Monsanto Patent Win Is Important for New Technology

Monsanto Patent Win Is Important for New Technology

A recent David versus Goliath court battle was settled early last month — in the giant’s favor. In a rare unanimous decision, the U.S. Supreme Court said that agribusiness giant Monsanto could stop a farmer from using patented genetically modified seeds.

Many consumers who have opposed genetically modified, or GM, foods were outraged at the decision. Those in business or studying for a business degree online or in a traditional setting should think otherwise. The decision in Bowman vs. Monsanto is important because it recognizes a growing direction in various types of technology: self-replicating products.

To understand the case and its importance, here are the basics. Monsanto is a big purveyor of a popular herbicide — a weed killer, among other things — called Roundup. By genetically modifying particular crops, including soybeans, Monsanto made certain crops immune to the herbicide. Farmers could plant seeds and then use Roundup to kill weeds without worrying about the effect on the crops they wanted to grow, saving time and increasing efficiency.

Indiana farmer Vernon Brown was a regular user of Roundup and so-called Roundup Ready soybean seeds. For years, he would purchase the seed at the beginning of his planting season for his first crop, signing the mandatory Monsanto licensing, agreeing not to save seeds for subsequent planning, a very old agricultural practice.

However, for later plantings in a given season, he would purchase seed, meant as human or animal food, from the local grain elevator. A grain elevator is a company that buys and stores crops from nearby farmers to later sell them to its customers. Brown knew that Roundup Ready seeds were popular in his area and that purchasing grain, but using it to plant, not eat, would likely mean much of the seeds would have come from Roundup Ready plants. In other words, he was trying to stick to the letter of the Monsanto agreement while effectively circumventing it.

Lower courts had agreed with Monsanto, as did the Supreme Court. The reason was a practical implication of patent law when applied to products, such as seeds, nanotechnology, or software, which either can now or will be able to replicate them soon.

Here is how the court explained it:

Under the doctrine of patent exhaustion, 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. … [I]f simple copying was a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction.

The choices were to say that patents did not apply to self-replicating technologies, or that a farmer like Brown could be restricted from reusing seeds.

The court said that the ruling was not intended to set broad precedents. However, there will clearly continue to be issues of how companies will protect their work as technologies advance faster than the law can keep pace.

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