating technologies. 

The Court found seeds were not an exception to the rule that exhaustion does not include a right to make a new article.  Unlimited use of the harvested seeds would cause the patent value to “plummet” after the first sale, depriving the owner of the benefit of the prescribed 20-year patent term. Ultimately, this would mean less innovation. 

Bowman asserted that soybeans naturally self-replicate; therefore, it was the soybean (not Bowman) that reproduced the patented invention. The Court rejected this “blame-the-bean defense.” Bowman, as the farmer, controlled reproduction of the patented invention and sought to deprive Monsanto of sales of the patented seeds. The Court noted that applicability of patent exhaustion in another case might differ if self-replication is outside of a purchaser’s control or a necessary but incidental step in using the item (e.g., software inventions).