What is in this article?:
- Supreme Court Reviewing Important Ag Biotech Patent Case
- Patents vs. License
The U.S. Supreme Court receives approximately 10,000 petitions per year asking it to review a particular dispute – called a petition for a writ of certiorari or petition for "cert." As the Court cannot possibly hold an oral argument and decide each requested case, it usually selects the most critical 75-80 cases/year, with the term starting in October and running through the following summer. Lawyers anxiously await the Court's decision on which cases it will hear and then speculate as to why it may or may not have accepted "cert" in a particular case and what this may mean for that area of law going forward.
Although agriculture undoubtedly is an important part of our national economy, it is relatively rare when the Court grants cert on a case directly involving agriculture. The Court's docket tends to be congested with issues relating to the grand social challenges of the day, e.g., health care, affirmative action in higher education, freedom of speech, and balancing individuals' privacy rights with the needs of the police, to name a few topics on the Court's agenda for the 2012-2013 term.
The Court's decision to grant cert in Bowman v. Monsanto Co., therefore, has engendered substantial discussion in the agricultural law community regarding the scope of patent rights for agricultural biotechnology. In Diamond v. Chakrabarty, 447 U.S. 303 (1980), the Court affirmed the ability to secure utility patents on "living" things such as microbes. Life science companies quickly realized that many of their novel inventions, such as genetically engineered seeds, could qualify for utility patents. This provided an additional layer of intellectual property protection beyond trade secrets or plant variety protection certificates. In J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred, Inc., 534 U.S. 124 (2001), the Court further affirmed that genetically engineered seeds could qualify simultaneously for both plant variety protection certificates and utility patents. This provided agro-biotech companies an important means to protect their return on research investment by excluding the ability of competitors to appropriate their novel technology and incorporate it in their own seeds.
On the other hand, seed companies were left with a problem of how to prevent entrepreneurial farmers from saving this seed embedded with new (and expensive) technology. The "First Sale Doctrine" of patent law provides that once a patented product is sold, the new owner is free to make use of that product however he/she best sees fit. For example, if I buy a patented chair, I could use it to sit on, or stand of top of it to reach into the top of my kitchen cabinets. And when I am done with the chair, am free to sell it to whomever I want, at any price I want and they are free to do whatever they want with that chair. The owner of the patent, after the "first sale" to me, has extinguished the patent rights in that particular chair. I could not, however, take that patented chair, reverse engineer the patented technology in the chair, and then manufacture and sell my own version. The difference is that the patent rights are exhausted in the specific chair I bought, while the patent laws exclude me from making copies of chairs on my own to sell to others.