Bowman v. Monsanto and self-replicating seeds; David v. Goliath or Don Quixote v. Windmills?

Author:Lesser, W.
Position::I. Introduction and Objectives through III. Case Law, p. 508-554
  1. INTRODUCTION AND OBJECTIVES A. Distinct treatment of seeds and other planting material under U.S. patent law B. Objectives II. BOWMAN'S TRAVAILS WITH MONSANTO A. Monsanto technologies and licensing agreements B. Bowman's farming practices and alleged infringement C. District court decision D. Appeals court decision E. Appeal to the Supreme Court F. Question Presented III: CASE LAW A. Infringement a. Using, Making and Selling b. Innocent Infringement B. Experimental use C. Repair v. reconstruction D. Patent exhaustion/implied license a. Early Cases b. Federal Circuit Cases c. Supreme Court Cases d. Implied License E. Economic arguments IV. DISCUSSION A. Did the conditions for direct infringement exist? B. Was Bowman a contract or infringement issue? C. Does an authorized unconditional sale actually forfeit all subsequent interest in the invention? Is Bowman guilty of experimental use and 'reconstruction' infringement? D. Did Bowman illegally 'reconstruct' the RR soybean seeds? Were the progeny seeds sold? E. Was Bowman's sale 'authorized'? F. Was the Bowman sale unconditioned? G. Are Univis and Quanta Computer appropriate precedent for Bowman? H. Should the courts consider the economic issues involved in seed saving? V. SUPREME COURT DECISION VI. CONCLUSIONS AND ISSUES FOR THE FUTURE Cite as 13 J. High Tech L. 508

  2. Introduction and Objectives

    On October 5, 2012, the Supreme Court in an unexpected decision granted certiorari to Bowman v. Monsanto. (1) Less surprisingly, on May 13, 2013 the Court decided unanimously to uphold the lower court decision finding Bowman to have infringed Monsanto's patents (details in Section V below).

    The case applies to patent exhaustion in the planting of patented second-generation soybean seeds by an Indiana farmer. (2) The cert. decision was surprising in part because the case is very similar to two seed-saving decisions made by the Federal Circuit over the past decade which found the farmer defendants to be infringing. (3) In deed, at one level of analysis, those cases differed from Monsanto v. Bowman only in that Vernon Bowman planted not his own saved seeds, as was the case in both McFarling and Scruggs, but rather bought and planted "commodity seeds" grown by other farmers and sold to a dealer (known as a grain elevator) for use as food and feed. (4) Commodity seeds are drawn from the soybean crop sold to a dealer which have been cleaned of stones and dirt as well as damaged seeds so as to assure improved planting and germination. (5) One way of considering the case is the distinction between replanting one's own seeds compared to planting those grown by neighbors and purchased from an elevator. (6)

    Another basis for surprise is the Solicitor General's recommendation against certiorari on the basis that the Federal Circuit's decision in Bowman was "correct and does not conflict with any decisions of this [Supreme] Court or any other court of appeals." (7) The Solicitor General further points out that the issues in the certiorari relate to the "conditional sale" doctrine, which was not the basis for the Bowman decision. (8) "This case is therefore an inappropriate vehicle to consider the continuing validity of the Federal Circuit's pre-Quanta case law." (9) What is clear is that seeds in particular have been treated differently under patent law since its onset in 1790. (10) An understanding of the how and why of that treatment is useful background for appreciating the context in which Bowman is being considered.

    1. Distinct treatment of seeds and other planting material under U.S. patent law

      Seeds and other planting materials (bulbs, cuttings, tubers, etc.) were not granted patent protection for the first 140 years of U.S. intellectual property law. (11) That led the great breeder Luther Burbank (12) to declare in frustration, "A man can patent a mousetrap or copyright a nasty song, but if he gives to the world a new fruit that will add millions to the value of the earth's annual harvests, he will be fortunate if he is rewarded by so much as having his name connected with the result." (13) Help, though, was imminent, and the Congress adopted the Plant Patent Act in 1930. (14) The Act provides patent protection to plants (bulbs and cuttings with sports and mutants thereof) when asexually propagated but specifically excludes tuber propagated plants (potatoes and Jerusalem artichokes). (15) The Act was justified as "afford[ing] agriculture, so far as practicable, the same opportunity to participate in the benefits of the patent system as has been given industry...." (16)

