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Focus on Life Sciences: U.S. Supreme Court's Unanimous Ruling Supports Monsanto's Patent Rights

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On Monday, May 13, 2013, the U.S. Supreme Court ruled unanimously in Bowman v. Monsanto Co. et al. that Indiana farmer Vernon Hugh Bowman infringed upon Monsanto's patents by planting soybean seed containing Monsanto's technology outside the scope of an executed technology license agreement signed by Mr. Bowman.
May 13, 2013

On Monday, May 13, 2013, the U.S. Supreme Court ruled unanimously in Bowman v. Monsanto Co. et al. that Indiana farmer Vernon Hugh Bowman infringed upon Monsanto's patents by planting soybean seed containing Monsanto's technology outside the scope of an executed technology license agreement signed by Mr. Bowman.

At issue was Mr. Bowman's practice of using saved seed or seed purchased as grain from a grain elevator for use as seed to perform "second plantings." This practice is in violation of industry standard technology agreements that Monsanto uses to protect its patented technology and rights to that technology.

In arguments, Mr. Bowman argued that once a patented article is sold, it is no longer protected under the Patent Act and is then available to be used by the purchaser to practice the invention. This is known as "patent exhaustion." Under this theory, technology purchasers would be free to plant the seed and then use the progeny in any manner the purchaser chooses, including saving and replanting seed for subsequent growing seasons.

Monsanto argued that the planting and saving of patented seed for future plantings violates its patent rights because when it sells its seed, its license agreements permit only one planting. In other words, Monsanto recognized that soybean seeds essentially self replicate themselves and the patented technology contained within. Without the planting restriction, farmers would never have to repurchase seed containing Monsanto's patented technology; they could save seed and continuously plant successive generations from the original licensed seed.

The Supreme Court ruled, affirming a September 2011 U.S. Court of Appeals for the Federal Circuit decision, that "patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder's permission...By planting and harvesting Monsanto's patented seeds, Bowman made additional copies of Monsanto's patented invention, and his conduct thus falls outside the protections of patent exhaustion. Were this otherwise, Monsanto's patent would provide scant benefit. After Monsanto sold its first seed, other seed companies and farmers could produce the patented seed to compete with Monsanto, and farmers would need to buy seed only once."

Going forward, this decision helps eliminate some of the uncertainty regarding the intellectual property protections that faced inventors and innovators within not only the Plant Sciences industry, but other R&D intensive areas where technology can be self-replicating. "Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention." This decision provides some assurance that the theory of patent exhaustion cannot be used by potential infringers to justify the making of new copies of a patented item.

RubinBrown has a dedicated group focused on the Life Sciences Industry to provide assurance, tax, and business advisory services for entities participating in the Life Sciences industry or supporting those that do. Specialized segments include Animal Health, Plant Sciences, Human Health, and Renewable Energy.

 

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