Court treads carefully in seed patent ruling

Decision does not answer questions about patent exhaustion

By Kimberly Atkins
The Daily Record Newswire
 
BOSTON — The U.S. Supreme Court’s surgically narrow ruling prohibiting a farmer from using seeds harvested from patented herbicide-resistant soybeans has left lawyers with more questions than answers about the extent of patent owners’ rights in other emerging, self-replicating technologies.

In its decision in Bowman v. Monsanto Co., a unanimous court held that the doctrine of patent exhaustion did not allow an Indiana farmer to use second-generation soybean seeds without the permission of the patent holder, St. Louis-based agricultural giant Monsanto Co. But the justices were careful not to delve too deeply into the related issues involved in the case, attorneys said.

“We talk about the doctrine of patent exhaustion, and we are not sure what that means,” said Christopher M. Holman, a professor at the University of Missouri-Kansas City School of Law, who wrote an amicus brief in the case in support of Monsanto. “The decision is not answering my questions about what patent exhaustion is or how far it goes.”

The farmer, Vernon Bowman, had argued that the exhaustion doctrine, also known as the first sale rule, prevented Monsanto from claiming patent infringement after the first authorized sale of the patented seeds.
Bowman had purchased Monsanto’s Roundup Ready soybean seeds under the company’s license to plant a crop, but harvested and saved some of the self-replicating seeds from that crop to replant. He also sold and repurchased the seeds via a grain elevator.

In an opinion authored by Justice Elena Kagan, the court found that the exhaustion doctrine could apply in some situations to allow subsequent use of the seeds — just not in Bowman’s case.

“Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased [or] consume the beans himself or feed them to his animals. Monsanto, although the patent holder, would have no business interfering in those uses of Roundup Ready beans,” Kagan wrote. “But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission (either express or implied). And that is precisely what Bowman did.”

But the court took a conservative approach by expressly limiting the ruling to the facts of the case, leaving lawyers to wonder whether the same rationale will be applied to other types of self-replicating technologies both within and outside the biotech field, such as cell lines and electronic software.

“That is a big area people are concerned about, and we don’t have a sense of that yet,” said Jennifer L. Fox, a research scientist and patent attorney in the Durham, N.C., office of Brinks, Hofer, Gilson & Lione.

More tension between law and technology?

The court’s measured approach in this case echoes the uneasiness the justices have expressed in the past about making sweeping legal rulings in cases involving emerging and advancing technologies. For instance, in cases involving the warrantless use of cellphone and GPS tracking data, the court has often opted to make limited rulings to avoid unintended consequences — or to avoid detailed analysis of difficult-to-understand technical data.

“My sense is that the court didn’t do a good job in looking at the underlying technology, and how much the process of making the seed involves a natural process that would not be patentable and how much falls within the rights of the patent owner,” said Shubha Ghosh, professor at the University of Wisconsin Law School and author of an amicus brief on behalf of the National Farmers Union and other groups in support of Bowman. “I think they kind of lumped everything together instead of taking it apart.”

Though the justices may be attempting to take a careful approach by not saying too much, in the practical realities of patent practice the devil is in often in the details.

“For example, it is generally established that if you have the right to use [a patented product], the repair of that product is also permitted,” Ghosh said. “But that’s tricky, because sometimes repairing that product may in effect be making another version of that product. … It’s a technical issue, but it’s very important.”

Gary H. Baise, a principal in the Washington office of Olsson Frank Weeda Terman Matz who authored an amicus brief in support of Monsanto on behalf of a host of soybean associations from states including Michigan, Minnesota, Missouri, Virginia and Wisconsin, said the court did exactly what it set out to do: answer the question about patent exhaustion as it applies to soybean farmers. Protecting patents of soybeans is necessary to boost the agricultural industry and encourage innovation “and to support the advancement of technology for these commodities crops,” he said.

“If we are going to have any hope of feeding this planet’s ever-increasing population, we have a lot of work to do in agriculture” and enforcing patents such as Monsanto’s is an essential element, said Baise.

Good news for human gene patents?

The court may have unwittingly tipped its hand with respect to a case pending before it which considers whether human genes are patentable. Although a decision in the case Association of Molecular Pathology v. Myriad Genetics Inc. is not expected until late June, the Bowman ruling may be a sign of good news for the patent holder in that case.

The justices did not analyze the validity of the patent asserted in Bowman; the decision assumed its validity. But the soybean seed at issue “involves isolated DNA [and] the patent claim in that case is almost identical to the patent claim in the human gene case,” said Nancy Chiu Wilker, a member of the Life Sciences Practice Group of the Boston firm Sunstein Kann Murphy & Timbers.

In Myriad Genetics, the party challenging the patent asserts that the genetic material involved is a product of a nature that can’t be patented because it isn’t an invention. But the same argument can be made for self-replicating agricultural material such as the Monsanto soybean seeds, so the fact that the justices didn’t even blink at that patent could be a telling sign of what is to come.

While there is no way of telling ahead of time how the court will rule in any case, the Bowman ruling “makes me feel some comfort with respect to the upcoming human gene patent decision, [since] the court did not examine [Bowman’s] claim to determine whether the reissue patent was valid,” Wilker said.

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