Good news for companies patenting self-replicating technology?

While predicting a Supreme Court decision is never a safe bet, the oral argument in Bowman v. Monsanto suggests that the result will be welcome news for companies patenting self-replicating technology (like the biotechnology industry).

On Tuesday, the Supreme Court heard oral argument on Bowman v. Monsanto [http://www.supremecourt.gov/oral_arguments/argument_transcripts/11-796.pdf], which we told you about on February 12. The major implication of the case is that a decision adopting Bowman’s position would radically change the patent protection for self-replicating technology. There are three important background facts to consider in Bowman.

  • First, this case deals with Monsanto’s Roundup® Ready patented soybeans, which are wildly successful and account for 90% of U.S. soybeans.
  • Second, farmers buy each year’s Roundup Ready soybeans seed from Monsanto. Monsanto sells these soybeans (we’ll call this Generation N seed), and allows the farmers to grow another generation of soybeans (we’ll call this Generation N+1 seed). The farmer can sell or use the Generation N+1 seed, but cannot plant Generation N+1 to grow another generation of seed (which we’ll call Generation N+2).
  • Third, the record before the Supreme Court is a bit unclear, but federal law seems to prohibit grain elevators from selling soybeans intended for use as seeds (the grain elevator sells grain, not seeds).

Rather than buying seeds from Monsanto, Bowman bought soybeans from a grain elevator knowing that most of the seeds would be Roundup Ready. When sued for infringement, Bowman argued that Monsanto exhausted its patent rights by selling Generation N seeds.

At oral argument, the Court heard from the parties and from the United States (opposing Bowman’s exhaustion argument) as amicus. The justices seemed to engage with Monsanto’s position. In fact, several justices seemed to be using the argument to decide if the Court should clarify the conditional sale jurisprudence, which is not the primary issue in the case. It would not be surprising to see the Supreme Court hold that the sale of self-replicating technology did not exhaust future generations. Such a result might analogize self-replicating technology to the computer code in Microsoft v. AT&T: the right to use Copy A does not provide a right to make Copy B.