There is a very important issue pending before the Supreme Court. It deals specifically with what most of us would think is an obscure issue, yet if the Court rules “the wrong way,” our food security, the fate of the agricultural seed industry, and the future of the biotechnology industry may all be in jeopardy. And who knows, it may even cause a re-look at software piracy.
Here’s the big question: As a patent owner, do you have the ability to prevent others from making your patented invention? Now, you’d think this is a pretty obvious “yes.” After all, that is what the patent system is for: to give you the right to prohibit others from “making, using and selling.”
But the answer to this question also involves another very important issue: Does the purchaser of a patented invention have the right to re-sell it, with no payment back to the patent holder? For example, if you buy a laptop computer, which is composed of dozens if not hundreds of patented inventions, do you have the right to re-sell it? The answer, of course, is yes. And this is the way it should be. That is because the patent holder, say the owner of a patent on certain “chip” in your laptop, made its profit when it sold that chip to the laptop manufacturer. This makes sense. When the laptop manufacturer subsequently sells the computer to you, it isn’t required to give the owner of the chip patent any of the money you pay for your new laptop because the patent holder has already made its money—once. The idea is that the owner of a patent cannot extend the “reach” of that patent beyond the first sale, and at that point, the patent holder’s rights are said to be “exhausted”.
This concept is known, logically enough, as “patent exhaustion.”
However, in the example above, no one will have the right to make MORE chips without the patent holder’s permission.
The same idea holds with copyrights. If you buy sheet music or a CD, you can re-sell it without owing any money to the author (or whoever owns the copyright). All is good—we live in a rational universe and this makes sense. On the other hand, we all know that if you buy a CD, that doesn’t give you the right to copy it. And buying sheet music doesn’t give you the right to reprint it. That is “piracy.” The copyright owner is the only one who can reproduce the copyrighted material or grant permission for others to do so.
Same with patented inventions. The patent owner has the right to prevent everybody else on either from manufacturing his invention.
Now to the case in point. If you are the owner of a patented gene that you have inserted into the DNA of a plant, you have the right to sell seed from that plant to other people for any purpose. And if a farmer plants that seed and it makes new seeds containing your patented gene, he can sell those seeds (as grain for food) to make money on his soybean, or corn, or rice, or whatever crop has the patented gene. The grain then enters the food chain and is bought and sold throughout the world without payment back to you as the original owner of that gene. This, of course, is the way many companies such as Monsanto, DuPont, Syngenta, and Bayer, to name just a few, profit from their research and inventive activity: they sell genetically-modified seeds to growers for planting. But they don’t get any additional money when the resulting crops are eventually sold (and resold) for consumption by animals or humans. This all makes sense, of course.
Is that like being able to re-sell the laptop containing a patented chip? Sure it is. You have the right to re-sell used laptops on eBay even if they contain chips patented by somebody else, and you will owe no money back to the original patent owner. And likewise, the farmer has the right to sell patented seeds as food, and everyone from commodity brokers to the local Co-op has the right to resell those seeds for the same purpose. But does the farmer who buys patented seed have the right to plant those seeds, collect new seeds from the resulting crops, and then sell those seeds to somebody else for planting? That would make NO sense. We already know that you can’t copy a company’s computer chip, and planting seeds is actually like making an exact replica of the original. I think you’d all agree with that . . . .
And so, up until now, courts have ruled that a patent owner can prevent farmers from collecting “excess” seeds they have produced and then re-planting or selling them to other people for planting. Farmers are permitted, of course, to sell seed (grain) for animal feed, human consumption, etc. because in that case the seed will eventually be eaten, not planted. In other words, when patented seed is consumed, it is not being used as a “factory” to make more seeds, which would infringe the patent owner’s exclusive right to keep others from manufacturing his patented invention.
