By Donald Zuhn —

In an amicus brief filed in support of respondents Monsanto Co. et al. last month,
the Washington Legal Foundation (WLF) asked the Supreme Court to affirm that
petitioner Vernon Bowman infringed Monsanto's patents on glyphosphate-resistant
soybeans because Monsanto never authorized Mr. Bowman to "mak[e]"
Roundup Ready® soybeans from the commodity seeds he purchased from the local
grain elevator.  The WLF, which describes itself as a public
interest law and policy center with supporters in all 50 States, writes that:

The nation's farmers have experienced tremendous
advances in seed technology in recent years, thanks in large measure to major
expenditures for research and development in this area by Respondent Monsanto
Co. and others.  WLF is concerned that
the extremely broad interpretation of the patent exhaustion doctrine espoused
by Petitioner would, if accepted by the Court, throw into question the nation's
ability to sustain those advances.  That doctrine
has never previously been understood to permit purchasers of a patented product
to "use" the product to create an entirely new product on the
template of the original.

The case arose as the result
of a farmer (Mr. Bowman) replanting Monsanto's patented Roundup Ready®
seed.  Mr. Bowman had purchased the seed
from one of Monsanto's licensed seed producers, with the sale being subject to
a Technology Agreement that permitted Mr. Bowman to, inter alia, "use the seed containing Monsanto gene
technologies for planting a commercial crop only in a single season" and
"not save any crop produced from this seed for replanting, or supply saved
seed to anyone for replanting." 
While Mr. Bowman complied with these provisions with respect to a first
planting, Mr. Bowman used cheaper "commodity seed" (i.e., seed obtained from local grain
elevators) in a second planting.  After
planting the commodity seed, Mr. Bowman tested the second crop for Roundup®
resistance, and found that substantial amounts of the seed were resistant.  He then used Roundup® on these
plantings and replanted this seed.  The District Court granted summary
judgment of patent infringement and entered judgment against Mr. Bowman, and the
Federal Circuit affirmed.

In the first part of its
brief, the WLF briefly outlines the history of the patent exhaustion doctrine,
noting that the doctrine "was born of a desire to promote efficiency in
economic transactions," and that "[t]he courts concluded that the
greatest efficiency could be achieved if, in general, patentees were required
to be paid their entire royalty (i.e.,
the value added to the product by virtue of the patentee’s monopoly rights) at
the time of first sale."  The WLF
brief explains that:

The exhaustion doctrine assumes that in an
efficient market, the patentee on average will receive a fair royalty — no
more and no less — each time one of his patented products is placed into the
stream of commerce.  That assumption
cannot be squared with Bowman's contention, because if (as he contends) the purchaser
of a single Roundup Ready® soybean seed can parlay that seed into a thousand
new seeds, the commercial use of those thousand seeds will generate only one
royalty for Monsanto.

In summarizing its argument
that the patent exhaustion doctrine did not grant Mr. Bowman the right to make
an unlimited number of new copies of the patented invention from commodity
seed, the WLF writes that:

[C]ase law indicates that the patent exhaustion
doctrine developed as a means of promoting efficiency in economic transactions
and of preventing the patentee from imposing unreasonable restraints on trade
as a means of deriving a profit in excess of what his invention warranted.  It was never intended to protect purchasers,
once they acquire title to a patented item, against all incursions on their
"right" to do with as they please with their property.

Understood in that light, the patent
exhaustion doctrine is inapplicable to this case.  It would be applicable only if, as Bowman
contends, his naked title to the commodity seeds (and to the infinite
generation of soybeans seeds that might follow) were sufficient to permit him
to do whatever he desires with his property. 
But simply because Bowman held title to the second-planting soybeans
does not mean that the patent exhaustion doctrine gave him the unlimited right
to make, sell, and use those soybeans.  The
patent exhaustion doctrine has always presupposed a "first sale" of
some sort, and Monsanto never sold Bowman any rights with respect to the
second-planting soybeans.

The WLF brief also argues
that the Supreme Court's precedent on repair/reconstruction supports
affirmance.  While acknowledging "that
there are many close cases, where the line between repair and reconstruction is
not easily drawn," the WLF declares that "this is not a close
case," adding that "[t]here is no plausible argument that the second-crop
glyphosate-tolerant soybeans grown by Bowman were simply repaired versions of
the commodity seed that he purchased from the grain elevator."  Instead, the WLF brief states that
"Bowman's careful cultivation of second-crop soybeans constituted the
'making' of a product that is protected by Monsanto's patents."

