Farmer Sued for Patent Infringement for Saving Protected Seed
Here, Monsanto sued a farmer for patent infringement for planting the progeny of protected seed. The federal trial court granted summary judgment in favor of Monsanto, and the farmer appealed.
Monsanto developed technology for Roundup Ready soybeans and obtained patents protecting the company’s technology in 1996. Since 1996, Monsanto has marketed and sold Roundup Ready soybean seeds under its own licensing and all growers are subject to a standard limited-use license known as the Monsanto Technology Agreement (MTA). Under the MTA, the grower agrees to use the seed containing the gene for the planting of a commercial crop for only a single season, to not supply any of the seed to any other person for planting, and to not save any crop produced form the seed for replanting. The MTA, however, does not prohibit the grower from selling the seed to a cooperative or elevator and, in such situations, the grower does not have to secure a promise from the grain elevator not to sell the seeds for planting. However, problems do arise when the grain elevator does sell the grain for replanting.
Here, the defendant purchased seed containing the Roundup Ready trait and executed an MTA. In 1999, he purchased commodity seed from a local grain elevator for a late-season planting or “second-crop” planting. He purchased the commodity seed to avoid paying the higher price for the Roundup Ready seed. The farmer saved the seed from the second-crop planting for additional second-crop replanting in subsequent years. Monsanto investigated the defendant’s activities and sued the farmer for patent infringement based on the saving of seed. The trial court ordered the defendant to pay $84,456 to Monsanto for infringement.
The defendant appealed, arguing that Monsanto’s patent rights are exhausted with respect to the Roundup Ready soybean seeds present in grain elevators as “undifferentiated commodity.” According to the defendant, the sales of second generation seeds by growers to grain elevators and then from grain elevators to purchasers are authorized by the tech agreement and are exhausting sales. The defendant urged the court to adopt a “robust” exhaustion doctrine that encompasses the progeny of seeds and other self-replicating biotechnologies.
The court refused to adopt the defendant’s view and held that the licensed growers’ sales of second-generation seeds to grain elevators as commodity seeds did not exhaust Monsanto’s patent rights and a grower’s sale of harvested soybeans to a grain elevator is not an authorized sale when it results in those soybeans being planted. Here, patent exhaustion did not bar Monsanto’s infringement action. By planting the commodity seeds containing the Roundup Ready technology, the defendant created a “newly infringing article” in violation of the tech agreement. Farmers, like the defendant, cannot replicate the patented technology by planting it in the ground to create newly infringing genetic material. Monsanto Company and Monsanto Technology, LLC v. Bowman, No: 2010-1068, 2011 U.S. App. LEXIS 19303 (Fed. Cir. Sept. 21, 2011)
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