WLF Files Amicus Brief in Support of Respondents in Bowman v. Monsanto

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

Comments

[Mmm]

What I don't understand is how this case doesn't line up squarely within the reasoning of the exhaustion doctrine -- even described as the amicus here describes it.

Bowman acquired first generation seeds lawfully and on an unrestricted basis from someone who had the right to sell the first generation seeds. Patent rights were exhausted there.

He planted them and did what farmers had been doing with second generation seeds for thousands of years: replanted them. Unlike arguments from other cases, it's not like Bowman used the seeds for some unconventional purpose that is separately covered by a patent.

This case should just put this issue to rest. An unrestricted sale exhausts patent rights.

[Ummm]

If Bowman had re-sold the first-generation seeds - the ones he bought from Monsanto - then the exhaustion doctrine would be applicable. But Monsanto didn't sell Bowman the second generation seeds, and he certainly didn't buy the second generation seeds from Monsanto. So Monsanto's rights in those seeds couldn't possibly have been exhausted, and when Bowman planted them - i.e., used them - he infringed. And the sale here could hardly be considered unrestricted - Monsanto put significant contractual limitations in place concerning the downstream use of the seeds (and despite what the Solicitor General says, it's not clear that the Quanta case ruled out all such restrictions).

[Skeptical]

Q: "how this case doesn't line up squarely"

A: $

That is the most simple answer possible.

To add to that simple answer, the right to sell (and you are correct in that was truly unrestricted, albeit there are actually three sets of sales involved in this case:
1) Monsanto to initial farmer,
2) farmer to commodity broker, and
3) commodity broker to second farmer ) is impacted because of the special type of invention involved: one that features include as the inventive focal point a self-replicating ability.

To quarantine the semantics, we should come to the agreement that "self-replicating" means that (copies of) the invention are made through a NORMAL use of that invention. In this manner, all the smokescreens should be cleared out (and no one thinks that this invention is sold by Monsanto in THEIR initial sale to tofu producers or pig feeders).

In most typical inventions, one can fully use the invention for what that invention is intended to be used for (the true basis of exhaustion) and the issue of making new copies simply does not arise. In most typical inventions, that act of making is quite easily divorced - and reasonably so - from the act of using the invention for what the invented item was meant to be used for.

A critical factor for this case (and a fact that all too often seems swept aside), is that the invention itself by Monsanto centers on the planting and replication aspects. To use THIS INVENTION necessarily implicates the replication aspect. This invention simply was not to make a better tasting tofu or a more robust pigfeed, the invention centers on the improved ability to plant, grow, WEED, and propagate more seed. It is this particular use that is in fact implicated in the very first sale by Monsanto.

I have been carefully reading the Amicus briefs and plenty of intensive legal thought is being expounded as to why simple exhaustion theory should not prevail. It is interesting reading, but the cleanest and purest position (and one that would make Occam smile with joy) makes all that very convoluted legal juggling seem like chaff.

Will the Supreme Court see the simple path as well?

I am...

[Skeptical]

Dear Ummm,

With all due respect, you are jumping into the weeds.

Check again the conditions on the fruits of the first sale - per contract - in this case. You hint at it ("Monsanto put significant contractual limitations in place concerning the downstream use of the seeds") but you quite miss what this means, and in fact miss that Monsanto, the drafters of the contract allowed full and unrestricted downstream sales - the third sale in the fact pattern as I have provided.

Your supposition is not supported.

Further, there are two additional complications to your thoughts centering on the power to contract and the patent right.
1) You cannot contract away from exhaustion - and you still have not addressed the fact that the reason for the first sale is directly tied to the gist of the invention, and that normal exhaustion doctrine is in play, and
2) if you grant that Monsanto is attempting an elaborate work around from this normal part of law an argument can be made that Monsanto is forfeiting its patent rights akin to illegal monopoly activity and outright patent misuse.

So you have three possible strikes here.
1) my simplified view
2) you cannot contract away from the legal doctrine of exhaustion, and
3) patent rights nullified because of patent misuse.

Is there any chance we will be able to keep this simple and focus on the fundamental issue of law? I am...

[Skeptical]

Further, Ummm,

Your logic self-destructs, since "If Bowman had re-sold the first-generation seeds - the ones he bought from Monsanto - then the exhaustion doctrine would be applicable" is in fact NOT true given the rest of the logic that follows.

You would be saying that the farmer that Bowman sold his seeds to would be able to do anything he wanted, presumably including using the seeds for the very purpose that Monsanto sold them for - that is, growing - and would be completely in the clear because THEN exhaustion would apply.

But this negates the actual position of Monsanto (and a large number of the briefs) in that the growing itself is the infringement - and importantly, this would be so regardless if Bowman sold them to another farmer or not.

The logical outcome of this is that there is NO exhaustion at all, or that exhaustion is artificially constrained only to the first growing season, with patent rights magically reappearing in the second generation of crops, even though the very purpose - the essence of the use - for which the original seeds were sold was to grow more seeds. I say artificial because the invention itself is NOT limited to one generation, but the intended use is being attempted to be limited to one generation. It should be absolutely clear that the exhaustion doctrine principle of FULL USE is being attempted to be abrogated - based solely on what would be a convenient business model for the Giant involved.

This line of thought eviscerates Univis Lens and ignores the critical tie to the very invention itself that is the subject of the original sale. If that invention was NOT tied to the propagation factor, the second generation would be free and clear of any of this attempted recapture of patent rights. But it is Monsanto that tied the invention thusly, it is Monsanto that then must be content with selling that invention at what it sets the price at and it is Monsanto that must be tied to that first sale in its attempt to profit from its invention. That is the essence of the exhaustion doctrine.

The great circle (of patent life) comes fully around: the reason the invention is sold in the first place is to use the seeds to grow more seeds. If you attempt to obfuscate this necessary fact, you are lost in the weeds.

[Skeptical]

If I may indulge in a little pile-on with this particular advice to the Court...

“Amicus curiae addresses the following question only:

Whether the first-sale doctrine grants the purchaser of a patented article the right to make, use, and sell an unlimited number of new copies of the patented invention that have never been sold.”

THIS – begs the question.

Begging the question (Latin petitio principii, "assuming the initial point") is a type of informal fallacy in which an implicit premise would directly entail the conclusion.

The implicit premise is that the “new copies” have never been sold.

The reason this is begging the question is that this assumes that the “new copies” are legally distinct from the original copy that was sold.

The facts of this case indicate otherwise.

Amongst many reasons, I find this brief especially unpersuasive
- The brief starts too late – at the third sale listed above, and never addresses the actual first sale (nor the second sale), and never addresses the actual critical issue: the full use of the invention.
- Repair/reconstruction is a red herring.
- The entire section II is simply not on point – the legal point – being addressed by the court, and thus is simply waste. Neither the Court, nor the different question presented by amicus curiae have anything to do with combatting a “this is bad” philosophical battle.
- The opening paragraph betrays the impetus of protecting the Giant’s business model. This is not a proper legal point under consideration. And the brief simply goes downhill from there, misconstruing its basic premise of why exhaustion doctrine even exists (for whose benefit).

When advocacy is this transparent as to be so non-objective, it detracts from, rather than helps guide to, a just and equitable understanding and application of the law.

If I were on the bench, and this was meant to persuade me, I would be...