Reaping What the Clever Farmer Sows: Self-Replicating Products, Patent Infringement, and the Hitchhiking Kernel
Recently, the U.S. Court of Appeals for the Federal Circuit reaffirmed its previous rulings that the raising and sale of subsequent generations of genetically modified organisms is not affected by patent exhaustion. In Monsanto v. Bowman, an appeal from the Southern District of Indiana, the court affirmed the lower court’s finding that a farmer was liable for patent infringement for planting GMO seed.
What distinguished the actions of the farmer, Bowman, from the actions of a farmer in an earlier case of Monsanto v. McFarling, is that Bowman’s use of the GMO seed was not covered by Monsanto’s standard technology license. Bowman bought his seeds from a local grain silo, mixed in with non-GMO seeds. In other words, the seeds were free of economic restriction. While planters of first generation GMO seed are restricted from keeping the seed for replanting, they are able to sell the seeds as a commodity to local grain dealers. Bowman used pesticides on the mixed seeds, determining that some had a GMO trait of herbicide resistance, and subsequently replanted these resistant seeds.
Bowman argued to the Federal Circuit that Monsanto’s patent monopoly on its GMO seeds ended with the non-restricted sale to the granary. On its face, this is a plausible argument: no person would expect a GMO producer to have a say in how the patented seed is used after such an unconditional sale. However, the fact that GMO’s are self-replicating, undermines Bowman’s argument. While Monsanto would not be able to control the use of the crops after they are on the free market, it does not grant a subsequent user of the crops from “making” a patented article. Subsequent generations of GMOs have the same patented trait, thus enabling a grower to “make” the patented article by planting them. An analogy of three-dimensional printers offers insight into the court’s ruling that planting of free market GMO seeds did not absolve the farmer of liability. Imagine a company with a utility patent on a 3-D printer, the printer fully capable of replicating each part used in the original printer. A purchaser of the 3-D printer could not start printing out, assembling, and selling cloned copies of the original printer. Even though the patentee of the 3-D printer cannot dictate the use of the 3-D printer after an unconditional sale, the patentee still has the sole right to prevent others from “making and selling” its patented printer.
From a public policy standpoint, this is the only outcome consistent with a limited monopoly for disclosing a patented article. Should a subsequent purchaser of a self-replicating item be entitled to replicate the item at will, the market would be destroyed for the original creator. This flooding of the markets with replicas would turn investors away from investing in the original self-replicating item—a disincentive to future research and development in the field. Allowing Bowman to get away without liability would have enabled him to get the increased benefit of the patented seed, by paying the lower price of commodity seed.
I must admit that I became aware of this Bowman on anti-GMO websites, and while I am for their cause to stop the proliferation of these organisms from the environment, the effect of the case is overstated. Simply put, the monopoly for the patent only lasts 20 years, after which society is free to replant GMO seed as it pleases, or not use it at all. Patent rights always raise transactional costs during the period of the patentee’s monopoly, yet this is the bargain that society has made with the inventor. The age-old practice of farmers saving seed for subsequent replanting still holds true for unpatented strains and varieties.
The real issue with GMOs moving forward (Bowman was decided in a scant 15-page opinion) is who should bear the liability for unwanted contamination. Most precedent concerning GMOs deals with farmers attempting to benefit from the organism without paying Monsanto’s asking price. However, the same principle that allows Monsanto the right to sue subsequent planters of its patented seeds also seems to make Monsanto liable for unwanted spread of its GMOs. Monsanto, by having a property ownership right in all subsequent generations of its patented GMOs, would have to take the adverse responsibilities of property ownership. They could be liable for nuisance and trespass claims by countless organic farmers. This is the natural result from allowing patents on self-replicating objects. Would a court allow Monsanto to claim GMOs when asserting a patent infringement claim, yet deny responsibility for GMOs proliferating in the environment? Another analogy may be appropriate. If a purchaser of a Toyota car continually parks on her neighbor’s lot, the purchaser of the car is liable for trespass, not Toyota. However, if Toyota creates a runaway car that drives itself, randomly, onto others’ lots, can it not be said that Toyota is knowingly distributing a product that will inevitably trespass? Patent ownership of GMOs might be viewed in a strict liability sense, as it would be impossible to know from which farm contaminating seeds originated, so only the GMO patentee would be able to bear the burden of liability. Costs of unwanted contamination would best be borne by the patentee and reflected in the price of its GMO product.
Of note is the recent case of Organic Seed Growers and Trade Association v. Monsanto Co. , where OSGTA is seeking a declaratory judgment from the court that organic farmers will not be liable for contamination of their fields by GMOs. Although OSGTA’s attempt to have the patents invalidated for lack of utility, due to documented harmful effects documented in nature, is a moral argument, previously rejected in Diamond v. Chakrabarty.
1. 2011 U.S. App. LEXIS 19303 (Fed. Cir. Sept. 21, 2011).
2. 302 F.3d 1291 (Fed. Cir. 2002).
3. Plaintiffs’ Complaint online at http://www.pubpat.org/assets/files/seed/OSGATA-v-Monsanto-Complaint.pdf
4. 447 U.S. 303 (1980).