Monsanto Co. has scored a win for its genetically altered seed patents at the U.S. Court of Appeals for the Federal Circuit. The decision was also a victory for Wilmer Cutler Pickering Hale and Dorr, including leading appellate advocate Seth Waxman, the chairman of its appellate and Supreme Court practice group in Washington.
In a Sept. 21 unanimous ruling, the court denied a farmer’s right to replant seeds obtained from a grain elevator that weren’t sold under a Monsanto license agreement but contained Monsanto’s patented technology. It also tackled the concept of patent exhaustion, which is when a patent owner no longer owns the rights to a patented product because the owner has sold the item in an unrestricted sale.
In Monsanto Co. v. Bowman, the Federal Circuit upheld a September 2009 summary judgment ruling by Judge Richard Young of the Southern District of Indiana. That ruling found that Vernon Hugh Bowman infringed two patents owned by Monsanto, an agricultural biotechnology company, for genetically altered soybean seeds. Young awarded Monsanto $84,456.20.
The patents are for Roundup Ready soybean seeds, which resist herbicides such as Monsanto’s Roundup product. Crops grown from the seeds can withstand herbicide spraying, which makes it easier for the farmers to control weeds.
Growers who buy the patented seeds from Monsanto or its licensed producers must abide by an agreement barring them from selling the progeny of the licensed seeds, known as "second-generation seeds," for planting.
The agreement does allow growers to sell second-generation seeds to local grain elevators as a commodity — such as for feed. Grain elevator operators sell commodity seeds, which are a mixture of undifferentiated seeds from many sources.
According to the opinion, Bowman, a grower in Knox County, Ind., bought some of Monsanto’s seed from licensee Pioneer Hi-Bred during the years 1999 through 2007.
In June 1999, Monsanto sent Bowman a letter notifying him of its patents covering the soybean seeds, which stated that the "[p]lanting of seed that is covered by a patent would be making the patented invention and using the patented invention." In 2002, Pioneer required Bowman to sign Monsanto’s agreement. In accordance with the agreement, Bowman used the Monsanto seeds for the first crop of his growing season in 1999 through 2007, and he did not save seeds from those plants.
But Bowman also bought commodity seed from a local grain elevator to plant as a second crop in 1999. He saved seeds harvested from the second crop to replant second crops in later years, and continued to buy commodity seeds for each year’s second crop as needed.
Monsanto sued Bowman for patent infringement in October 2007 because the progeny of the commodity seeds contained its patented seed technology.
Judge Richard Linn authored the ruling, joined by judges William Bryson and Timothy Dyk.
The Federal Circuit agreed with the district court that patent exhaustion does not apply to Bowman’s second-crop plantings. "Even if Monsanto’s patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like Bowman, plants the commodity seeds containing Monsanto’s Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article," Linn wrote.
The court found that while farmers like Bowman may use commodity seeds as feed or for other purposes, "they cannot ‘replicate’ Monsanto’s patented technology by planting it in the ground to create newly infringing genetic material, seeds, and plants."
The decision is completely in line with long-standing precedent, said Waxman, one of the lawyers at Wilmer who represented Monsanto. "It underscores [that] meaningful patent protection for Monsanto’s self-replicating technology is essential to the advances in biotechnology that the overwhelming number of American farmers want," Waxman said.
The ruling is an important protection for innovation, not just for Monsanto, Waxman said. "It’s [good for] anybody who is innovating and producing useful new inventions in the area of biotechnology generally and self-replicating biotechnology in particular."
Lawyers at Thompson Coburn of St. Louis also represented Monsanto.
In a statement, Monsanto’s associate general counsel for litigation, Kyle McClain, said that the key issue in the case "was whether Monsanto’s intellectual property rights extend to second generation seeds."
"The decision by the Federal Circuit Court of Appeals reaffirmed important intellectual property rights of significance to the entire agricultural biotechnology industry," McClain said.
Mark Walters, a Seattle partner at Frommer Lawrence & Haug who argued for Bowman at the Federal Circuit, said he and his client are weighing their options, including filing a petition for an en banc re-hearing.
"We are disappointed that the decision follows the line of cases [that started with the Federal Circuit’s 1992 decision Mallinckrodt Inc. v. Medipart Inc.], which stand in conflict with over a century of Supreme Court law on patent exhaustion," Walters said.
Mallinckrodt reversed a district court ruling that a patent holder’s restriction on reuse was unenforceable under the patent law.
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