Bowman v. Monsanto Co.: a bellwether for the emerging issue of patentable self-replicating technologies and inadvertent infringement.

AuthorHolman, Christopher M.
PositionVII. Proposed Solutions to the Problem of Inadvertent Infringement Would Deny Self-Replicating Technologies Effective Patent Protection through Conclusion, with footnotes, p. 692-721

    The belief that patents on self-replicating technologies will lead to inadvertent infringement has generated a number of proposals that would address the perceived problem in a manner that threatens to dramatically undercut the ability of the patent system to incentivize innovation in fields that generate self-replicating products, such as biotechnology, nanotechnology, and perhaps even software. Some of these proposals are described in this Part.

    1. Patent Exhaustion

      In Bowman v. Monsanto Co., the infringing farmer and a number of supporting amici urged the Court to extend the judge-made doctrine of patent exhaustion to cover second-generation progeny of patented seeds, arguing that such an extension is necessary in order to shield farmers from liability for inadvertent infringement. (155) By implication, this extension of the exhaustion doctrine might well be applied to other self-replicating technologies outside the realm of plants and living organisms. (156) The Supreme Court declined this invitation to extend the doctrine, based on the facts of the case which included unquestioned intentional and knowing infringement on the part of Bowman, but the Court emphasized that it was not addressing every situation "involving self-replicating product," and noted that "[i]n another case, the article's self-replication might occur outside the purchaser's control [or] might be a necessary but incidental step in using the item for another purpose." (157) Were the courts to extend patent exhaustion to encompass progeny of self- replicating products like seeds, perhaps in a case featuring a more sympathetic accused infringer, it could have severe negative implications for a variety of self-replicating technologies.

    2. Patent Ineligibility

      Several years ago, the Federal Circuit's Judge Gajarsa wrote a concurring opinion in SmithKline Beecham v. Apotex opining that "products capable of being 'reproduced by nature unaided by man,' are not [patent eligible]," based upon his concerns about the potential for inadvertent infringement. (158) The specific example he gave was a hypothetical genetically modified "blue corn." (159) Fie predicted that patents on technologies having the potential to replicate without active human involvement could lead to "a widespread in terrorem effect crippling entire industries whose artisans learn that even their best efforts to respect patent rights may not save them from liability as inadvertent, inevitable infringers." (160) While Judge Gajarsa's position with respect to the patent eligibility of seeds seems inconsistent with Supreme Court precedent, such as Chakrabarty (161) 162 and J.E.M. Ag, (162) it does illustrate the susceptibility of even a Federal Circuit judge to reach for dramatic restrictions on the availability of patent protection based on perceived potential policy concerns associated with inadvertent infringement. Such an approach, which would effectively exclude even the most inventive and useful self-replicating products from patent protection, could have profoundly negative implications for innovation.

    3. Lack of Moral Utility

      In Organic Seed Growers, organizations representing organic farmers asked the courts to declare a number of Monsanto's patents relating to genetically modified crop plants invalid under the doctrine of moral utility, alleging that the problems caused by inadvertent infringement rendered the claimed subject matter "injurious to the well-being, good policy, or sound morals of society." (163) Monsanto prevailed based on the plaintiffs inability to establish standing, but the court implied that plaintiffs might have standing to proceed with their case if they could establish a reasonable likelihood that a farmer might "accumulate greater than trace amounts of modified seed by using or selling contaminated seed from his fields." (164)

      The doctrine of moral utility, which was at one time a viable theory for invalidating certain patents associated with activities deemed immoral or illegal, is generally believed to be of little relevance under recent Federal Circuit decisions that appear to have rejected the idea that the patent system plays a role in policing morality. (165) However, the doctrine is based on language from Supreme Court decisions, and it is not inconceivable that, if presented with the right set of facts, the Supreme Court might revive the doctrine. We have seen this phenomenon repeatedly in recent years, most notably with respect to the patent eligibility doctrine, which the Federal Circuit attempted to cabin but which was revived by the modern Supreme Court. (166)