The WLF brief also addresses
the arguments of several amici
writing in support of Mr. Bowman, who "have largely ignored patent
exhaustion case law and instead have focused on alleged environmental harms
that supposedly flow from use of Roundup Ready® crops."  Arguing that such allegations are not
well-founded, the WLF counters that "[b]y enabling farmers to use
glyphosate rather than other herbicides, Roundup Ready® technology offers
several economic and environmental benefits," explaining that "Roundup
Ready® technology has replaced more toxic pesticides, enabled farming practices
that promote conservation, bolstered yield protection, and boosted farmers'
incomes."

Patent Docs plans to review a number
of the briefs filed in this case, including the briefs on the merits filed by
the petitioner and the respondents, as well as several of the amicus
briefs that were filed.  According to an updated docket for this case on
the Supreme Court website, amicus briefs have been filed by Knowledge
Ecology International, the Automotive Aftermarket Industry Association et al.,
the American Antitrust Institute et al., the Public Patent Foundation,
the Center for Food Safety and Save Our Seeds, the United States government,
BayhDole25, Inc., the Intellectual Property Owners Association, CropLife
America, BSA – The Software Alliance, the American Seed Trade Association, the
Washington Legal Foundation, the Biotechnology Industry Organization, CropLife
International, the American Intellectual Property Law Association, Ecomonists, law
professor Christopher M. Holman, CHS Inc., Agilent Technologies, Inc., et al., Wisconsin Alumni Research
Foundation, et al., the American
Soybean Association, et al., and
Pioneeer Hi-Bred International, Inc.  Argument for the case is scheduled
for February 19, 2013.

For additional information
regarding this topic, please see:

• "U.S. Government
Requests Argument Time in Bowman v.
Monsanto — at Monsanto's Expense," February 5, 2013
• "It Ain't Necessarily So Down on the Farm: Not
All Farmers Agree with Farmer Bowman in Bowman
v. Monsanto," January 31, 2013
• "BayhDol25 Files Amicus Brief in Bowman v.
Monsanto," January 30, 2013
•
"Government Sticks to Its Guns in Bowman
v. Monsanto Amicus Brief," January 28, 2013
•
"IPO Files Amicus Brief in
Support of Respondents in Bowman v.
Monsanto," January 24, 2013

By Kevin E. Noonan —

In
a paper filed earlier this week by Solicitor General Donald Verrilli, Jr., the
U.S. government has asked the Supreme Court for leave to present ten minutes of
 argument in Bowman v. Monsanto.  The
request is not unusual or controversial — but the apportionment of argument
time requested by the SG is.

In
the paper, the Solicitor asks the Court to alot its ten minutes from Monsanto's
argument time, reducing that time from 30 to 20 minutes.  The rationale for this request is that the
government "mostly" agrees with Monsanto's position that the Court
should affirm the Federal Circuit's decision in Monsanto's favor.  However, the government identifies Bowman's position
that the Federal Circuit's "conditioned sales" doctrine in its Malinckrodt line of cases as an area in
which it agrees with Farmer Bowman — i.e.,
that these decisions are inconsistent with the Court's decision in Quanta Computer v. LG Electronics and asks
to be able to presents its argument on this issue to the Court.  This basis for the request is a little
paradoxical, seeing that the government agrees with Monsanto that the Federal
Circuit's opinion below did not rely on the conditioned sales doctrine and thus
that the doctrine and the Malinckrodt
cases are not at issue before the Court in this case.

Monsanto
has no objection to the government presenting its arguments, but has not
consented to the SG's request, believing a 25-25-10 minute split is more
equitable.  But Farmer Bowman is
unwilling to give the government any of his time, and hence the current
petition to the Court.  Alternatively,
the SG asks the Court to grant it ten minutes of argument in addition to the
thirty minutes for each party.

The
government appears to want to eat its cake and have it, too, but perhaps
believing the Court's grant of certiorari
in the face of the SG's recommendation to the contrary has suggested to Mr.
Verrilli and his staff the Court might benefit from being able to question the
government directly on the issue.  Monsanto may have to take whatever solace it can find in the fact that
the SG's voice will join with theirs in arguing in favor of affirmance.