Bowman v. Monsanto Co.

Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention. The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder's permission. We hold that he may not.

Respondent Monsanto invented a genetic modification that enables soybean plants to survive exposure to glyphosate,

the active ingredient in many herbicides (including Monsanto's own Roundup). Monsanto markets soybean seed containing this altered genetic material as Roundup Ready seed. Farmers planting that seed can use a glyphosate-based herbicide to kill weeds without damaging their crops. Two patents issued to Monsanto cover various aspects of its Roundup Ready technology, including a seed incorporating the genetic alteration. See Supp.App. SA1-21 ( U.S. Patent Nos. 5,352,605 and RE39, 247E ); see also 657 F.3d 1341 , 1343-1344 (C.A.Fed.2011).

Monsanto sells, and allows other companies to sell, Roundup Ready soybean seeds to growers who assent to a special licensing agreement. See App. 27a. That agreement permits a grower to plant the purchased seeds in one (and only one) season. He can then consume the resulting crop or sell it as a commodity, usually to a grain elevator or agricultural processor. See 657 F.3d, at 1344-1345 . But under the agreement, the farmer may not save any of the harvested soybeans for replanting, nor may he supply them to anyone else for that purpose. These restrictions reflect the ease of producing new generations of Roundup Ready seed. Because glyphosate resistance comes from the seed's genetic material, that trait is passed on from the planted seed to the

raised patent exhaustion as a defense, arguing that Monsanto could not control his use of the soybeans because they were the subject of a prior authorized sale (from local farmers to the grain elevator). The District Court rejected that argument, and awarded damages to Monsanto of $84,456. The Federal Circuit affirmed. It reasoned that patent exhaustion did not protect Bowman because he had "created a newly infringing article." 657 F.3d, at 1348 . The "right to use" a patented article following an authorized sale, the court explained, "does not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee." Ibid. (brackets and internal quotation marks omitted). Accordingly, Bowman could not " 'replicate' Monsanto's patented technology by planting it in the ground to create newly infringing genetic material, seeds, and plants." Ibid.

when the patentee has received his reward ... by the sale of the article"; once that "purpose is realized the patent law affords no basis for restraining the use and enjoyment of the thing sold." Id., at 251 , 62 S.Ct. 1088 .

Consistent with that rationale, the doctrine restricts a patentee's rights only as to the "particular article" sold, ibid. ; it leaves untouched the patentee's ability to prevent a buyer from making new copies of the patented item. "[T]he purchaser of the [patented] machine ... does not acquire any right to construct another machine either for his own use or to be vended to another." Mitchell v. Hawley, 16 Wall. 544 , 548, 21 L.Ed. 322 (1873) ; see Wilbur-Ellis Co. v. Kuther, 377 U.S. 422 , 424, 84 S.Ct. 1561 , 12 L.Ed.2d 419 (1964) (holding that a purchaser's "reconstruction" of a patented machine "would impinge on the patentee's right 'to exclude others from making' ... the article" (quoting 35 U.S.C. § 154 (1964 ed.) )). Rather, "a second creation" of the patented item "call[s] the monopoly, conferred by the patent grant, into play for a second time." Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336 , 346, 81 S.Ct. 599 , 5 L.Ed.2d 592 (1961). That is because the patent holder has "received his reward" only for the actual article sold, and not for subsequent recreations of it. Univis, 316 U.S., at 251 , 62 S.Ct. 1088 . If the purchaser of that article could make and sell endless copies, the patent would effectively protect the invention for just a single sale. Bowman himself disputes none of this analysis as a general matter: He forthrightly acknowledges the "well settled" principle "that the exhaustion doctrine does not extend to the right to 'make' a new product." Brief for Petitioner 37 (citing Aro, 365 U.S., at 346 , 81 S.Ct. 599 ).

Unfortunately for Bowman, that principle decides this case against him. Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased from the grain elevator; so too he could consume the beans himself or feed them to his animals. Monsanto, although the patent holder, would have no business interfering in those uses of Roundup Ready beans. But the exhaustion doctrine does

not enable Bowman to make additional patented soybeans without Monsanto's permission (either express or implied). And that is precisely what Bowman did. He took the soybeans

its inventor. Bowman's late-season plantings offer a prime illustration. After buying beans for a single harvest, Bowman saved enough seed each year to reduce or eliminate the need for additional purchases. Monsanto still held its patent, but received no gain from Bowman's annual production and sale of Roundup Ready soybeans. The exhaustion doctrine is limited to the "particular item" sold to avoid just such a mismatch between invention and reward.

Our holding today also follows from J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc., 534 U.S. 124 , 122 S.Ct. 593 , 151 L.Ed.2d 508 (2001). We considered there whether an inventor could get a patent on a seed or plant, or only a certificate issued under the Plant Variety Protection Act (PVPA), 7 U.S.C. § 2321 et seq. We decided a patent was available, rejecting the claim that the PVPA implicitly repealed the Patent Act's coverage of seeds and plants. On our view, the two statutes established different, but not conflicting schemes: The requirements for getting a patent "are more stringent than those for obtaining a PVP certificate, and the protections afforded" by a patent are correspondingly greater. J.E.M., 534 U.S., at 142 , 122 S.Ct. 593 . Most notable here, we explained that only a patent holder (not a certificate holder) could prohibit "[a] farmer who legally purchases and plants" a protected seed from saving harvested seed "for replanting." Id., at 140 , 122 S.Ct. 593 ; see id., at 143 , 122 S.Ct. 593 (noting that the Patent Act, unlike the PVPA, contains "no exemptio[n]" for "saving seed"). That statement is inconsistent with applying exhaustion to protect conduct like Bowman's. If a sale cut off the right to control a patented seed's progeny,

Bowman principally argues that exhaustion should apply here because seeds are meant to be planted. The exhaustion doctrine, he reminds us, typically prevents a patentee from controlling the use of a patented product following an authorized sale. And in planting Roundup Ready seeds, Bowman continues, he is merely using them in the normal way farmers do. Bowman thus concludes that allowing Monsanto to interfere with that use would "creat[e] an impermissible exception to the exhaustion doctrine" for patented seeds and other "self-replicating technologies." Brief for Petitioner 16.

