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Feb 20, 2013
As the Supreme Court hears oral arguments in the lawsuit against Monsanto brought by Indiana farmer Vernon Bowman in Washington this week, The Wall Street Journal released an editorial detailing the importance of protecting the intellectual property rights of innovators not only in the agriculture industry, but in other industries as well.
Seeds of Innovation Wall Street Journal Editorial February 20, 2013 Small farmers make sympathetic plaintiffs, but in Monsanto v. Bowman argued Tuesday at the Supreme Court they would also make bad law. Indiana farmer Vernon Hugh Bowman bought Monsanto's Roundup Ready seed under a licensing agreement that said he could plant the seeds only once for commercial crops and couldn't recycle them. That didn't appeal to Mr. Bowman, who wanted cheaper soybean seeds. So he bought other seeds from a grain elevator guessing that most would also use Roundup Ready technology, which makes plants resistant to a common weed killer. When Monsanto sued, Mr. Bowman invoked what lawyers call the "doctrine of patent exhaustion" -- that once a patented product is sold, the patent no longer protects the product. He argues that because soybeans are a self-replicating technology, "subsequent generations" are already embodied in each existing soybean and therefore aren't protected by the patent. At Tuesday's oral argument, Chief Justice John Roberts was incredulous. "Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?" he asked. Justice Stephen Breyer noted that Mr. Bowman could do anything with the seeds except grow the next generation of seeds that amount to a new product and directly infringe Monsanto's patent. Monsanto spends $1.5 billion a year on R&D, and it takes over a decade and more than $100 million to bring a product to market. For Roundup Ready, research began in the 1980s and it became a commercial product in 1996. Some 275,000 farmers a year now use it, but the patent expires in 2014. The case has implications beyond agriculture to biotech and any business that depends heavily on patents. That may be precisely why the Justices took the case and would be consistent with their recent interest in sorting out increasingly confused U.S. patent law. The Justices can help in this case by sending a useful message that when it comes to innovation, you reap what you sow.
Seeds of Innovation Wall Street Journal Editorial February 20, 2013
Small farmers make sympathetic plaintiffs, but in Monsanto v. Bowman argued Tuesday at the Supreme Court they would also make bad law.
Indiana farmer Vernon Hugh Bowman bought Monsanto's Roundup Ready seed under a licensing agreement that said he could plant the seeds only once for commercial crops and couldn't recycle them. That didn't appeal to Mr. Bowman, who wanted cheaper soybean seeds. So he bought other seeds from a grain elevator guessing that most would also use Roundup Ready technology, which makes plants resistant to a common weed killer.
When Monsanto sued, Mr. Bowman invoked what lawyers call the "doctrine of patent exhaustion" -- that once a patented product is sold, the patent no longer protects the product. He argues that because soybeans are a self-replicating technology, "subsequent generations" are already embodied in each existing soybean and therefore aren't protected by the patent.
At Tuesday's oral argument, Chief Justice John Roberts was incredulous. "Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?" he asked. Justice Stephen Breyer noted that Mr. Bowman could do anything with the seeds except grow the next generation of seeds that amount to a new product and directly infringe Monsanto's patent.
Monsanto spends $1.5 billion a year on R&D, and it takes over a decade and more than $100 million to bring a product to market. For Roundup Ready, research began in the 1980s and it became a commercial product in 1996. Some 275,000 farmers a year now use it, but the patent expires in 2014.
The case has implications beyond agriculture to biotech and any business that depends heavily on patents. That may be precisely why the Justices took the case and would be consistent with their recent interest in sorting out increasingly confused U.S. patent law. The Justices can help in this case by sending a useful message that when it comes to innovation, you reap what you sow.
