The Supreme Court on April 2, 2012, invited the Solicitor General to file an amicus brief expressing the government's views on a Federal Circuit decision that patent rights in second generation seed are not limited by the exhaustion doctrine. Bowman v. Monsanto Company, U.S., No. 11-796, CVSG issued 4/2/2012.
Monsanto sells its patented, genetically-altered seed subject to a Monsanto Technology Agreement that licenses the use of its patented seed while limiting the uses of seed produced by the crop of the genetically altered seed (second generation seed). However, growers are authorized to sell the second generation seeds to local grain elevators as a commodity with no restrictions on the subsequent sales of the seeds. Bowman purchased commodity seed from local grain elevator, replanting second generation seeds from that crop during the following years.
Monsanto filed suit against Bowman, and the district court granted a summary judgment of infringement to Monsanto.
Federal Circuit Decision
At the Federal Circuit, Bowman argued that the second generation seed was a substantial embodiment of the patented seed, and that Monsanto's patent rights were therefore exhausted by the authorized sale of the second generation seed to grain elevators. The "substantial embodiment" test was used by the Supreme Court in Quanta Computer, Inc. v. LG Electronics, Inc., 552 U.S. 617 (2008).
The Federal Circuit affirmed the district court decision. Although Monsanto may have exhausted its rights as to the seeds sold to the grain elevators, Judge Linn wrote, it did not exhaust its right to second generations of those seeds, which constitute “a newly infringing article.” Replanting and creating new second generation seeds from the commodity seeds is not the “only reasonable and intended use,” the court explained.
“While farmers, like Bowman, may have the right to use commodity seeds as feed, or for any other conceivable use, they cannot ‘replicate' Monsanto's patented technology by planting it in the ground to create newly infringing genetic material, seeds, and plants,” Judge Linn pointed out.
To read the Federal Circuit opinion, click here.