This theory allows a purchaser of a patented good to resell the "used" good without violating patent rights.
The Court unanimously disagreed that patent exhaustion was applicable in Bowman's case, explaining that the patent exhaustion theory applies to later uses of a good but not to the creation of new and additional goods from a patented good.
While Bowman could sell harvested Roundup Ready beans or use them as feed, he could not plant those beans, produce new beans, and sell the new beans without violating Monsanto's patent rights.
"That is how "to ‘make’ a new product," said the Court, or to "reproduce Monsanto’s patented invention" without compensation to Monsanto. "A patentee retains an undiminished right to prohibit others from making the thing his patent protects," said the Court.
Bowman tried to distinguish the application of patent exhaustion to his case based on the "self-replicating" nature of seed, arguing that the seed, rather than Bowman, controlled the seed's actual reproduction.
Monsanto should not be allowed to interfere with natural reproduction, claimed Bowman.
The Court again disagreed, rejecting what it referred to as Bowman's "blame the bean" and "seeds are special" arguments and pointing out that Bowman played an active role in the seed reproduction process.
But the Court carefully noted that its ruling does not automatically apply to every self-replicating product, as there could be situations where a self-replication might occur outside a purchaser’s control or be a necessary but incidental step in using the item for another purpose.
Many expected the Court to rule in favor of Monsanto based solely on the argument that ruling otherwise would negate the incentive for innovation that Congress intended upon passing the federal Patent Act.
The Court was mindful of this argument when clarifying the parameters of the patent exhaustion doctrine, referring several times to the importance of not depriving Monsanto of its monopoly and rewards for innovation.
What does the case mean for farmers? The Monsanto ruling is not a big surprise but it does send a strong message to farmers, some of whom have likely grumbled over seed patents and limitations on the age-old practice of saving seed.
With the Supreme Court's decision, it's clear that the current legal system simply won't tolerate replantings of patented seeds. Instead, the law will support continued efforts by patent holders to monitor what farmers do with patented seed.
Replanting of patented seed, whether intentional or accidental, is more than ever a high risk activity.
Read the Supreme Court's decision in Bowman v. Monsanto Co. here.
