Bowman v. Monsanto: Intersection of the Exhaustion Doctrine and Effective Protection for Reinvented Articles

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

On February 19, 2013, the U.S. Supreme Court heard oral argument in Bowman v. Monsanto – a case that pits the emotional pull of seed-saving vs. the potential to undercut innovation if farmers may save/buy/sell GM seed.

Vernon Hugh Bowman is a farmer who entered into an ongoing technology agreement for access to genetically modified soybeans known as Roundup Ready® soybeans and also used the soybeans without permission for his 2nd season planting dating back to 1999.  Both Monsanto and the U.S. Government have confirmed that this case does not affect any farmers who find GM seeds accidentally growing in their fields, which appears to be unlikely, at least in the case of soybeans.

While Bowman v. Monsanto has been  framed as a ‘David and Goliath’ dispute between a lone-wolf farmer and a global biotech company, the Court cut to the chase with Chief Justice Roberts asking Petitioner’s counsel at the outset:

“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?”

Anti-GM activists had high hopes for the Bowman case, perhaps assuming that after losing at the District Court and Appellate levels, the U.S. Supreme Court granted certiorari to the Petitioner in order to take on broader issues of GM seed patentability.  In the event, the Justices instead signaled strong interest in the intersection of the Exhaustion Doctrine and technologies like Roundup Ready® soybeans that reproduce perfectly across generations.   As  summed up by Justice Ginsburg:

[T]he Exhaustion Doctrine was shaped with the idea of an article; there was an article that you could use and  then you use it and its used up.  But we haven’t applied the Exhaustion Doctrine when you have a new — when you create a copy of the original.  So it’s — it’s not that we have law in place.  We’ve been dealing with an item with the Exhaustion Doctrine and now we have hundreds of items, thousands of items, all growing from that original seed.

The U.S. Government and counsel for Monsanto cited Microsoft v. AT&T (2007),  noting commonalities between digital replication of software and biotechnologies that may reproduce desirable genetic traits through successive generations.  In response to a question from Chief Justice Roberts, Bowman’s counsel pointed out that the Court had found in favor of Microsoft, finding no infringement of AT&T patents due to extraterritorially.

Now with passage of time, though, the Court’s majority may find more sympathy with Justice Steven’s dissent in Microsoft, concluding that the Golden master disk represents both the core software component and the “functional equivalent to a warehouse of components,”  – perfect digital copies of the original to be reproduced ad infinitum and without payment of royalties to the patent holder.

Disclosure:  Through through the non-profit NGO BayhDole25, I submitted amicus briefs to the U.S. Supreme Court in both Bowman v. Monsanto and Microsoft v. AT&T (2007)  supporting the patent holder in both cases.  The BayhDole25 brief in Bowman v. Monsanto may be downloaded here,  the BayhDole25 brief in Microsoft v. AT&T (2007) may be downloaded here.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, s and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

Biotech in Countries Starting with “I”

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

We are so accustomed to the way things are.  Commercial biotechnology arguably started in the United States, in Boston, San Francisco and beyond.  We like to think that  our technological leadership holds fundamental lessons for biotech worldwide, with translational research spun out of universities, supported by Angel Investors, VCs and/or academic/industry research collaborations.

After all, that is the way things are.  (Or so we thought, before we learned that last year first-time funding by VCs for young companies fell 41% to the lowest level since 1995.)

In any case, it can be disorienting to learn just how fundamentally different the path to commercial biotechnology can be for companies outside the United States, for example in Israel.

The U.S. tech transfer system and patentability for GM inventions date back only to the Carter Administration, some 200 years after the founding of the United States. Over 30 years after Diamond v. Chakrabarty (1980), we have still not reached a national consensus on our policies central to the continuing success of commercial biotechnology, including patents for gene-based inventions.

Bowman v. Monsanto and the Myriad case now pending in the U.S. Supreme Court are great examples of the unpredictability of American jurisprudence around  tech transfer and commercial biotechnology, for good or for ill.

In contrast, Israeli policies around the patentability of innovative research and tech transfer preceded the founding of the State, owing to the science leadership of Dr. Chaim Weizmann, a world renowned chemist.

Before becoming the first President of Israel in 1948, Weizmann was President of  then-Palestine’s leading research institute. The Weizmann Institute of Science that now bears his name has since pioneered translational research across a range of science disciplines from cancer cancer research, electronics, nuclear physics, neurology, nanotechnology and solar energy research, among others.

Israeli life sciences has had its own unique challenges – Israel has yet to implement promised data exclusivity reforms, and I have called out Israel’s past intellectual property policies as anti-innovation.  Nonetheless, innovative biotechnology is embedded in Israel’s DNA and is increasingly important to continuing success of the Start-up Nation.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, s and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.