SUPREME COURT:

How an Ind. farmer's 'cheap' soybean seeds grew into showdown with agribusiness giant

What started with an Indiana farmer's purchase of soybean seeds from a local grain elevator has become the heart of a legal war with an agribusiness behemoth with a potentially large impact on agriculture and the biotechnology industry.

At the heart of the case that will be argued before the Supreme Court on Tuesday is this question: Can a biotech corporation restrict a farmer's use of seeds sprung from its genetically modified plants?

The farmer, Vernon Bowman, 75, is going nose to nose with Monsanto Co. over the planting of soybean seeds at the 300-acre Sandborn, Ind., farm he inherited from his father.

Bowman contends he did nothing wrong. "Farmers, all of my life, have been able to go to an elevator and buy outbound grain and turn it into the seed if they wanted to," he said in an interview.

St. Louis-based Monsanto doesn't see it that way. Because the seeds were the progeny of soybean plants that had been genetically modified to resist Monsanto's glyphosate herbicide Roundup Ready, the company contends, the seeds contained the company's patented technology.

And because Bowman had previously used first-generation Roundup Ready seeds, Monsanto said, he violated the company's patents and license agreement. The company sued Bowman in 2007 and, as it usually does in such suits, won an $85,000 settlement.

But Bowman wouldn't quit. "I was just determined that I wouldn't let them run over me," he said. "That's where we are at today."

Bowman v. Monsanto is being portrayed as a David versus Goliath showdown by farmers angry about the control exerted by pesticide and seed giants over their products. And many experts say what happens in the case could significantly affect biotechnology and other industries where companies maintain tight grips on technologies that reproduce themselves.

"The notion of self-replicating technologies is a very big-ticket question both for Monsanto -- because they make seed, which grow into plants and make more seeds -- but it also applies to other areas of technology, such as software, nanotechnology," said Jacob Sherkow, a Stanford Law School fellow who specializes in patent law. "If the court were to take a broad tack, it could have huge effects on downstream technologies."

From 1999 to 2007, Bowman purchased Roundup Ready soybean seeds from a Monsanto-authorized dealer. Those transactions included a Monsanto license agreement that said customers can use the seeds only once -- they cannot save them, plant their offspring or sell them. They can, however, sell them to grain elevators, where they are typically used for animal feed.

In an effort to save money for his second growing of the season, which is typically riskier and less successful, Bowman bought the commodity seed from the elevator and planted it. It saved him about $30,000.

"I wanted a cheap source of seed for my double crop," Bowman said.

Bowman told Monsanto about the seeds. In frequent correspondence with the company, he asked whether he was doing anything wrong by planting grain elevator seed. It appears Bowman never got the all-clear from Monsanto.

Bowman's attorney, Mark Walters of Frommer Lawrence & Haug LLP in Seattle, said grain elevator seeds are distinctly different from Roundup Ready seeds. They are a hodgepodge of what's been sold to the elevator, he said, and only rarely do farmers plant them as Bowman did.

"This grain elevator seed does not compete directly with Mosanto's first-generation seed," he said.

'Reasonable license restrictions'

In October 2007, Monsanto sued Bowman for planting the second-generation seed, arguing he willfully infringed on the company's patents.

Specifically, the company said Bowman was violating a license agreement beccause of his lawful purchases of Roundup Ready seeds. Monsanto contends that the license is necessary because the technology replicates itself.

"Without reasonable license restrictions prohibiting the replanting of second- and later-generation soybeans, Monsanto's ability to protect its patented technology would effectively be lost as soon as the first generation of the product was introduced into the market," Monsanto attorney and former U.S. Solicitor General Seth Waxman wrote in briefs to the Supreme Court.

The company also argues that if Bowman wins, farmers' ability to plant second-generation seeds would make them a competitor in the seed market. Monsanto noted that "there was no doubt that Bowman hoped and expected that the soybeans he purchased from the grain elevator would be resistant to glyphosate."

Monsanto won in a lower court, and the U.S. Court of Appeals for the Federal Circuit, which handles patent issues, agreed. The appellate court held that Bowman was reproducing Monsanto's technology and rejected Bowman's arguments that the company's patents were "exhausted" after the original purchased seeds were used. The court, consequently, carved out an exemption to a so-called doctrine of patent exhaustion for self-replicating technologies.

That exemption -- and the security it provides -- strikes at the core of biotechnology, according to Monsanto and several farming and intellectual property groups that intervened on its behalf.

"Without adequate intellectual property protection, the seed industry will lack sufficient incentive to develop improved genetic traits for field crops," the American Soybean Association said in its brief. "Patent protection for new seed technologies is vital for advancements in biotechnology."

The Obama administration urged the court not to hear the case, which would let the appeals court ruling stand.

But the Center for Food Safety and other watchdog groups dispute Monsanto's claims, arguing that first-generation patents provide plenty of legal protection. Moreover, they say that instead of prosecuting Bowman and other farmers, Monsanto could easily require that grain elevators restrict planting commodity grain.

'When is a sale really a sale?'

Bowman appears to be facing an uphill fight in taking on Monsanto. Through January, the company had filed 144 lawsuits involving more than 410 farmers in at least 27 states, according to the Center for Food Safety. It has won all the cases that went to trial.

Monsanto has also faced countless lawsuits brought by farmers like Bowman. It has also won nearly all of those.

"The case is a microcosm of this larger problem," said George Kimbrell, a senior attorney at the Center for Food Safety, which has intervened on Bowman's behalf. "Mr. Bowman represents prior farmers who have brought similar cases in the past and lost."

But legal observers suggest Bowman may have a better chance at the Supreme Court because the high court hasn't weighed in on the specific issues presented in the case, namely patent exhaustion for self-replicating technologies.

Stanford Law's Sherkow said the justices typically steer clear of often complicated patent cases. In this instance, they will likely grapple with the lower court's definition of a doctrine of patent exhaustion and whether it applies to Monsanto's licenses.

"When is a sale really a sale?" Sherkow asked. "What if I sell something to you but it's not really a sale because you can only do certain things with it?"

The Court of Appeals for the Federal Circuit ruled Monsanto could attach conditions to the selling of its products such as the licenses. But the Supreme Court hasn't delved deeply into that issue, Sherkow said.

More broadly, he said, that issue could apply to many other industries that would like to exercise greater control over the use -- and secondhand sale -- of their products. Software and nanotechnology, Sherkow said, are just two examples of industries that could be affected by the ruling.

"If the court gives a lot of leeway to what is considered a conditional sale, I think this will have a lot of downstream effects for consumers -- not just in seed, but all areas of technology where companies want to increase their revenues through downstream sales," he said.

For Walters, Bowman's attorney who took the case pro bono, the case is better viewed through the circumstances of a single farmer.

"It's just one small step," he said, "but it could lead to a great impact in terms of shifting rights back to the farmer."

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