The Bowman v. Monsanto case before the Supreme Court involves an Indiana farmer who bought Monsanto’s RoundUp Ready soybeans, which contain a gene that makes the crops grown from these seeds resistant to Monsanto’s RoundUp herbicide. Fine so far. Farmer Bowman then harvested these seeds and sold them to a grain elevator in the usual way. Still fine, because seeds sold to grain elevators are for consumption. Then he bought seeds from the elevator because he could get them at a much lower price than he would have paid for RoundUp Ready seeds if he bought them directly from Monsanto. Since more than 95% of all soybean seeds planted in the United States are RoundUp Ready, he was pretty certain that he would get largely RoundUp Ready soybeans. The farmer was still okay at this point. But then he planted those seeds, SPRAYED them with RoundUp (thus selecting, or “enriching” his yield of the patented seeds), harvested the excess seeds, and replanted them, thus avoiding the cost of buying new seeds from Monsanto. He did this for 8 years. This last bit was not okay. Monsanto sued him in federal court and won an $87,000 judgment. Seems logical to me.
Now, this was a pretty cute move by farmer Bowman. Hey, what a great way to get your very own supply of high-technology seeds—essentially for free! So when he was finally caught, the U.S. District Court found him guilty of patent infringement. Good call. The U.S. Court of Appeals upheld the decision of the lower court, and now the case has found its way to the Supreme Court as Bowman v. Monsanto (Case # 11-796). Oral arguments were heard this month (February, 2013) and a decision is expected by June.
Bowman is using as a defense the concept of “patent exhaustion,” described above. His position is that once he purchases Monsanto’s patented seed, he can do whatever he wants with it. In this case, plant and re-plant it forever—and avoid paying seed costs.
Now, this issue also raises the concept of “farmers rights.” You are going to have to bear with me here, but basically many farmers in the United States generally side with Bowman because of the Plant Variety Protection Act (PVPA). The PVPA provides an alternative form of intellectual property protection that is available to developers of new seed-bearing plant varieties. Thus a plant breeder can obtain a Plant Variety Certificate (PVC) under the PVPA on a new soybean variety that provides patent-like protection for 20 years. And under the PVPA, there is an “exception” that allows farmers to use PVC-protected seed for their own seed planting needs. This is known as the “farmers exemption.”
So in other words, if Monsanto had protected its RoundUp Ready soybeans ONLY with a Plant Variety Certificate, then Bowman would have been within his rights to save seed for replanting. But Monsanto did NOT use the PVC form of protection; it used the patent system, which is a “tougher” form of protection that does NOT have a farmers exemption.
Not, that is, unless you are trying, like Bowman, to argue that a farmer’s exemption should exist for patented varieties through the concept of “patent exhaustion.”
Whew. I hope you’re still with me.
So, to repeat myself, the decision in this case by the Supreme Court will be extremely important. A decision in Bowman’s favor would have the unwanted effects of:
(1) substantially reducing the protection offered by patents on OTHER types of inventions (besides plants) that rely on self-replication—basically anything that has the ability to “remake” itself, including genetically modified materials such as cell lines, bacteria, and viruses (as well as the products of a NEW industry that is only now developing in the area of “synthetic biology”, the topic of another blog someday!), and
(2) totally eviscerating the seed industry by taking away any incentive for companies to invent new varieties of plants that reproduce by self-pollination, such as soybeans, peanuts, wheat, rice, and barley. (Note that I have excluded corn, since corn is planted by farmers as hybrid corn; if the farmer re-planted hybrid corn it would degenerate into many different genotypes/varieties.)
For decades, there has been a desire in the United States to limit the ability of companies to make money from their innovations (e.g., plant varieties). Apparently, many people think that if a company makes an invention, that new technology should immediately become available to the public with no restrictions—so essentially you and I should get it for free.
Further, there is a time-honored activity in the United States known as “brown bagging”, which is the practice of harvesting seeds that are protected by Plant Variety Certificates and/or patents, putting the seeds into “brown bags,” and selling them to the neighbors. (While the “farmer’s exemption” permits growers to save PVC-protected seeds for re-planting, it does not permit them to sell those saved seeds to other growers.) This practice still goes on, and in fact new PVC-protected wheat varieties developed at Oklahoma State University are subject to occasional “brown bagging.” As you would expect, when OSU learns of such illegal practices, we come down on them hard. As we should.