      The justification is economic, very understandable in the darkest days of the Great Depression; "[t]o-day the breeder has no adequate financial incentive to enter upon his work." (17) The Congress showed some depth of economic understanding by noting that not only will breeders directly benefit from patent protection and consumers from the availability of efficient new varieties, the agricultural system will benefit because breeders will be able to recover their investment over time, making new varieties available at a lower initial price. (18) The fact that these newly patentable products were living, self-replicating organisms did not enter the discussion beyond noting that asexually propagated plants have their identity preserved-are clones--and hence are identifiable over generations. (19) The sole patentability requirement deemed necessary to adjust was a modification in the description requirement to be "as complete as is reasonably possible." (20)

      In the face of this progress one nevertheless might ask why tubers were specifically excluded, tubers being the edible portion. And, for that matter, why exclude the grains (which sexually propagate) which are the basis of our diet. According to one chronicler of the process, these exclusions were "to prevent monopolies upon the cereal grains" and "to prevent monopolies on potatoes, etc." (21) Congress has not shown a similar concern about patent monopoly for other life necessities like pharmaceuticals, but then agriculture has long been treated differently. (22)

      A concern for the cost effect of intellectual property protection for plants was also apparent when Congress extended protection to sexually propagated seeds in 1970. (23) That was done via a sui generis system, the Plant Variety Protection Act ("PVPA") of 1970, (24) administered by the Department of Agriculture. (25) While patent-like, the PVPA is distinct in several significant ways, notably by allowing farmers to save (but not sell) part of a crop and re-use as seeds on his/her farm the subsequent season, and allowing breeders research access without permission once a variety is marketed. (26) These farmers' and breeders' exemptions are acknowledged to reduce the scope of protection for certificates of plant variety protection compared to utility patents, but still concerns were expressed about effects of the PVPA on seed prices among other matters. (27)

      During the 1980 Senate hearings on minor amendments to the PVPA, Senator Stewart of the Subcommittee on Agricultural Research and General Legislation of the Committee on Agriculture, Nutrition and Forestry stated firmly his concerns about abetting monopoly. "If I thought for a minute that our patenting process was being utilized by large-scale concerns to control the seed-producing industry, your bill never would get out of my committee." (28)

      Those and related concerns led to the Dept. Agriculture commissioning a study of the economic impacts of the PVPA. (29) The overall study conclusion was of limited impact, positive or negative, which seems appropriate given the intended constricted property rights granted by the Act. (30) The reason to note this early cautious approach by Congress in extending intellectual property protection to plants is to present a contrast when the initiative moved to the courts, which limited consideration to legal matters. (31) The major decision in this regard is of course Diamond v. Chakrabarty, which extended the scope of patentable subject matter to "anything under the sun that is made by man...." (32) In that instance the 'anything' was a genetically engineered bacterium, but the scope was soon extended by the Pa tent Office to plants and animals. (33)

      Whereas the Congress considered the extent of monopoly control granted by patent rights during the drafting of those rights, the courts came to consider the issue only subsequently. In the recent Myriad (34) and Prometheus (35) cases which apply to human genes and methods of treatment respectively, the monopoly factor arose regarding the previously-dormant issues of products of nature and laws of nature. (36) The Federal Circuit granted patents in both cases (37) but the Supreme Court vacated that court's Prometheus decision (38) and subsequently remanded Myriad, based on it. (39) The issue with the Court "seems to be that a patent should not inhibit others from making use of natural laws," in the sense of preempting, monopolizing, subsequent research and use. (40) The appeals court though was unrepentant; "[Prometheus] does not change that result." (41) There is an evident sharp difference of interpretation between the appeals court and the Supreme Court on the matters of laws and products of nature and the consequences for extending the patent monopoly. (42)

      A similar difference of opinion between the Supreme Court and the Federal Circuit seems to be evolving over the right to save the harvest of a patented seed for use as a seed source (saved seed or progeny seed). (43) The appeals court as noted above has twice ruled against that practice as an infringing use while the Supreme Court has chosen to rule on just that issue. (44) There are to my analysis two basic and opposing approaches which can be taken by the Supreme Court, and one which establishes more of a middle ground:

      * Saved seed has never been sold so that there is no exhaustion of patent rights. This is the position...

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