IP expert Heald on Bowman v. Monsanto

Tuesday, May 28, 2013

The U.S. Supreme Court sided with the Goliath of the agribusiness world when it ruled May 13 in favor of Monsanto in a case involving a farmer replanting the seeds of genetically modified soybeans.

Paul Heald is the Guy Raymond Jones Faculty Scholar in Law at Illinois and an expert on patent and copyright issues who has published research on the intellectual property aspects of seed varieties. In an interview with News Bureau Business & Law Editor Phil Ciciora, Heald discusses the verdict and what it could ultimately mean for other “self-replicating technologies.”

Does the court's ruling in the case (Bowman v. Monsanto Co.) open the door for other types of agricultural lawsuits?

I don’t think so. The ruling was very narrow on the law itself, and the farmer, Vernon Hugh Bowman, had a very weak case, which was why it was a 9-0 opinion in favor of Monsanto. Everyone pretty much knew that Monsanto was going to win, and it seems like Bowman himself knew that he was exploiting a loophole.

Really, Bowman’s argument about the first sale doctrine was weak. The court is correct in that the first-sale doctrine is about obtaining something legally and then having the right to transfer it to somebody else afterward. So, Bowman could have bought these seeds and sold them to someone else. He also could have given them away for free or burned them. The first-sale doctrine lets you do what you want with what you’ve purchased but it doesn’t let you make more of whatever you originally bought.

How did this case threaten the “incentive for invention” aspect of patent law?

There’s an interesting section in the court’s opinion that’s a policy discussion, and it’s clear that the court is of the opinion that these patents would be essentially worthless if people could take advantage of a self-replicating loophole like Bowman did. The court may be right, but in 1970 Congress passed non-patent protection for seeds under the Plant Variety Protection Act and included a seed-saving provision for farmers. At least at that time, Congress did not think that seed saving would destroy incentives to invent new seeds.

Another interesting aspect of this case that has received very little attention is that the seeds go “off-patent” – meaning this technology falls into the public domain – this October. In other words, Monsanto completely loses its patent on these seeds, which means that anybody in the country would be able to make them – and what Bowman did would be completely legal beginning this fall.

What’s also interesting is, after the seed becomes part of the public domain, will we see competition from generic seed manufacturers? We see that sort of action in the pharmaceuticals industry – as soon as a certain drug goes off-patent, the generic manufacturers jump in as quickly as they can. So there’s an opportunity for real competition here, and it will be interesting to see if and how fast that develops.

Seed companies will sometimes play games to make it appear that you have to buy the patented product when, in fact, the generic version would be just as good. If this were truly a competitive market, there would be generic competitors out there, and there wouldn’t be any negative pricing effects from that game-playing.

But Monsanto is a very aggressive company with a lot of detractors – some have good points, while others are a little hysterical. So it’s always been hard to evaluate the claim that they are able to charge monopoly prices for newly patented seeds that aren’t really better than the old seeds. In an efficient market, that strategy should not work. But it may not be an efficient market, especially if you only have a handful of major players. If the major players completely dominate the seed market, they may be able to get away with it.

This case was ostensibly about soybean seeds, but what implications do you foresee it having for other so-called “self-replicating technologies”?

The broader implications of this case do indeed have to do with self-replicating technologies, and whether or not they should be protectable. But the problem here is that this particular technology is not self-replicating. It does take the interference of man to plant and water seeds. There are, indeed, different types of technologies that are truly self-replicating – strains of bacteria, that sort of thing. Things that will propagate without direct human intervention. But soybean seeds aren’t one of them.

If you were to re-think patent law from scratch, you might come down on the side of Bowman or even on the side of no patent protection at all. But patent law is about interpreting the patent statute, which was passed by Congress. So it’s a question of congressional intent. It seems quite clear that Congress wishes to define “invention” as broadly as possible. In the very first biotech case back in the early 1980s, one that involved petroleum-eating microbes, the Supreme Court suggested that Congress intended that everything made by man under the sun is patentable. Therefore, this microbe, which was made by man, was patentable.

Moreover, if you go back to the Plant Patent Act of 1930, which was the first patent act concerning plants, Congress prevented infringers from taking cuttings from fruit trees or rose bushes or other kinds of plants that grow by cloning.

So if Congress clearly felt in 1930 that it should be illegal for someone to cut a branch off of a living thing and graft it onto another living thing so that it can replicate itself, it seems just as unlikely that Congress has a problem protecting genetically altered seeds. 

What can farmers take away from the ruling?

It should send out a little warning signal to farmers that Monsanto is vigilant about its intellectual property.