The U.S. Supreme Court settled one of two key patentability issues affecting biopharma—without committing itself to a decision on the other—when its justices decided unanimously that Monsanto’s right to enforce its patents for genetically modified soybean seed extended beyond their initial sale.
A 75-year-old farmer from Indiana, Vernon Hugh Bowman, argued that Monsanto exhausted its rights once the first generation seed was sold by its original farmers as a commodity. The Supreme Court, however, upheld Monsanto’s intellectual property rights to the seed beyond an authorized sale over Bowman’s rights in growing multiple generations of the seed on his Knox County farm.
In ruling for Monsanto, the Supreme Court upheld two lower court decisions in the company’s favor. The U.S. District Court for the Southern District of Indiana, 686 F.Supp.2d 834 (S.D. Ind. 2009) awarded an $84,456 judgment against Bowman, affirmed by the U.S. Court of Appeals for the Federal Circuit, 657 F.3d 1341 (Fed. Cir. 2011).
“It’s not a sweeping case. But it could have been if it had been decided differently,” Erich E. Veitenheimer III, Ph.D., a partner with law firm Cooley LLP told GEN. “I don’t think there are any big surprises there. One would have thought that’s what they would have decided before the case got taken up.”
Gerry J. Elman, editor in chief of Biotechnology Law Report, a journal published by GEN publisher Mary Ann Liebert Inc., told GEN the Monsanto outcome will benefit the broader biopharma industry.
“The Court of Appeals for the Federal Circuit articulated a longstanding legal principle of what happens when you reconstruct a patented product from some material you got from the patentee, and something new, and found applicable here. Admirably, the Supreme Court has adopted that particular line of reasoning,” Elman said.
He added that the Monsanto decision aligned the court with its landmark decision in Diamond v. Chakrabarty, in which the justices decided 5–4 to uphold the patentability of human-made microorganisms as a valid new and useful “manufacture or composition of matter” under 35 U.S.C. § 101.
“That’s good news for the biotechnology community, along the line that Chakrabarty in 1980 was seen as good news in general for the biotechnology community,” said Elman.
However, Dr. Veitenheimer and another lawyer disagree that the case is as far-reaching as Chakrabarty, which sparked nearly three decades of Supreme Court decisions favorable to biopharma.
Thomas C. Meyers, a partner with law firm Brown Rudnick, noted that the court decided seed patentability in J. E. M. Agricultural Supply v. Pioneer Hi-Bred International 534 U. S. 124 (2001), where a majority found inventors could obtain patents on a seed or plant.
Not in dispute is that the industry’s hot streak abruptly ended last year, however, when the high court unanimously overturned two patents held by Nestle’s Prometheus Laboratories subsidiary for its methods of dosage calibration for thiopurine drugs for gastrointestinal and nongastrointestinal autoimmune diseases.
Prometheus sued in U.S. District Court in 2004, alleging that an announced (but never marketed) Mayo Medical Laboratories diagnostic test infringed two Prometheus patents. Mayo’s test measured the same metabolites as Prometheus’, but the former used different levels to determine toxicity of the two metabolites.
Though the high court has sided with biotech interests of late, as in the Bowman v. Monsanto Co., et al., case, it has sought to limit the impact of its words. Justice Elena Kagan, who wrote the decision, cautioned: “Our holding today is limited—addressing the situation before us, rather than every one involving a self-replicating product.”
Yet as Meyers noted, Kagan’s decision has significance beyond Monsanto and Bowman in its dismissal of the farmer’s patent-exhaustion argument as “asking for an exception to the well-settled rule that exhaustion does not extend to the right to make new copies of the patented item.”
“If simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention,” Meyers said. “That would result in less incentive for innovation than Congress wanted.”
Over the next several days, the Supreme Court will deliver another blockbuster decision in another closely watched patentability case. Myriad Genetics is trying to protect its seven patents for BRCA 1 and 2 from a four-year-old legal challenge raised by 20 medical associations and individual doctors led by the Association for Molecular Pathology and assisted by the American Civil Liberties Union and Public Patent Foundation. They sued Myriad and the U.S. Patent and Trademark Office in 2009 over the company’s patents, as well as Myriad’s method for analyzing sequences of those genes for breast-cancer mutations.
While Meyers and Dr. Veitenheimer said Bowman won’t affect the eventual Myriad decision, Ellman disagreed, saying the Monsanto outcome shows the court will likely side with patent-holders in the upcoming case too: “This appears to be an indication that the Supreme Court is not hell-bent on tearing down the carefully constructed superstructure of the U.S. patent regime, which indeed is mandated by the U.S. Constitution,” he said. Article I, Section 8 includes among Congressional powers: “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
Meanwhile, Monsanto’s critics appear unwilling to retreat. They have shifted the field of battle, however, from federal courts—where they have consistently lost in recent years—to the court of public opinion.
The Supreme Court in 2010 sided with Monsanto and the U.S. Department of Agriculture (USDA) in a 7–1 ruling upholding the agency’s 2005 approval of the company’s “Roundup Ready” GM line of alfalfa seeds. GM foes also lost a later lawsuit to overturn USDA’s approval of Roundup Ready sugar beet seeds.
So far, the Senate hasn’t proven much friendlier to Monsanto critics. By 71–27, the Senate on May 23 rejected an amendment by Sen. Bernie Sanders (I-VT) allowing states to decide if GM food must be labeled as such. That day, Senate Republicans blocked an amendment by Sen. Jeff Merkley (D-OR) to repeal Section 735, a budget-bill rider authorizing USDA to temporarily allow continued growing of crops it previously approved. Supporters call the rider a “Farmer Sustainability Act,” while opponents prefer “Monsanto Protection Act.”
The company’s critics promoted their case May 25 through a “Global Day of Action to Shut Down Monsanto,” a series of events capped by a 10-point policy agenda calling in part for an immediate moratorium on development and certification of GM crops, “clear” GM labeling, a repeal of Section 735, and an end to alleged Monsanto influence on Washington.
Monsanto opponents hope the figurative seeds they’re planting with state legislators and the public will take root in new laws against the company and other GM seed producers. Such laws, however, will have to withstand judicial reviews that typically uphold precedent, making any change a long-term project at best.