Bowman v Monsanto Replicates Problems for the Future

By Hannah Marie Farhan and Jonathan Hu

On May 13, 2013, the Supreme Court decided Bowman v Monsanto 9-0 in favor of Monsanto. Monsanto had sued an Indiana Farmer, Vernon Bowman, for infringing its patents on “Roundup Ready” soybean seeds. Bowman argued patent exhaustion in defense. Justice Kagan, writing for the Court, held that patent exhaustion does not allow an authorized purchaser to replicate patented seeds without permission from the patent holder.

Abstract Idea:

The legal doctrine of patent exhaustion provides that patentees lose their patent protection after the initial authorized sale of their patented product. Quanta Computer, Inc. v. LG Electronics, Inc., 553 U. S. 617, 625. The subsequent owner can thus use or sell the item as he or she pleases without the threat of patent infringement for him/her or secondary purchasers. The Court had previously held, however, that patent exhaustion does not enable an authorized purchaser to reconstruct the patented product. Otherwise, patent holders would only profit from the first few sales of their products. The issue in Bowman v. Monsanto was whether the “natural use” of the seed protected the grower under the doctrine of patent exhaustion.

Case Argument:

Bowman acknowledged that the exhaustion doctrine does not grant the right to “make a new product.” He attempted to differentiate genetically modified seeds within this principal by arguing that seeds control their own natural replication and that this natural process should be recognized within patent exhaustion. The Supreme Court rejected this argument first by pointing out that the seeds Bowman bought were specifically licensed for consumption and not reproduction. The Court also highlighted Bowman’s actions of planting and watering the seeds, thus enabling reproduction. Therefore, the Court concluded that Bowman was in control of the reproduction, finding the “‘blame-the-bean’ defense tough to credit.”

Potential Takeaways and Impacts:

The Supreme Court’s ruling explicitly limited its decision to this specific situation. It recognized possible future cases with potentially unexpected technology and, therefore, distinct needs. Nevertheless, for farmers, the immediate result is a continued spike in prices for both farmers and consumers. Soybeans, cotton, and corn seed prices have shot up between 259 and 516 percent over the past fifteen years. Eamon Murphy, Bowman v. Monsanto: The Price We All Pay for Roundup Ready Seeds, Daily Finance (May 21, 2013, 11:30 AM) http://www.dailyfinance.com/on/monsanto-gmo-roundup-ready-seeds-patents-food-prices/. Genetically modified soybeans are currently three times the price of normal soybeans.  Nina Totenberg, For Supreme Court, Monsanto’s Win Was More About Patents Than Seeds, NPR’s All Things Considered, (May 13, 2013, 6:16 PM) http://www.npr.org/blogs/thesalt/2013/05/14/ 183729491/Supreme-Court-Sides-With-Monsanto-In-Seed-Patent-Case. Additionally, the long term issue has been an increase in the use of Roundup and a resulting prevalence of super-weeds.

This highlights an interesting point: Monsanto creates both the increasingly used, and basically necessary, herbicide (Roundup) and the herbicide resistant seed in question from this case. Accordingly, even if Monsanto could not directly profit at all off its genetically modified seed, it could still profit from the seed’s creation because of the cycle of increased dependency upon Monsanto’s herbicide that the seed is used with. Therefore, the Court could have agreed with Bowman without eliminating Monsanto’s incentive for innovation.

Ultimately, the takeaway question is when, not if, the Supreme Court will balance its protection of innovators with its protection of consumers over replicating technology? With recognized limits like patent exhaustion, the Supreme Court will eventually draw the line on protecting the patents and profits of naturally reproducing products.