In 1994, Monsanto patented a type of genetically modified soybean that was able to resist its Roundup herbicide. The company called the soybeans Roundup Ready, and the seeds grew wildly popular, and today, Roundup Ready soybeans account for more than 90 percent of soybeans sold in the US. The crop is "probably the most rapidly adopted technological advance in history," said Monsanto's lawyer, Seth Waxman, arguing the Bowman v. Monsanto case at the Supreme Court today.
Monsanto found itself before the court today because its control over subsequent generations of soybean crops is being challenged by a 75-year-old Indiana man who farms a relatively small plot of soybeans—just 300 acres of soybeans, corn, and wheat in all. “I’m not even big enough to be called a farmer," he told the New York Times, speaking for an interview in the run-up to his big day in court.
In a way, this case originated because Monsanto is a "victim" of its own success. Like many soybean farmers, Bowman plants two crops per year. He bought patented Monsanto seeds to plant his first crop. The second crop would be planted after the winter wheat crop, and would be more likely to fail. For this riskier crop of "wheat beans," Bowman didn't want to pay the high price for patented seeds, so he bought soybeans from a grain elevator, knowing they would be a mix of various grains. Buying from a grain elevator, he didn't have to sign the agreement Monsanto usually compels farmers to sign, agreeing not to re-plant future generations of seeds.
Still, since Monsanto beans are so ubiquitous, Bowman knew the great majority would be Roundup Ready. Bowman was able to go ahead and spray his crops with Roundup, knowing they would nearly all benefit from having the Roundup Ready traits.
That practice led to him being sued by Monsanto. Bowman was found to infringe Monsanto's patent, and ordered to pay more than $30,000; with costs and interest, that's grown to more than $84,000. Bowman's legal argument is that he's protected by the "first sale" doctrine, and that Monsanto's patent rights are exhausted after the first sale. But Monsanto said that Bowman was making a replica of its patented beans, which shouldn't be allowed for any generation of beans.
Reading a transcript of today's oral arguments, it's clear that Bowman is unlikely to be able to fight off Monsanto in this battle. The justices were almost universally skeptical of his argument that Monsanto was asking for a special rule or exception to patent law. Chief Justice John Roberts immediately picked up Monsanto's idea that its giant investment in Roundup Ready would be eviscerated if farmers like Bowman were able to propagate its patented crops.
"Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?" asked Roberts.
Justice Stephen Breyer, who is one of the justices most skeptical of broad patent rights historically, suggested that Bowman was allowed to create one generation of crops from the seeds—and that was it.
"One, you can't pick up those seeds that you've just bought and throw them in a child's face," said Breyer. "You can't do that because there's a law that says you can't do it. Now, there's another law that says you cannot make copies of a patented invention. And that law you have violated when you use it to make [another] generation, just as you have violated the law against assault were you to use it to commit an assault."
Justice Sonia Sotomayor suggested that patent "exhaustion" doesn't apply when it comes to technologies that can replicate themselves. "The Exhaustion Doctrine permits you to use the good that you buy," she said. "It never permits you to make another item from that item you bought."
The US government also weighed in on this case; it originally said the Supreme Court shouldn't take it, and then sided with Monsanto once the case got taken up anyhow. Melissa Sherry, the government's lawyer, told the court today that reducing a 20-year patent term to one sale in this case would make it "near impossible to recoup your investments," and that research dollars could go outside the US.
"That's a pretty horrible result, but let me give you another horrible result," said Justice Antonin Scalia, pushing back. "If we agree with you, farmers will not be able to do a second planting by simply getting the undifferentiated seeds from a grain elevator, because at least a few of those seeds will always be patented seeds, and no farmer could ever plant anything from a grain elevator," said Scalia. That would make it hard to plant a cheap crop commensurate with the risk, as Bowman had done.
But there was also testimony before the court that Bowman's practice of buying undifferentiated "bin run" seeds from a grain elevator, isn't accepted or commonplace. CHS Inc., the largest grain distributor in the US, said as much in its amicus brief [PDF] on the case. CHS contested Bowman's argument that using mixed grain from elevators as seeds for a new generation of plants is a typical practice; the business of seed-selling has higher profit margins, notes CHS, and requires sellers to follow seed labeling laws.
Justice Elena Kagan suggested that considering how dominant Roundup Ready seeds are in the market, a decision in Monsanto's favor "has the capacity to make infringers out of everybody."
Monsanto lawyer Waxman assured her that soybean crops can't be blown by the wind into other fields, so inadvertent infringement of that sort is unlikely to happen, and couldn't be enforced. And in any case, "size—that is, success—has never been thought and can't be thought to affect the contour of patent rights," said Waxman. If Monsanto controls how 90 percent of the nation's soybeans are grown, in other words, they earned it.
This case comes to the Supreme Court from the US Court of Appeals for the Federal Circuit, the nation's top patent court. Over the past several years, the Supreme Court has often stepped in to limit the power of patents, keeping the Federal Circuit in check. That doesn't appear likely to happen in this situation, however.