Monsanto Wins Patent Dispute Against Farmer Who Bought Legal Seeds

from the patent-insanity dept

We've had numerous stories of Monsanto's rather aggressive patent enforcement efforts, and unfortunately it appears the company has chalked up another victory in the courts. Glyn Moody points us to the story of CAFC (the nation's patent appeals court) siding with Monsanto against yet another farmer.

The details of this story are really quite incredible. The farmer, Vernan Bowman, bought official Monsanto seeds and planted his crops. Yet, Monsanto has rules that say you can't re-use "Roundup Ready" seeds, but you can apparently sell "second-generation" seeds to grain elevators for use as "commodity seeds," and doesn't require that there be any restriction on the sale. Bowman later bought a bunch of such "commodity seeds," which included some Roundup Ready seeds, and some that weren't. Bowman was able to determine which of the plants came from Roundup Ready seeds... and then saved those seeds for replanting. Monsanto claimed this was infringement, even though the seeds were legally sold to the grain elevator and then from the elevator to Bowman without restrictions. On top of that, while Bowman had signed an agreement for his original seeds, he did not with this batch (and, indeed, even Monsanto admits he didn't break the user agreement -- just patent infringement for using the seeds).

It's difficult to see how this is possibly infringement. In common patent law terms, the patent issue should be "exhausted." Setting aside the insanity of using patents to tell farmers they can't re-use their own seeds, once Monsanto has given farmers the rights to sell second-generation seeds to the grain elevators for resale with no restrictions, it's hard to see how Monsanto should have any subsequent patent claim on any further use of those seeds or their progeny. In fact, Bowman was so sure that he was doing absolutely nothing wrong, that he freely shared the details of what he did with people from Monsanto. But the court, as it seems to do with alarming frequency, seems to see no trouble with granting a patent holder significantly extended control.

Patent exhaustion is supposed to cover these situations. A few years ago, the Supreme Court, in the Quanta case, made it clear (or so we thought) that a legal sale of a licensed component "exhausts" the patent holder's rights to go after later buyers in the supply chain for infringement. Bowman correctly pointed out that if this isn't a clear cut case of patent exhaustion, then the concept is pretty useless.

Monsanto's bizarre argument is that while it agrees to let farmers sell the seeds as a commodity without restriction, it still doesn't want anyone to plant with them, so anyone who does so did not make an authorized purchase, and thus no exhaustion has occurred. I can't see how that makes any sense at all. First of all, no restrictions were placed on the sale, so later claiming restrictions makes no sense. Furthermore, retroactively declaring a sale by two separate independent parties "unauthorized," after the fact, based on what the buyer does, is flat out crazy.

The court here says that exhaustion is meaningless, because the seeds Bowman planted are new seeds, and thus newly infringing -- yes, despite the legal purchase:

Patent exhaustion does not bar an infringement action. Even if Monsanto’s patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like Bowman, plants the commodity seeds containing Monsanto’s Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article.

It's hard to read decisions like this and not realize how horribly broken the patent system is, aided by courts like CAFC and a Congress that fails to fix such clear abuses.

Filed Under: cafc, patent exhaustion, patents, roundup ready, seeds, vernon bowman
Companies: monsanto