You just can’t make copies of protected “materials”—not copyrighted CDs and not patented seeds.
You’re already familiar with software piracy. Now you know about “seed piracy” too. Same idea.
Here’s the big question: As a patent owner, do you have the ability to prevent others from making your patented invention? Now, you’d think this is a pretty obvious “yes.” After all, that is what the patent system is for: to give you the right to prohibit others from “making, using and selling.”
But the answer to this question also involves another very important issue: Does the purchaser of a patented invention have the right to re-sell it, with no payment back to the patent holder? For example, if you buy a laptop computer, which is composed of dozens if not hundreds of patented inventions, do you have the right to re-sell it? The answer, of course, is yes. And this is the way it should be. That is because the patent holder, say the owner of a patent on certain “chip” in your laptop, made its profit when it sold that chip to the laptop manufacturer. This makes sense. When the laptop manufacturer subsequently sells the computer to you, it isn’t required to give the owner of the chip patent any of the money you pay for your new laptop because the patent holder has already made its money—once. The idea is that the owner of a patent cannot extend the “reach” of that patent beyond the first sale, and at that point, the patent holder’s rights are said to be “exhausted”.
This concept is known, logically enough, as “patent exhaustion.”
However, in the example above, no one will have the right to make MORE chips without the patent holder’s permission.
The same idea holds with copyrights. If you buy sheet music or a CD, you can re-sell it without owing any money to the author (or whoever owns the copyright). All is good—we live in a rational universe and this makes sense. On the other hand, we all know that if you buy a CD, that doesn’t give you the right to copy it. And buying sheet music doesn’t give you the right to reprint it. That is “piracy.” The copyright owner is the only one who can reproduce the copyrighted material or grant permission for others to do so.
Same with patented inventions. The patent owner has the right to prevent everybody else on either from manufacturing his invention.
Now to the case in point. If you are the owner of a patented gene that you have inserted into the DNA of a plant, you have the right to sell seed from that plant to other people for any purpose. And if a farmer plants that seed and it makes new seeds containing your patented gene, he can sell those seeds (as grain for food) to make money on his soybean, or corn, or rice, or whatever crop has the patented gene. The grain then enters the food chain and is bought and sold throughout the world without payment back to you as the original owner of that gene. This, of course, is the way many companies such as Monsanto, DuPont, Syngenta, and Bayer, to name just a few, profit from their research and inventive activity: they sell genetically-modified seeds to growers for planting. But they don’t get any additional money when the resulting crops are eventually sold (and resold) for consumption by animals or humans. This all makes sense, of course.
Is that like being able to re-sell the laptop containing a patented chip? Sure it is. You have the right to re-sell used laptops on eBay even if they contain chips patented by somebody else, and you will owe no money back to the original patent owner. And likewise, the farmer has the right to sell patented seeds as food, and everyone from commodity brokers to the local Co-op has the right to resell those seeds for the same purpose. But does the farmer who buys patented seed have the right to plant those seeds, collect new seeds from the resulting crops, and then sell those seeds to somebody else for planting? That would make NO sense. We already know that you can’t copy a company’s computer chip, and planting seeds is actually like making an exact replica of the original. I think you’d all agree with that . . . .
And so, up until now, courts have ruled that a patent owner can prevent farmers from collecting “excess” seeds they have produced and then re-planting or selling them to other people for planting. Farmers are permitted, of course, to sell seed (grain) for animal feed, human consumption, etc. because in that case the seed will eventually be eaten, not planted. In other words, when patented seed is consumed, it is not being used as a “factory” to make more seeds, which would infringe the patent owner’s exclusive right to keep others from manufacturing his patented invention.
