In a case, Bowman v. Monsanto, U.S. Supreme Court opinion 11-796, respondent Monsanto
invented and patented Roundup Ready soybean seeds, which contain
a genetic alteration that allows them to survive exposure to the
herbicide glyphosate. It sells the seeds subject to a licensing
agreement that permits farmers to plant the purchased seed in one,
and only one, growing season. The license permits growers to consume
or sell the resulting crops, but may not save any of the harvested
soybeans for replanting.
Under the patent
exhaustion doctrine, “the initial authorized sale of a patented
article terminates all patent rights to that item,” Quanta
Computer, Inc. v. LG Electronics, Inc., 553 U. S. 617, 625, and
confers on the purchaser, or any subsequent owner, “the right to
use [or] sell” the thing as he sees fit, United States v. Univis
Lens Co., 316 U. S. 241, 249–250. However, the doctrine
restricts the patentee’s rights only as to the “particular
article” sold, id., at 251; it leaves untouched the patentee’s
ability to prevent a buyer from making new copies of the patented
item
\ In
May 2013, the Supreme Court held: Patent exhaustion does not permit
a farmer to reproduce patented seeds through planting and harvesting
without the patent holder’s permission.
In
its opinion, the Court stated:
Monsanto sells, and allows other companies to sell, Roundup Ready
soybean seeds to growers who assent to a special licensing agreement.
That agreement permits a grower to plant the purchased seeds in one
(and only one) season. He can then consume the resulting crop or sell
it as a commodity, usually to a grain elevator or agricultural
processor. But under the agreement, the farmer may not save any of
the harvested soybeans for replanting, nor may he supply them to
anyone else for that purpose.
In
this case, the farmer used the seeds for eight consecutive crops.
The Supreme Court agreed with Monsanto that he only had permission
for the first crop. The farmer raised the defense of patent
exhaustion by claiming that Monsanto could not control his use of the
beans as they were subject to the prior authorized sale to place he
purchased the seeds from. The District Court rejected the defense
and awarded damages to Monsanto of $84,456. The Federal Court agreed
with this decision and later the Supreme Court affirmed. The Patent
Act grants a patentee the “right to exclude others from making,
using, offering for sale, or selling the invention.” 35 U.S.C.§154(a)(1). The Supreme Court decided that the farmer was
replicating Monsanto’s seed by making more and using them thereby
infringing on the patent owned by Monsanto.
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