Haas_ThomasGuest Commentary

by Thomas M. Haas, Thompson Hine LLP

In a short, unanimous decision, the U.S. Supreme Court held Monday that the doctrine of patent exhaustion “does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder’s permission.” (Bowman v. Monsanto) Thus, for the time being, the Supreme Court has maintained the status quo for patent exhaustion.

Farmer Vernon Hugh Bowman purchased patented “Roundup Ready” seeds for his initial crop of soybeans. He subsequently chose to plant cheaper seed for late-season soybean planting. He went to a grain elevator that held soybeans typically sold for feed, milling and other uses to purchase new seed, reasoning that most of those soybeans would be resistant to Roundup, as they initially came from patented Roundup Ready seeds. Bowman was correct; the seeds did in fact contain the genetic material conferring resistance to Roundup.

Bowman argued that Monsanto’s patent rights were exhausted with the sale of the first crop of beans. Bowman also said he should not be liable, in part, because soybeans naturally sprout when planted.

His request found no sympathy. The Court considered Bowman’s argument essentially an argument for an exception to the patent exhaustion doctrine. “Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article,” Justice Kagan wrote for the Court. “Patent exhaustion provides no haven for such conduct.” The Court also failed to accept Bowman’s argument regarding the nature of seeds. “We think the blame-the-bean defense tough to credit,” the Court said.

This ruling is no surprise to those who follow the Supreme Court. In fact, this decision was foreshadowed in the opinion the Court set out in J.E.M. Ag Supply v. Pioneer Hi-Bred Int’l  (2001), in which the Court clearly explained that a patent holder could prohibit a farmer who legally purchases and plants a protected seed from saving harvested seed for replanting. For those in the biotech industry, Monday’s decision merely reaffirmed the law as it has been understood for years – the purchase of a patented product does not confer the right to make copies of the patented product. Mitchell v. Hawley, 16 Wall. 544 (1873).

For other industries, some mystery remains. Though the Court has maintained the status quo for certain types of patented products, it has left the door open for revisiting patent exhaustion in the future. “Our holding today is limited – addressing the situation before us, rather than every one involving a self-replicating product,” the Court said. “We recognize that such inventions are becoming ever more prevalent, complex, and diverse.”