High Court Justices Signal Support for Monsanto on Patents

01:39PM Feb 19, 2013
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By Jack Kaskey and Susan Decker, Copyright 2013 Bloomberg

U.S. Supreme Court justices signaled support for Monsanto Co. in a clash with a farmer who used harvested soybeans to plant a second crop, hinting at a victory for makers of vaccines, software and genetically modified products.

Hearing arguments today in Washington, a majority of the nine justices suggested that Monsanto has broad rights to control the use of seeds that contain its patented technology. The genetically modified seeds are used to grow more than 90 percent of the nation’s soybeans.

Without strong patent protection, "Monsanto would have no incentive to create a product like this one," Justice Elena Kagan said.

A victory for Monsanto would potentially let patent holders limit the use of self-replicating products, which also include live vaccines, genetically modified salmon and bacteria strains used in medical research.

Monsanto, the world’s biggest seed company, forbids farmers from saving seeds for replanting instead of buying new ones each season. The company is battling Vernon Hugh Bowman, an Indiana farmer.

Biotechnology companies, software makers and research universities say a ruling for Bowman would weaken their patent protections. On the other side, makers of replacement auto parts and the American Antitrust Institute argue against restricting how patented products are used.

Roundup Ready

Monsanto, based in St. Louis, inserts genes into crops that let them withstand application of the herbicide Roundup. Farmers who buy so-called Roundup Ready seeds agree to restrictions on their use. Monsanto has sued 146 U.S. farmers for saving Roundup Ready soybeans since 1997, winning all 11 cases that went to trial, said Kelli Powers, a Monsanto spokeswoman.

Bowman, 76, said he complied with the rules for the spring planting of soybeans, which he bought from DuPont Co.’s Pioneer unit, a Roundup Ready licensee. For the second crop of the season, which is susceptible to low yields because of its late timing, Bowman planted beans he bought from a grain elevator. Bowman estimated he saved $30,000 for his farm.

Bowman says he did nothing wrong since there were no written restrictions on purchasing soybeans from the elevator. He contends Monsanto’s patent rights expired after farmers bought the original seeds.

‘Tofu Turkey’

The U.S. Court of Appeals for the Federal Circuit in September 2011 ruled against Bowman. The seed from the planting was a "newly infringing article," the court ruled in upholding an $84,456 award against him.

Several justices today suggested they agreed with that reasoning. Justice Stephen Breyer said federal patent law lets a purchaser use a product for a variety of purposes, such as making "tofu turkey" from soybeans.

"What it prohibits is making a copy of the patented invention, and that is what he did," Breyer told Bowman’s lawyer.

The case, which the justices will decide by July, is Bowman v. Monsanto, 11-796.