Supreme Court to Rule on Monsanto Ruling

The US Supreme Court is set to rule on a decision by the United States Court of Appeals for the Federal Circuit, in which that court ruled that the doctrine of exhaustion did not cover second-generation genetically altered crops. To make sense of this, a little background may be in order.

In 1994, Monsanto obtained a patent covering a line of "Roundup Ready" crops genetically altered to resist Monsanto's Roundup herbicide. The modification is hereditary, which is to say that 2nd-generation (and subsequent generation) seeds inherit this resistance. To avoid buying new seeds from Monsanto next year, farmers had merely to save some of this year's crop and plant it next year. Monsanto defended against this possibility by forcing purchasers to sign an agreement promising not to replant n-generation seeds: no signature, no beans. However, farmers remained free to sell their crops on the open commodity market; almost all such crops feed either people or livestock.

So far, so good (at least for Monsanto, if not the farmers). However, upon occasion success can bite you in the ass. Monsanto's superbeans quickly dominated the market (94% of all acres in Indiana, for example). And therein lies the rub. Monsanto seeds were so dominant that all a farmer had to do was buy a bunch of commodity soybeans, and most or all of them would be Roundup Ready, not to mention significantly cheaper than the official beans sold by Monsanto.

An Indiana farmer named Vernon Bowman did just that; when Monsanto found out what he was doing, it sued him for patent infringement.

In American law there is a principle known as "patent exhaustion", which holds that a patent holder's rights to a product are "exhausted" when that product is sold to an end user. In a similar case, the Supreme Court strengthened the Patent Exhaustion doctrine in 2008, ruling on a case in which the electronics giant LG was prevented from "double-dipping", for attempting to extract royalties from chipmaker Intel and OEM Quanta, which was using Intel's chips.

One might argue that as far as it goes, Monsanto has a point: Bowman and others could buy seeds from Monsanto or for that matter from the commodity market, then grow a crop for seed, and sell the next generation(s) royalty-free.

The problem with this argument is that it does not go back far enough. All this could have been, and indeed was, predicted when it was originally ruled that life-forms, genetically altered or otherwise, could be patented.

I'm a realist. The barn is burning and tough luck for the horses, natural or genetically altered, therein. It is almost unimaginable that the original patents could now be overturned. Fortunately, this point applies strictly to the United States; the civilized world has taken a longer and deeper view.

In 2011, the United States Court of Appeals for the Federal Circuit ruled that the doctrine of exhaustion did not apply to second-generation crops. Monsanto appealed, and thus the case finds itself in the Supreme Court.

If there's an up-side to all this, it is that even a ruling by the Supreme Court covers only the United States. As mentioned, the rest of the world remains unaffected. As Martha Stewart would say, this is a Good Thing. Farmers in the rest of the world remain free to buy commodity soybeans, transport them to other nations, and reproduce them at will, royalty-free.

However, corporations like Monsanto are nothing if not resilient (not to mention rapacious). Since my predictions regarding this and related situations have proved accurate, my digital crystal ball suggests that the next release of Monsanto soybeans, 3.0, will yield sterile beans; hence, no second-gen, hence no problem.

But turnabout is fair play, so let us imagine that within the current crop of beans there lurks some unforeseen side effect -- say, that the animals and people who consume them suffer loss of eyesight or worse. Now that Monsanto wants to claim patent rights on all generations of the accused beans, the corporation implicitly admits causation not only of those affected by first-gen beans, but also in the cases of those affected by n-gen beans.

Much as I despise the ruling that (at least within the USA) genes (both altered and unaltered, c.f. the patents claimed on the DNA of tribes-people from Brazil and elsewhere) can be patented, then the disseminators of said products are ipso facto liable for any side effects attributed to said products. I see no wiggle-room here: you're in or out. In for a soybean, in for a class-action lawsuit? Or out on both? What shall it be, Monsanto?