Biotech industry celebrates Monsanto’s Supreme Court victory in seed-patent case

2013-05-14T09:01:00Z Biotech industry celebrates Monsanto’s Supreme Court victory in seed-patent caseBy Georgina Gustin Lee Enterprises Iowa Farmer Today

Vernon Hugh Bowman, a southwest Indiana farmer, thought he had figured out a cheap and legal way to use Monsanto’s genetically engineered soybeans.

On Monday, the U.S. Supreme Court ruled — unanimously — he had not.

The court said Bowman, 75, violated the company’s patent on soybeans by planting the offspring of those beans without permission.

“The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder’s permission,” wrote Justice Elena Kagan in a straightforward decision for the court. “We hold that he may not.”

The case was closely watched by the biotechnology industry and beyond.

Supporters of Monsanto, from Microsoft to the University of Missouri, said a decision for Bowman would have struck at the core of Monsanto’s business — its rigorously protected seed technologies — and could have had a massive chilling effect on a wide range of research in a wide range of fields.

“It confirmed, unanimously, that any product that’s capable of being replicated, either by planting by seed, or a bacterial cell line, or a preparation of DNA — that patent law applies, even if a product is replicable, in the same way it applies to widgets or cellphones,” said Hans Sauer, deputy general counsel for BIO, the biotechnology industry’s trade group. “If you want two, you have to buy two.”

Monsanto’s near-ubiquitous soybean technology allows plants to survive application of glyphosate, which is sold under the Monsanto brand Roundup.

Bowman, like the majority of U.S. soybean growers, bought the soybeans every year from a dealer, thereby entering into a contract with Monsanto saying he agreed not to plant the offspring of those soybeans.

But, Bowman, wanting to plant a second, late-season, riskier crop decided to try a cheaper route. He bought soybeans from a local grain elevator and planted those.

The soybeans sold at the elevator are only allowed to be sold for animal feed or food — not for replanting — and don’t require the purchaser to enter into an agreement.

But, Bowman planted them, then sprayed glyphosate. The plants that survived, he knew, were glyphosate-resistant, or Roundup Ready.

In other words, they contained Monsanto’s patented genetically engineered traits.

Bowman took those seeds and planted them the next year and for the subsequent seven years.

Monsanto learned of this and sued in 2007, calling Bowman’s strategy an end run around its highly circumscribed patent.

A district court ruled in the company’s favor, as did the U.S. Court of Appeals, upholding a judgment against Bowman for more than $84,000. Bowman then took the case upward.

The justices heard oral arguments in Bowman’s case in February, grilling his attorney in a manner that seemed to bode well for Monsanto.

Dozens of briefs were filed in Monsanto’s support, from universities to software companies, all concerned a decision against Monsanto could have a chilling effect on innovation and research.

That the court’s decision was unanimous and clear-cut suggested to some watching the case that, perhaps, the justices had a change of heart after reading the barrage of briefs in Monsanto’s favor.

“I think the court realized that they had no reason to grant review. They simply validated what the district court said,” explained Peter Carstensen, a law professor at the University of Wisconsin who filed a brief in Monsanto’s favor.

“The only reason to take a case for review is if you think the federal circuit made a mistake. It takes four justices to get a case reviewed, and those four justices disappeared.”

So, Monday’s decision did not come as much of a surprise for many.

Still, it was a disappointment for Bowman’s supporters, including food advocacy, farming and antitrust watchdog groups that believe Monsanto’s rigorous patent enforcement has led to consolidation in the seed industry and to rising prices.

In a report issued earlier this year, the Center for Food Safety, a Bowman supporter in the Supreme Court case, said three companies — Monsanto, Dow and DuPont — now control more than half of the global seed market.

The report also said soybean seed prices have risen more than 300 percent since genetically engineered soybeans first hit the market in 1996.

“The court protected Monsanto rather than farmers,” said Andrew Kimbrell, executive director of the center. “It’s just not logical that they’d treat a plant as a machine.”

Existing patent law says that once someone buys a patented item, they can do whatever they want with that item — that the patent is “exhausted” once the item is sold.

What was not clear, however, was how patent law extended to self-replicating technologies, particularly those that replicate naturally, like plants.

The court, in its Monday decision, said that in this particularly case, it was clear.

“The exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission (either express or implied),” Kagan wrote.

“And, that is precisely what Bowman did.”

The decision left some wiggle room — and some hope — for other related patent-infringement matters that concern some farmers, particularly those worried about being sued by Monsanto for inadvertent planting of patented crops.

“The fact that the justices said this doesn’t have to do with accidental growth is a warning to Monsanto,” said Yvette Liebesman, a law professor at St. Louis University. “They won on this round.”

The biotechnology industry, meanwhile celebrated Monday’s decision.

“It’s a good thing for stability in the industry, which is what biotech needs,” Sauer said, adding, “An exception was being asked for and the court said, ‘No exceptions.’ ”

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