Supreme Court Declines to Issue Broad Guidance on Self-Replicating Articles

On May 13, 2013, the Supreme Court of the United States issued a unanimous opinion affirming the Southern District of Indiana and Federal Circuit in Bowman v. Monsanto Co., holding that the exhaustion doctrine did not permit a farmer to harvest soybeans with patented genetic resistance to pesticides for seed. The opinion did not, however, contain broader guidance for application of the exhaustion doctrine in the context of other self-replicating patented articles.

The facts before the Court were straightforward: Monsanto invented a generic modification for soybean plants that makes them resistant to the active ingredient in many herbicides (such as Monsanto’s Roundup), and obtained two patents on the technology, including a seed with the genetic alteration. Monsanto markets this seed as “Roundup Ready,” and sells it under a license that permits the grower to plant the purchased seeds in a single season, after which the grower may consume the crop or sell it as a commodity. Bowman, an Indiana farmer, would annually purchase pesticide-resistant (“Roundup Ready”) soybean seeds from Monsanto for his first planting of the year. After his first harvest of the year, however, Bowman purchased commodity soybeans (intended for human or livestock consumption) from a local grain elevator and planted the soybeans, later applying Roundup to kill the non-resistant plants and then harvesting the resulting resistant soybeans for use as seed in the next season.

Monsanto sued Bowman for patent infringement, contending his harvest of pesticide-resistant soybeans constituted an impermissible “make and use” of its patented soybean seed. Bowman defended that his use of the soybeans to grow resistant seed was noninfringing, because they were obtained from soybeans that had been the product of a prior authorized sale (from local farmers to the grain elevator). See Quanta Computer Inc. v. LG Elecs., Inc., 553 U.S. 617, 625 (2008). In other words, Bowman argued that the sale of Roundup Ready soybeans exhausted Monsanto’s patent rights in the seed, permitting enterprising farmers like himself to use the soybeans for one of their natural uses—generating additional generations of soybean seeds.

The Supreme Court rejected this argument, holding that the doctrine of exhaustion applies only to the particular article sold, and does not permit a buyer to create new copies of the patented item. That the “manufacture” of new Roundup Ready soybeans could be accomplished by leaving purchased (and therefore patent-rights-exhausted) soybeans in an appropriately tended farm field does not change the result.

Though the Court recognized that self-replicating inventions “are becoming ever more prevalent, complex, and diverse,” the Court nonetheless confined its analysis to patented seed. Additional guidance for patent owners and article purchasers regarding their respective rights will have to wait for future cases.