Supreme Court Decision a Win for Agricultural Innovation
May 13, 2013
[Disclosure: The author contributed to an amicus curiae brief supporting Monsanto in this case]
Today, the U.S. Supreme Court issued a unanimous opinion in the patented soybean case, Bowman v. Monsanto. The Court held that a farmer who buys patented seeds may not reproduce and replant patented seeds without the patent holder's permission. This decision is a major win for agricultural innovation and will ensure that investments in biotechnology research will continue in the future.
Vernon Bowman, an Indiana farmer, found a novel way to access Roundup Ready technology without paying license fees. He purchased commodity soybeans from a local elevator and planted them as seed. When the crop emerged, he sprayed the crop with glyphosate. Only the soybeans containing the Roundup Ready trait survived the burndown spray. He subsequently harvested and saved seed from this crop, ensuring that future crops would contain the patented Roundup Ready biotechnology. Mr. Bowman notified Monsanto of his plans and continued to save the Roundup Ready beans for eight years. Monsanto sued Mr. Bowman for patent infringement.
What was at stake?
If the Supreme Court ruled in Mr. Bowman's favor, it would have created a loophole to allow seed saving. While a typical technology agreement between a seed dealer and a farmer includes a contract provision prohibiting saved seed, grain elevators are not usually a party in such contracts. Farmers could avoid paying tech fees by following Mr. Bowman's lead and purchasing bin-run beans from grain elevators and using them as seed. These bin-run beans would not be subject to technology agreements. Patent protection is the only tool that biotech companies can use to protect their investment in research and development.
While many farmers often fantasize about a world without tech fees, the vast majority recognize that these fees are worth the cost. The numbers do not lie. Well over 85% of the soybeans, corn, and cotton produced in this country is improved with genetic modification. Glyphosate-resistant and insect-resistant varieties make crop management easier, reduce soil erosion, improve carbon sequestration, and reduce headaches in general.
Developing these traits is a time and resource-intensive process that costs well over $100 million per trait. Biotech companies will not make the investment of time and money without an assurance that they will be compensated for their risk and effort. Like other innovators, biotech seed companies rely on patents to protect their investment. Without patent protection, biotech companies would have little incentive to invest research in self-pollinating crops, like soybeans, because there is no guarantee that they would be able to recover their investment beyond their first year's crop.
This decision further cements the patent protection that biotech companies enjoy. With assurance that they can enforce their patents, seed developers can confidently invest the resources necessary to develop new, useful cutting-edge genetic traits. Traits in the pipeline, such as improved drought resistance, yield boosters, and neutraceuticals will eventually make their way to the marketplace. Yes, farmers will have to pay for these patented traits if they choose to use them; however, without patent protection, it is unlikely that the new traits would ever see the light of day.
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.