    4. Duty on Patent Owner to Prevent Inadvertent Infringement

      Bowman and some of his supporting amici suggested that the law should impose a duty on patent owners, like Monsanto, to take affirmative steps to prevent the occurrence of inadvertent infringement, arguing, for example, that Monsanto should have been required to impose contractual restraints on authorized users of the technology which required the labeling and sequestration of patented second-generation progeny seeds. (167) Bowman also argued that Monsanto should have required licensed users of the company's technology "to sell their patented grain to preapproved grain dealers who would keep Monsanto's patented traits separate and agree not to sell to farmers who refused to sign a No Plant Agreement." (168) He argued that these measures were necessary in order to allow farmers to continue using commodity grain as an alternative source of seed, and that if Monsanto chose to enforce its patents in a manner that effectively precludes the planting of commodity grain, then the law should require the company to ensure the maintenance of an accessible source of non-patented commodity grain for farmers. (169)

      Under 35 U.S.C. [section] 287(a), a patent owner may only recover damages for patent infringement if the owner provides constructive notice by marking the patented article, or its package, with applicable patent numbers, or, in the alternative, after providing actual notice to the accused infringer. (170) Pointing to this statutory provision, Bowman argued that it would be easy for Monsanto to require growers to inform their purchasers--i.e., grain elevators--of the presence of patented Monsanto seeds by means of "appropriate labels placed on seed bags," and that in the absence of such explicit labeling, any purchaser of unlabeled patented seed should be immune from the imposition of any damages for infringement. (171)

      This marking requirement argument was left unresolved in Bowman, as the Federal Circuit held the argument moot, given that Monsanto had provided actual notice to Bowman of his infringement. (172) But if a court were to be presented with a case involving a farmer who planted unlabeled seeds without actual notice, it seems likely that the court would side with the patent owner on the question of damages. When a party other than the patentee is selling or making a patented article, such as a farmer selling commodity grain, courts use a "rule of reason" to determine whether the statutory requirement has been met. (173) In Bowman, Monsanto argued that it had substantially complied with the constructive notice provision of Section 287 by marking, and requiring its "seed partners" to mark, all first-generation seeds that contain patented Monsanto technology, and that under the Federal Circuit's rule of reason, it had no obligation under the statute to compel farmers to mark their commodity seeds because there is normally nothing for them to mark. (174) According to Monsanto, growers normally do not place their soybeans in bags or other containers capable of being marked unless engaged in brownbag sales of illegal seeds. (175)

      Bowman and some of his amici also suggested that patent owners should be required to develop and employ technical solutions to address the problem of inadvertent infringement. In particular, Bowman asserted that equities required Monsanto to use the so-called "Terminator gene" to render second-generation seeds infertile, thereby obviating the threat of inadvertent infringement. (176) Similarly, Knowledge Ecology International filed an amicus brief in support of Bowman, arguing that "Monsanto could stack its genetically modified seed with a 'Terminator gene' that renders subsequent generations of seed sterile." (177) These assertions seem disingenuous given the de facto moratorium on the technology, (178) and the district court appropriately dismissed the argument, pointing to the absence of evidence on the record that the Terminator gene was available, and noting that in any event the court is not the appropriate venue for raising such a policy argument. (179)

      While self-help measures such as sequestration, labeling, and technological restrictions on copying might in some instances be a prudent approach for companies like Monsanto, they should not be compulsory, and the failure of a patent owner to take such steps should not cause the loss of patent rights. At least as a general matter, requiring patent owners to take positive steps to prevent infringement can be seen as contrary to established principles of law. "As a general rule, the law imposes no duty on one person actively to assist in the preservation of the ... property of another ... even though the means by which the harm can be averted are in his possession." (180) And as a matter of policy, there are advantages to the use of patents as the primary means to protect new technologies. Unlike technological restrictions on access, patents eventually expire, and even while they are in force, they do not preclude all third-party use of the covered technology, particularly in the context of basic research.

    5. Compulsory Licensing

      The policy concerns associated with patented self-replicating products...

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