The Supreme Court today asked tough questions about an Indiana soybean farmer who's challenging agricultural giant Monsanto Co.'s patents for genetically modified seeds.
The justices quickly bore in on Vernon Bowman's lawyer about whether the farmer violated Monsanto's patents when he planted seeds that were the offspring of the company's herbicide-resistant crops.
If the self-replicating seeds that contained patented technology could be planted and grown, Chief Justice John Roberts asked, "why in the world would anybody spend any money to improve seeds?"
Bowman used Monsanto's Roundup Ready seeds from 1999 to 2007, buying them from a Monsanto-authorized dealer. In so doing, Monsanto argues that the farmer agreed to a license agreement that says a customer may plant the original seeds but cannot plant or sell their progeny. The agreement does allow farmers to sell the second-generation seeds to grain elevators, where they are typically used for animal feed.
In an effort to save money for his second -- and riskier -- planting of the season, Bowman purchased seed from a grain elevator and planted it. Because most of that seed came from Roundup Ready soybeans, it also contained Monsanto's patented technology.
The 75-year-old farmer maintains that he did nothing wrong and that farmers have been buying and planting cheap seed from grain elevators for decades. He also asked Monsanto whether he was breaking any rules by using the grain elevator seed.
Specifically, Bowman contends that Monsanto's patent was exhausted after the original seeds were used, so the company does not have the right to restrict the use of the second-generation seeds.
But even the liberal justices seemed to take issue with Bowman's arguments. Justice Sonia Sotomayor argued that patent exhaustion doesn't protect Bowman in these circumstances.
"The exhaustion doctrine allows you to use the good you buy," she said. "It never permits you to make another item."
Bowman's lawyer, Mark Walters of Frommer Lawrence & Haug LLP in Seattle, sought to refute that notion and charged that if the court sided with Monsanto, it would be overturning precedents in patent law. The doctrine of patent exhaustion, he said, is designed to protect the rights of the purchaser, not the seller. Otherwise, he said, it would simply increase the patent holder's ability to increase sales and even have a monopoly over a product.
"If you believe that," Walters said, "you are eliminating patent exhaustion."
Monsanto contends that if it isn't allowed to attach protective license agreements, it will be put at a disadvantage in the marketplace because farmers could heavily rely on the second-generation seeds (Greenwire, Feb. 15).
The chemical giant took Bowman to court, eventually winning an $85,000 penalty. On appeal, the U.S. Court of Appeals for the Federal Circuit, which handles patent issues, also agreed with Monsanto. In its ruling, the appeals court carved out an exemption to patent exhaustion for self-replicating technologies.
Clinton administration Solicitor General Seth Waxman, arguing on behalf of Monsanto, said Bowman admitted he hoped that the seeds he purchased from the grain elevator contained Monsanto's genetic modifications.
"He would use Monsanto's technology and not pay for it," Waxman said.
But Waxman also faced tough questions. Justice Elena Kagan asked whether there was a problem because of the ubiquity of Monsanto's genetically modified seeds.
"Your position has the capacity to make infringers out of everybody," she said.
Waxman acknowledged how widespread Monsanto's seeds are but added that "size and success" should not influence the court.
The justices also grappled with whether they should address conditional sales such as the one Bowman entered into when he initially bought seeds from a Monsanto-authorized dealer.
How the court rules could have significant implications for biotechnology and several industries that create self-replicating technologies, such as software and nanotechnology. Several dozen companies and trade association have filed briefs to the court supporting Monsanto's position.
Farmer and food safety advocates, however, back Bowman. They argue that the case is another example of a major seed and pesticide maker seeking to strong-arm farmers. If the court sided with Bowman, they contend, it would be an important step in restoring some balance to that relationship.