[Disclosure: The author participated in drafting an amicus brief for the American Soybean Association and other trade associations supporting Monsanto’s position in this case.]
Modern agriculture will be front and center at the United States Supreme Court today when it hears oral arguments in Bowman v. Monsanto Co. At stake is whether Monsanto and other patent holders can enforce their patent rights on the progeny of seed that they sell. If the Supreme Court rules in favor of Monsanto, seed companies will have assurance that its patent rights are protected and will continue to invest in soybean biotech traits. However, if the court rules in favor of Bowman, seed companies will have a reduced incentive to invest in biotech traits for self-pollinating crops, such as soybeans and wheat.
Vernon Bowman is a corn, wheat, and soybean farmer from Knox County, Indiana. Bowman purchased seed for his primary crops through a Pioneer dealer, paid the necessary tech fees, and refrained from saving seed. However, starting in 1999, Bowman found a way to avoid paying tech fees on riskier, late-season soybean crops – he bought commodity grain from an elevator and planted it. Bowman then sprayed the grain elevator beans with Roundup, ensuring that the surviving crop contained Monsanto’s glyphosate-resistant technology. Bowman saved seeds from this crop and replanted them annually.
Bowman contacted Monsanto, disclosing his activities to the company; he explained that he thought his grain elevator seed was lawful. Monsanto felt otherwise and brought suit against Bowman for patent infringement in 2007. In 2009, Monsanto prevailed in federal district court in Indiana. In 2011, Monsanto also won an appeal at the Federal Circuit, which handles patent appeals. In October 2012, much to the surprise of patent law experts, the U.S. Supreme Court agreed to take on the case.
The issue presented in the Bowman case is whether Monsanto’s patent rights in Roundup Ready soybeans are "exhausted" when patented seed beans are sold to a farmer. The general principle behind patent exhaustion is to prevent patent holders from exerting control over their patented items once they are sold. For example, when you buy a truck, it contains a number of patents. However, once you buy it, you are free to do with it what you want – repaint it, drive it into a ditch, or pump Taylor Swift songs through the audio system. GM, Ford, and Dodge cannot tell you what brand of fuel to use, what brand of tire you must use, or which Taylor Swift songs (if any) are appropriate for their sound systems. The only prohibition that follows any patented item that you purchase is you cannot make copies of it.
However, the issue becomes more complicated with patented technologies that are capable of "self-replication," such as soybeans. In the Bowman case, Monsanto argues that the progeny of its Roundup Ready beans are "made" by farmers because the subsequent generations contain the glyphosate-resistant trait. Monsanto asserts that it has patent rights to the newly-made beans and these rights allow it to prevent these patented beans from being used for seed. Monsanto believes its patents extend to these beans, even if they are sold to a grain elevator as commodity beans.
This case has practical implications for those of us in agriculture. Soybeans, wheat, and other self-pollinating crops are amenable to saving seed. Monsanto and other biotech companies have used their patent rights to recoup their investments by prohibiting saving soybean seed. If Monsanto loses, then farmers may be able to bypass biotech fees by following Bowman’s grain elevator seed scheme. However, without the promise of annual biotech fees, seed companies are likely to shift their genetic investments to hybrid crops, such as corn, where seed saving isn’t practical.
I will be in attendance during today’s arguments and will keep you updated on developments in the case.
John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA. John focuses his practice on agricultural and environmental law. He occasionally tweets at @DCAgLawyer.