Who Gives a Bean about Patent Exhaustion?

In a rare unanimous decision, the United States Supreme Court held that the patent exhaustion doctrine, while viable, does not allow a famer to use genetically modified soybeans to make new seeds to reuse in later planting seasons. The decision, issued on May 13, 2013, in Bowman v. Monsanto, 569 U.S.____, No. 11-796, 2013 U.S. LEXIS 3519 (U.S. May 13, 2013), while specifically limited to the facts of the case, is significant in that it illustrates the Supreme Courts willingness to extend patent protection to later generations of self-reproducing biological inventions in the biotechnology industry. In Bowman, Monsanto marketed patent protected soybean seeds that had been genetically altered to resist certain herbicides. Bowman purchased, planted and harvested these seeds, keeping and replanting some of the beans seeds for a later crop. Bowman argued that because he purchased the seeds, the patent exhaustion doctrine allowed him to reuse the additional seeds from the original plants to grow new ones which still exhibited their genetically altered condition. Monsanto claimed that Bowman was making infringing seeds in violation of the companys patent. While the Court expressly recognized the patent exhaustion doctrine, it refused to apply it to the facts of the case concluding: the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention. In reaching this holding, the Court also expressly rejected the blame the bean defense; Bowman had argued that he did not make the copies, the plants didan argument the Court made short shrift of pointing out that it was Bowman that purchased the seeds, planted them, harvested them and then replanted them. Significantly, in delivering the opinion, Justice Kagan left the door open for a different application of the patent exhaustion doctrine for different technology. She expressly noted that in a case with different facts, the self-replication of the article could be outside of the purchasers control or may be a necessary but incidental step in using the item for another purpose. Only time will tell if the Courts caveat will amount to more than a hill of beans and extend the patent exhaustion doctrine to other biotech areas and related technologies.

Stephen E. Noona is the head of Kaufman & Canoles Trial Section and Co-chair of its Intellectual Property Law and Franchising Practice Group. He has been counsel in over ninety (90) patent cases in the Eastern District, is Fellow in the American College of Trial Lawyers and has appeared before the judges in all four Divisions of the Eastern District on patent and intellectual property matters.

Stephen E. Noona