Friday, May 17, 2013

Bowman v. Monsanto: The US Supreme Court Rules on Patent Exhaustion

Three days ago, the United States Supreme Court delivered the much awaited judgment in Bowman v. Monsanto Co. The court held that the patent-exhaustion doctrine which limits the extent to which patent holders can control an individual article of a patented product after an authorized sale, does not extend to permitting a farmer to reproduce seeds protected by a patent, without the patentee’s permission.

The Supreme Court, upholding the decision of the Federal Circuit, ruled in favour of Monsanto by rejecting Bowman’s argument that the exhaustion doctrine and the “self-replicating” nature of seeds makes such reproduction through planting and harvesting legal.

Limiting its scope, the court held that the doctrine only restricts the patentee’s rights with respect to the “particular article sold” and does not affect the patentee’s right to prevent a buyer from making new copies of the patented seeds. This reasoning effectively nullifies the fact that Bowman’s initial purchase of the patented seeds from a grain elevator was an authorised one, making Bowman guilty of infringement for having engaged in the practice of planting, watering and harvesting the Roundup Ready seeds.

If the court were to hold otherwise, it would only be going against its own judgment in the J. E. M. Ag Supply Inc. v Pioneer Hi-Bred Int’l Inc. case. In this case, the court looked at the Plant Variety Protection Act together with the Patents Act and held that the two statutes establish different but non-conflicting schemes and since the requirements under the latter are more stringent, protections under it are bound to be greater.  

In my opinion, the judgment upholds the true spirit of the doctrine as in this situation, the patentee has received a reward only for the particular article sold and not for its subsequent recreations. If a farmer is indeed allowed to buy seeds and replicate them in his farm, it would lead to what in the court’s view is “a mismatch between invention and reward”.  Through this interpretation of the first sale doctrine, one the one hand, farmers benefit through the consumption of the product by planting and harvesting the seed while on the other, the patentee benefits by solely holding the right of reproduction, through which his innovation stands to be rewarded.

Drawing a parallel with the first sale doctrine in the case of books as recently decided by the US Supreme Court and discussed here, the first sale doctrine only allows you to sell the books that have already been published and sold. It does not allow you to make copies of the book and sell them, which if done would be a clear case of infringement.

The court’s act of balancing invention and reward is a welcome one which perhaps ought to be done more frequently by Indian courts as well and not just in patent cases. The same needs to be examined in any case involving intellectual property. When the balance tilts excessively in favour of either, the option is to either increase the amount of protection given or contain abuse of monopoly. In this sense, too, I feel the judgment is a welcome one.

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