What is in this article?:
- Legal issues will shape the future of American agriculture.
- Here are the most significant agricultural law and taxation developments of 2013.
5. Legal issues surrounding patented seeds. The Plant Variety Protection Act of 1970 (PVPA) grants “copyright-like” protection to developers of novel varieties of sexually reproducible plants. In a 2013 decision, a federal district court held that infringement under Section 2541(a)(3) of the PVPA could be proven via sexual multiplication. The plaintiffs in the case argued that the defendants’ contracting with farmers to grow the peanuts at issue in the case and receiving a crop from farmers constituted sexual multiplication that violated the PVPA based on a 1995 U.S. Supreme Court opinion. But, the court disagreed, and noted that the defendants did not plant and harvest seeds themselves, but contracted the process of sexually multiplying the seeds. Such conduct was not a “step in marketing” as required for patent infringement. Under the facts of the case, the defendants did not sell or intend to sell seeds and did not propagate a new crop in violation of Section 2541(a)(5) of the PVPA. Florida Foundation Seed Producers, Inc. v. Georgia Farms Services, LLC, et al., No. 1:10-CV-125 (WLS), 2013 U.S. Dist. LEXIS 136963 (M.D. Ga. Sept. 25, 2013).
While the PVPA, as enacted, protected sexually reproducible plants, the U.S. Supreme Court held in 1980 that living things such as genetically engineered microorganisms could be patented under general patent law so long as they satisfied the statutory criteria. The Court's language was sufficiently broad to suggest that even plants that could be protected under the PPA or the PVPA could be the object of a general utility patent. Indeed, in 2001, the Court specifically held that newly developed plant breeds fall within the terms and scope of general utility patent law, and that neither the Plant Patent Act nor the PVPA limits the scope of coverage of the general utility patent law. The Court noted that the Congress has not given any indication of narrowing the scope of the general utility patent law’s application to plants since the U.S. Supreme Court’s 1980 decision. The Court also held that something that can be protected under the PVPA may also qualify for patent protection as a utility patent under the general patent laws. Accordingly, with the development of techniques for genetic engineering, many other new varieties of agricultural plants may be patented rather than being protected by the PVPA. A patent would essentially give the developers an exclusive monopoly over their varieties for a period of 20 years without the problem of the “farmer exemption.”
Even though general patent protection is possible, the strict requirements of the patent law must be satisfied. Thus, an item must be shown to be “novel,” “nonobvious,” and must be shown to have “utility” to society. However, even if a patent is granted, the patent only allows the holder to exclude others from making, selling or using the invention. In addition, patented seed that has been lawfully purchased can be resold before planting without violating the PVPA. Similarly, where the patented variety is planted and then harvested, the offspring of the patented variety could certainly be sold as a crop without violating the statute.
The U.S. Supreme Court decided another high stakes seed patent case in 2013. In the case, the defendant purchased Roundup Ready soybeans and executed Monsanto’s technology agreement. The defendant also purchased commodity soybean seed from a local grain elevator for late season planting or “second-crop” planting with the purpose of avoiding the higher price for Roundup Ready seed and with the knowledge that the commercial seed had a high probability of containing the Roundup Ready trait. The basic legal question that the Court faced was whether Monsanto could control what users do with the patented seeds. Can a farmer who buys patented Roundup Ready seed use newly grown seed for subsequent plantings? Of course, Monsanto didn’t think so, instead wanting farmers to buy seeds from them every year. At its core, the case involved the patent exhaustion doctrine which holds that a patent holder’s rights in a patented object are essentially exhausted when the object is sold. Thus a buyer could use or resell the purchased “copy” of the patented object. The Court held that the patent exhaustion doctrine was only applicable to the item sold and that the buyer can’t make “copies” of the patented item. Planting and harvesting commercial seed constituted “copying” of patented technology, according to the Court. The Court reasoned that establishing a “per se” rule exhausting all patent claims on first sale would not foster the development and sale of patented products and would erode the incentive that patent law provides to develop new technology and products. The patent at issue was protected as a general utility patent rather than under the Plant Patent Act or the Plant Variety Protection Act. The Court rejected the plaintiff’s argument that he didn’t copy the seeds because it was the seeds themselves that reproduced (i.e., copied themselves). So, the patented seeds that are purchased can be planted, but a farmer cannot plant newly grown seeds from the initially purchased seeds for future growing seasons. Bowman v. Monsanto Co., et al., 133 S. Ct. 1761 (2013), aff’g., sub nom., Monsanto Company and Monsanto Technology, LLC v. Bowman, 657 F.3d 1341 (Fed. Cir. 2011).