Oats, Peas, Beans, and Patents Grow
As Ram Trucks reminded in its stirring Super Bowl ad, farmers have played a great role in America’s history. Arguably, big business and innovative corporations have been equally important to our nation’s growth. But what happens when the interest of these sides collide? This was what the Supreme Court was faced with last week in Bowman v. Monsanto.
You already know Vernon Hugh Bowman. He’s just a 75-year-old soybean farmer from Indiana. Monsanto, on the other hand, may be less familiar. They are the multinational biotechnology corporation that revolutionized the agrochemical industry when they introduced genetically modified (GM) seeds in 1987. They have since registered countless patents on GM seeds, unique for their resistance to Roundup, the most widely used chemical pesticide. Not coincidently, Monsanto also owns the patent to Roundup. These “Roundup Ready” seeds are highly beneficial to farmers, as they are immune to the chemicals used to kill weeds and insects. In fact, 90% of the soybean crop in the US comes from Monsanto patented seeds. But to authorize the use of these seeds, farmers must pay Monsanto hefty yearly licensing fee, and promise that they wont replant any of the crop they harvest.
Bowman believed he identified a loophole in Monsanto’s scheme when he purchased seeds from a grain elevator. Farmers commonly sell their crop to grain elevators, who then may sell the GM seeds back to farmers, or to manufacturing companies for processing into food, animal feed, or industrial products. In Monsanto’s view, buying patented seeds from a third party without paying the licensing fee is an infringement, so Monstanto took Mr. Bowman to court.
Oral arguments took place last Tuesday. Bowman’s lawyers relied on precedent established in Quanta Computer, Inc. v. LG Electronics, Inc., a 2008 case that held manufacturers’ patent rights are exhausted after an initial sale, and a buyer’s use of patented technology could not be controlled. Justice Sotomayor clarified this holding relating to GM seeds, stating “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.”
Monsanto’s approach sought an exception to the exhaustion doctrine to protect self-replicating technology past the first generation. Justice Breyer pointed out that when seeds self replicate, as they tend to do, a new, patented article is created. “You can feed it to animals, you can feed it to your family, make tofu turkeys,” joked Breyer. “But you can’t pick up those seeds that you’ve just bought and throw them in a child’s face – 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.”
Chief Justice Roberts seemed to side with Monsanto’s position that allowing farmers to save and reuse seeds without paying licensing fees would completely undermine patent protections, whose central functions are to incentivize innovation. “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?”
Despite their apparent skepticism, the Justices acknowledged the potential consequences of this decision. Allowing patent protection to extend beyond the initial sale could lead to circumstances where a company owns patents to multiple steps in the chain of production – especially as GMOs become more widely used in food production. Independent farmers and small business see this as an attack on their livelihood. They argue their right to reuse seeds is their last leg of defense against skyrocketing costs of farming, and a last ditch effort to reset the economics of seeds. Social Darwinists and the American businessman would disagree.
The fate of self-replicating technologies is not limited to agriculture. Live vaccines, stem cells, bacteria strains, and even genetically modified human genes serve the sole purpose of regeneration – and are instrumental for medical research. Will similar patent protections apply to them as well?
Legal issues aside, what we have here is David versus Goliath. Monsanto is a $12 billion empire with a reputation for using ruthless strategies to protect its intellectual property. It has gone so far as to reward farmers who report their infringing neighbors. Rural farmers simply don’t have the means to engage in legal battles with multinational corporations. Before Bowman’s case was taken pro bono, he spent $31,000 on legal fees and did legal research at the library since he doesn’t own a computer. While most farmers are forced into settlements, the Center for Food Safety reports that Monsanto has filed 144 lawsuits involving 410 farmers and 56 small farm businesses in at least 27 different states. Monsanto has never lost a case that has gone to trial.
However way the court ultimately rules, one thing is certain. The issues presented in Bowman enter uncharted territory, as will similar cases henceforth. As Professor Jorge Contreras here at WCL remarked, “We’re dealing with laws and doctrines that were developed in the 19th century, where the idea of self-replicating technologies didn’t exist.”