The Bowman v. Monsanto case before the Supreme Court involves an Indiana farmer who bought Monsanto’s RoundUp Ready soybeans, which contain a gene that makes the crops grown from these seeds resistant to Monsanto’s RoundUp herbicide. Fine so far. Farmer Bowman then harvested these seeds and sold them to a grain elevator in the usual way. Still fine, because seeds sold to grain elevators are for consumption. Then he bought seeds from the elevator because he could get them at a much lower price than he would have paid for RoundUp Ready seeds if he bought them directly from Monsanto. Since more than 95% of all soybean seeds planted in the United States are RoundUp Ready, he was pretty certain that he would get largely RoundUp Ready soybeans. The farmer was still okay at this point. But then he planted those seeds, SPRAYED them with RoundUp (thus selecting, or “enriching” his yield of the patented seeds), harvested the excess seeds, and replanted them, thus avoiding the cost of buying new seeds from Monsanto. He did this for 8 years. This last bit was not okay. Monsanto sued him in federal court and won an $87,000 judgment. Seems logical to me.
Now, this was a pretty cute move by farmer Bowman. Hey, what a great way to get your very own supply of high-technology seeds—essentially for free! So when he was finally caught, the U.S. District Court found him guilty of patent infringement. Good call. The U.S. Court of Appeals upheld the decision of the lower court, and now the case has found its way to the Supreme Court as Bowman v. Monsanto (Case # 11-796). Oral arguments were heard this month (February, 2013) and a decision is expected by June.
Bowman is using as a defense the concept of “patent exhaustion,” described above. His position is that once he purchases Monsanto’s patented seed, he can do whatever he wants with it. In this case, plant and re-plant it forever—and avoid paying seed costs.
Now, this issue also raises the concept of “farmers rights.” You are going to have to bear with me here, but basically many farmers in the United States generally side with Bowman because of the Plant Variety Protection Act (PVPA). The PVPA provides an alternative form of intellectual property protection that is available to developers of new seed-bearing plant varieties. Thus a plant breeder can obtain a Plant Variety Certificate (PVC) under the PVPA on a new soybean variety that provides patent-like protection for 20 years. And under the PVPA, there is an “exception” that allows farmers to use PVC-protected seed for their own seed planting needs. This is known as the “farmers exemption.”
So in other words, if Monsanto had protected its RoundUp Ready soybeans ONLY with a Plant Variety Certificate, then Bowman would have been within his rights to save seed for replanting. But Monsanto did NOT use the PVC form of protection; it used the patent system, which is a “tougher” form of protection that does NOT have a farmers exemption.
Not, that is, unless you are trying, like Bowman, to argue that a farmer’s exemption should exist for patented varieties through the concept of “patent exhaustion.”
Whew. I hope you’re still with me.
So, to repeat myself, the decision in this case by the Supreme Court will be extremely important. A decision in Bowman’s favor would have the unwanted effects of:
(1) substantially reducing the protection offered by patents on OTHER types of inventions (besides plants) that rely on self-replication—basically anything that has the ability to “remake” itself, including genetically modified materials such as cell lines, bacteria, and viruses (as well as the products of a NEW industry that is only now developing in the area of “synthetic biology”, the topic of another blog someday!), and
(2) totally eviscerating the seed industry by taking away any incentive for companies to invent new varieties of plants that reproduce by self-pollination, such as soybeans, peanuts, wheat, rice, and barley. (Note that I have excluded corn, since corn is planted by farmers as hybrid corn; if the farmer re-planted hybrid corn it would degenerate into many different genotypes/varieties.)
For decades, there has been a desire in the United States to limit the ability of companies to make money from their innovations (e.g., plant varieties). Apparently, many people think that if a company makes an invention, that new technology should immediately become available to the public with no restrictions—so essentially you and I should get it for free.
Further, there is a time-honored activity in the United States known as “brown bagging”, which is the practice of harvesting seeds that are protected by Plant Variety Certificates and/or patents, putting the seeds into “brown bags,” and selling them to the neighbors. (While the “farmer’s exemption” permits growers to save PVC-protected seeds for re-planting, it does not permit them to sell those saved seeds to other growers.) This practice still goes on, and in fact new PVC-protected wheat varieties developed at Oklahoma State University are subject to occasional “brown bagging.” As you would expect, when OSU learns of such illegal practices, we come down on them hard. As we should.
You just can’t make copies of protected “materials”—not copyrighted CDs and not patented seeds.
You’re already familiar with software piracy. Now you know about “seed piracy” too. Same idea.
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