JEFFREY BROWN: And now to a legal case watched for its impact on agriculture and new technologies, as the Supreme Court today unanimously found a soybean farmer had violated a patent held by agri-giant Monsanto.
The decision came three months after an Indiana farmer, Vernon Hugh Bowman, had his day before the High Court. He ran afoul of Monsanto’s policy barring farmers from saving or reusing its expensive Roundup Ready soybean seeds from one year to the next.
Seen here in promotional videos, the genetically modified plants are designed to survive being sprayed with Monsanto’s herbicide Roundup. The seeds are patent-protected and the company requires that farmers buy a new batch with each season. Instead, over eight years, Bowman used grain from an elevator that was sold for animal feed and not as seed. He claimed that wasn’t a violation.
VERNON HUGH BOWMAN, Plaintiff: I just looked at it that when they dumped it in there, that they had abandoned their patent.
JEFFREY BROWN: Today, the court rejected that argument with a unanimous decision in favor of Monsanto. The case had been watched for implications in a host of other so-called self-replicating technologies, such as medical research and computer software.
In a statement, Monsanto’s lead lawyer said the outcome “provides assurance to all inventors throughout the public and private sectors that they can and should continue to invest in innovation that feeds people, improves lives, creates jobs, and allows America to keep its competitive edge.”
In fact, though, the justices appear to limit their decision. Justice Elena Kagan, speaking for the court, said it addresses this case only.
And for more on the case and the decision, we’re joined, as always, by Marcia Coyle of the National Law Journal. Marcia is in Chicago tonight.
So, 9-0. The court was quite definitive. What was the winning argument?
MARCIA COYLE, National Law Journal: Well, Jeff, the winning argument really was for Monsanto, which said that the reliance on the so-called patent exhaustion doctrine by the farmer in this case just didn’t carry the day.
I should tell you a little bit about the patent exhaustion doctrine. It basically says …
JEFFREY BROWN: Please do.
MARCIA COYLE: OK.
It basically says that after an inventor authorizes the sale of his patented invention or article, the buyer can use it or sell it. But what the buyer can’t do is make copies of it.
And there’s a very basic reason for that, because if a buyer could make copies and then sell those copies, and somebody else would make copies of the copies, pretty soon, there would be no value to the patent that the inventor holds. And the law allows patent protection now for about 20 years.
So even though Monsanto right now has a monopoly on its soybeans, it won’t have it forever. But this farmer infringed the patent by — he thought he had a way around the agreement with Monsanto. And that was to buy soybeans from a grain elevator and then plant them. He argued that basically he was using the seeds the way they were supposed to be used.
But Justice Kagan, who wrote the majority opinion, said, no, no, the seeds bought from a grain elevator are supposed to be used for consumption, not for planting.
JEFFREY BROWN: Well, so, before we get to the implications for other technologies, just staying on this case, one reason why this got so much attention is Monsanto’s very dominant position in agriculture, very …
MARCIA COYLE: Absolutely.
JEFFREY BROWN: Particularly with threat seeds, right?
MARCIA COYLE: Absolutely.
In fact, I think it’s something like 90 to 95 percent soybean farmers do buy from Monsanto, because the beans are resistant to, again, a Monsanto product that kills weeds. So they’re very valuable to the farmer.
JEFFREY BROWN: Now, the other reason, of course, why it got so much attention was because of the possible implications for other new cutting-edge technologies, specifically so-called self-replicating technologies.
Explain to us what that means.
MARCIA COYLE: Well, Jeff, there — right now, there’s a lot of research and development going on in a number of industries, biotechnology, medicine.
One of them has to do with self-generating cells, genetically modified cells, also, in what they call regenerative medicine that relies on self-replicating stem cells. And so the industries that are involved in this research and development are, of course, you know, very concerned about the kind of patent protection they’re going to get for their inventions.
I think Monsanto spent — spends in general over a billion dollars a year in research and development. And so these companies want to be able to recoup some of this investment. And that is — there is this tension in patent law. Patent law protects the invention long enough so that the companies can recoup their investments. On the other hand, it doesn’t last forever because we also want to encourage new inventions by others.
JEFFREY BROWN: At the same time, though, Justice Kagan went out of her way to say that this case is limited to this case, right, to this particular transaction. So where does that leave the law for all these other technologies?
MARCIA COYLE: Well, I think the other companies and other technology — who do other types of technologies do take some comfort in the fact that the court made clear what the patent exhaustion doctrine really does.
On the other hand, it does leave open for another day whether the invention that they invent, if it is self-replicating, how the Supreme Court is going to view patent protection for that particular invention. So, the court is being cautious here and leaving the door open. On the other hand, I think that companies do take some comfort in the ruling.
JEFFREY BROWN: And the farmer involved, Vernon Bowman, what happens with him?
MARCIA COYLE: Well, Mr. Bowman was found that he had infringed Monsanto’s patent. And he was — Monsanto was awarded about $85,000 dollars for the infringement.
So, Mr. Bowman is either stuck with paying that award. We will have to see what happens when the case goes back between him and Monsanto.
JEFFREY BROWN: All right, Marcia Coyle, as always, thanks so much.
MARCIA COYLE: My pleasure, Jeff.
JEFFREY BROWN: And, online, you can follow our coverage of pending cases on our Supreme Court page. There, you also can watch my conversation with Marcia about her new book on key moments in the Roberts court.