The Supreme Courts in both Canada and the United States have now rejected farmers' claims that Monsanto's patents on glyphosate-resistant plants should not apply to the replanting and/or re-use of seed from such plants. In Bowman v. Monsanto Company, 133 S. Ct. 1761 (2013), the U.S. Supreme Court held that the patent exhaustion doctrine prevented Hugh Bowman, an Indiana farmer, from replanting Roundup Ready soybeans harvested from plants grown with seeds purchased from Monsanto pursuant to a patent license agreement. The license agreement permitted Bowman to use the glyphosate-resistant seed for a single crop but prohibited him from replanting soybeans cultivated from such crops.
According to the U.S. Supreme Court, the patent exhaustion doctrine applies only to the first sale of a patented item; that is, a patent holder may not sell a thing embodying a patented technology and then seek further royalties based on the subsequent use, consumption or resale of that thing. The patent exhaustion doctrine, however, does not give the purchaser the right to replicate or make copies of the patented thing. In other words, the patent exhaustion doctrine is not a patent license. (A patent license typically gives the licensee the right to make and sell the invention.)
The U.S. Supreme Court reasoned that if the patent exhaustion doctrine allowed the purchaser of a patented thing to replicate that thing (for example, by replanting seeds and growing more glyphosate-resistant plants), then a patent would only ever be good for a single transaction. Such a result, the Court concluded, would effectively eviscerate patent protection in the United States and stifle incentive for innovation. In short, the Court held that the patent exhaustion doctrine applies only to the particular item sold and not to reproductions of that item.
The Canadian Supreme Court grappled with a similar case in 2004, but the legal issue before the Court was not whether the patent exhaustion doctrine applied but rather whether the principle that higher life forms are not patentable--previously established by the Canadian Supreme Court--applied to plants. (Click here for our article on this decision.) The Canadian Supreme Court held that it did not, and as a result, the Court found that a Saskatchewan canola farmer infringed Monsanto's patent by saving and replanting seed from glyphosate-resistant canola plants.
The U.S. Supreme Court's decision in the Bowman case was handed down nine years after the Canadian Supreme Court's decision in Schmeiser v. Monsanto Canada Inc., but the result is the same: farmers may not replant seed from Roundup Ready plants and "replicate" the patented plant. This is true regardless of whether the seed is purchased from a grain elevator, generated from plants grown under a license from Monsanto, or blown into a farmer's field from a neighboring field (as was the case in Schmeiser).
One of the two U.S. patents at issue in the Bowman case has since expired, and the other expires next year. Although we are unlikely to see similar cases involving these patents in the future, the Bowman case stands for the proposition that the patent exhaustion doctrine will not be widely interpreted to constitute a perpetual, royalty-free license. These issues are not so complicated when dealing with ordinary things (as in a piece of machinery), but they become more complicated when dealing with self-replicating things (like some plants). The U.S. Supreme Court clearly stated in its opinion that Bowman applies to the facts of that case only and not to any other forms of self-replicating inventions (like software).
