Of Farmers and Supreme Court Judges

Yesterday, the U.S. Supreme Court heard the oral arguments in a case that promises broad ramifications for the future of seed patents in America and, by extension, globally. The case of Vernon Bowman v. Monsanto is complex and shows gaps in the current legal framework with regard to seeds as patentable items that might make this an important precedent-setting case. What is the background, and how did the Supreme Court judges react to the argument?

To understand the case, it is important to know that in the U.S. there are two different types of patent regimes with regards to seeds: The Plant Variety Protection Act (PVPA), which was passed in 1970, and the Patent Act, to which novel seeds were admitted in 1985. The PVPA allows the US Department of Agriculture (USDA) to grant Certificates of Protection to breeders of new varieties, which gives them exclusive marketing rights of the new plant for 20 years. However, it recognizes the uniqueness of agriculture in two main exceptions: it allows farmers to save seeds for the next harvest, and patented varieties must be available for public research. Under the normal Patent Act, which covers a broad range of inventions and products, no such exceptions exist. There is however the Doctrine of Patent Exhaustion, meaning that once the patent holders sell their product, they give up the right to control the further use of that product.

Now, Vernon Bowman is a 75-year-old Indiana farmer who bought soybean seeds from a grain elevator and planted them. He then used the herbicide Roundup on his crop to see whether any Roundup-Ready seeds (which are under Monsanto’s patent) were in the mix, in the process killing all other not-Roundup-Ready plants, and ended up planting the Roundup-Ready ones. From my understanding, this is not a common strategy to use in order to gain access to seeds – grain elevator seeds are usually aimed for consumption because of their mix in variety, maturity, etc., making it an unprofitable strategy since you usually want a uniform crop that matures at the same time and grows simultaneously, but sometimes farmers will use the cheap grain elevator seeds if they recently dealt with flooding or other natural disasters and don’t know whether their fields are ready to be planted yet. This far the background.

The main question is – did Mr. Bowman infringe upon Monsanto’s patent in growing plants from an unspecified mix which turned out to be Monsanto plants? He did not a) purchase Monsanto seeds in the first place or b) enter into any contractual obligation with the company, as farmers usually do (the contract, a so-called Technology Use Agreement, will allow them to grow one crop alone, but will prohibit seed-saving in all its forms explicitly). His lawyer argued that the (first-generation) seeds that other farmers had purchased and produced new (second-generation) seeds with fell under the Doctrine of Patent Exhaustion, which does not allow Monsanto to control the further use of the second-generation seeds – including the fact that they were bought and planted by Mr. Bowman. This, however, was received sceptically by the Supreme Court Judges (quotes from the oral hearing transcript):

“CHIEF JUSTICE ROBERTS: Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?”

“Justice Breyer: Now, when you buy generation 2, well, there are a lot of things you can do with it. You can feed it to animals, you can feed it to your family, make tofu turkeys. I mean, you know, there are a lot of things you can do with it, all right. But I’ll give you two that you can’t do. One, you can’t pick up those seeds that you’ve just bought and throw them in a child’s face. You can’t do that because there’s a law that says you can’t do it. Now, there’s another law that says you cannot make copies of a patented invention. And that law you have violated when you use it to make generation 3, just as you have violated the law against assault were you to use it to commit an assault.”

However, in reading the transcript, you really start to notice that there is little to no legal precedent or certainty in a case like this where you are talking about a self-replicating invention. The crux of the matter is – the Doctrine of Patent Exhaustion says you are allowed to use the invention in all ways you want, but you are not allowed to replicate it. But a seed has as its only real use the fact that you plant it and replicate it into new crops – which, in the case of soybeans, can be used for processing/consumption or as a new seed interchangeably. And the use of seeds in agriculture has for centuries been these two things – production of food and feed and of new seeds for the next growing period.

Thus, when Justice Sotomayor says that “The Exhaustion Doctrine permits you to use the good that you  buy. It never permits you to make another item from that item you bought. So that’s what I think Justice Breyer is saying, which is you can use the seed, you can plant it, but what you can’t do is use its progeny unless you are licensed to, because its progeny is a new item,” the Supreme Court Justices are interpreting agricultural practice in a dangerously narrow way with regard to genetically engineered and patented seeds.

However, in the hearing they do seem aware of the consequences, since Justice Kagan asks about the possibilities of then making infringers out of everybody that inadvertently grows patented seeds that were blown on their fields by accident. Here is the response of Monsanto’s lawyer: “The point that there may be many farmers with respect to other crops like alfalfa that may have some inadvertent Roundup Ready alfalfa in their fields may be true, although it’s — it is not well documented. There would be inadvertent infringement if the farmer was cultivating a patented crop, but there would be no enforcement of that. The farmer wouldn’t know, Monsanto wouldn’t know, and in any event, the damages would be zero because you would ask what the reasonable royalty would be, and if the farmer doesn’t want Roundup Ready technology and isn’t using Roundup Ready technology to save costs and increase productivity, the — the royalty value would be zero.”

In my understanding of this position, he is saying that yes, all farmers would be potential infringers, but it would be up to the decision of the patent-holder (in this case, Monsanto) to decide whether or not to pursue them legally, and he claims that they wouldn’t do that. However, in view of its track-record so far, I would be critical to say the least to leave the enforcement up to the goodwill of the companies benefiting from patent agreements.

The main problem in my view is that here, seeds are thrown into the big pot of patentable items and treated no different, which caused universities to lobby for giving Monsanto right because otherwise the ruling would set precedence for all other kinds of technology patents and “upset the flourishing innovation system” that U.S. patent law had created. But if the U.S. has a specific legal framework for dealing with seeds, namely the PVPA mentioned above, why are they even talking about seeds setting precedence for the Patent Law and can’t revert back to limiting seed development to be ruled under the PVPA?

The court could decide the case any time before the end of the 2012-2013 term at the end of June, but the New York Times article I linked to seems to interpret that they are leaning towards the side of Monsanto – which would set case-law to make any farmer who, knowingly or unknowingly, grows a patented plant without having purchased the seed to it, subject to legal action.

For further reading: This is Monsanto’s brief, this the reply by Bowman; here is the U.S. government brief supporting Monsanto’s position, and here is an amicus brief by the Center for Food Safety that argue for Bowman’s position.