But it is really Bowman who is asking for an unprecedented exception-to what he concedes is the "well settled" rule that "the exhaustion doctrine does not extend to the right to 'make' a new product." See supra, at 1766. Reproducing a patented article no doubt "uses" it after a fashion. But as already explained, we have always drawn the boundaries of the exhaustion doctrine to exclude that activity, so that the patentee retains an undiminished right to prohibit others from making the thing his patent protects. See, e.g., Cotton-Tie Co. v. Simmons, 106 U.S. 89 , 93-94, 1 S.Ct. 52 , 27 L.Ed. 79 (1882) (holding that a purchaser could not "use" the buckle from a patented cotton-bale tie to "make" a new tie). That is because, once again, if simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction. And that would result in less incentive for innovation than Congress wanted. Hence our repeated insistence that exhaustion applies only to the particular item sold, and not to reproductions.

Nor do we think that rule will prevent farmers from making appropriate use of the Roundup Ready seed they buy. Bowman himself stands in a peculiarly poor position to assert such a claim. As noted earlier, the commodity soybeans

he purchased were intended not for planting, but for consumption. See supra, at 1764 - 1765. Indeed, Bowman conceded in deposition testimony that he knew of no other farmer who employed beans bought from a grain elevator to grow a new crop. See App. 84a. So a non-replicating use of the commodity beans at issue here was not just available, but standard fare. And in the more ordinary case, when a farmer purchases Roundup Ready seed qua seed-that is, seed intended to grow a crop-he will be able to plant it. Monsanto, to be sure, conditions the farmer's ability to reproduce Roundup Ready; but it does not-could not realistically-preclude all planting. No sane farmer, after all, would buy the product without some ability to grow soybeans from it. And so Monsanto, predictably enough, sells Roundup Ready seed to farmers with a license to use it to make a crop. See supra, at 1764, 1767, n. 3. Applying our usual rule in this context therefore will allow farmers to benefit from Roundup Ready, even as it rewards Monsanto for its innovation.

Still, Bowman has another seeds-are-special argument: that soybeans naturally "self-replicate or 'sprout' unless stored in a controlled manner," and thus "it was the planted soybean, not Bowman" himself,

trait; and saved beans from the rest for the next season. He then planted those Roundup Ready beans at a chosen time; tended and treated them, including by exploiting their patented glyphosate-resistance; and harvested many more seeds, which he either marketed or saved to begin the next cycle. In all this, the bean surely figured. But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto's patented invention.

Our holding today is limited-addressing the situation before us, rather than every one involving a self-replicating product. We recognize that such inventions are becoming ever more prevalent, complex, and diverse. In another case, the article's self-replication might occur outside the purchaser's control. Or it might be a necessary but incidental step in using the item for another purpose. Cf. 17 U.S.C. § 117 (a)(1) ("[I]t is not [a copyright] infringement for the owner of a copy of a computer program to make ... another copy or adaptation of that computer program provide[d] that such a new copy or adaptation is created as an essential step in the utilization of the computer program"). We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances. In the case at hand, Bowman planted Monsanto's patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article. Patent exhaustion provides no haven for that conduct. We accordingly affirm the judgment of the Court of Appeals for the Federal Circuit.

It is so ordered.

harvested soybeans: Indeed, a single Roundup Ready seed can grow a plant containing dozens of genetically identical beans, each of which, if replanted, can grow another such plant-and so on and so on. See App. 100a. The agreement's terms prevent the farmer from co-opting that process to produce his own Roundup Ready seeds, forcing him instead to buy from Monsanto each season.

Petitioner Vernon Bowman is a farmer in Indiana who, it is fair to say, appreciates Roundup Ready soybean seed. He purchased Roundup Ready each year, from a company affiliated with Monsanto, for his first crop of the season. In accord with the agreement just described, he used all of that

then (contrary to J.E.M. ) the patentee could not prevent the buyer from saving harvested seed. Indeed, the patentee could not stop the buyer from selling such seed, which even a PVP certificate owner (who, recall, is supposed to have fewer rights) can usually accomplish. See 7 U.S.C. §§ 2541 , 2543. Those limitations would turn upside-down the statutory scheme J.E.M. described.

that made replicas of Monsanto's patented invention. Brief for Petitioner 42; see Tr. of Oral Arg. 14 ("[F]armers, when they plant seeds, they don't exercise any control ... over their crop" or "over the creative process"). But we think that blame-the-bean defense tough to credit. Bowman was not a passive observer of his soybeans' multiplication; or put another way, the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops. As we have explained, supra at 1764 - 1765, Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium. He purchased beans from a grain elevator anticipating that many would be Roundup Ready; applied a glyphosate-based herbicide in a way that culled any plants without the patented