Author: Claire Kinlaw
At TerViva, we’ve been following the recent buz around an important patent case: Bowman vs. Monsanto (http://www.agweb.com/article/monsanto_supreme_court_case_stirs_social_commentary/). This case centers on the underlying conflict between intellectual property protection and antitrust policy.
Monsanto, a major agriculture and biotechnology company with annual revenues of more than $13B (2012 annual report), is a major player in the production of genetically modified seeds (GM seeds), and has essentially a soy seed monopoly.
Glyphosate, first discovered and patented by Monsanto in the 1970’s and sold under the brand name Roundup® is now off patent and produced by numerous chemical companies (Dow, Bayer, Syngenta, for example). Glyphosate is the most widely used herbicide in the US today. Monsanto’s full Roundup Ready® line of products, including genetically modified seeds (that remain on patent), represent about half of Monsanto’s yearly revenue. (Wikipedia). Other Roundup Ready® crop seeds sold by Monsanto include: corn, cotton, alfalfa, and sugar beets (with sorghum on the way).
Genetically modified crops dominate the agriculture industry in the United States. For example, in 2010, 70% of all the corn that was planted was herbicide-resistant; 78% of cotton, and 93% of all soybeans.
Roundup Ready® crops, the intellectual property of Monsanto, have been genetically modified to contain introduced genes that allow them to withstand the herbicide glyphosate. When planting glyphosate tolerant crops, a farmer can spray the entire crop with glyphosate, killing only the weeds and leaving the crop unharmed. Thus glyphosate tolerant crop varieties in concert with glyphosate spraying provide for effective weed management and lead to increased yields, thereby increasing farm revenue.
Roundup Ready® soy seed are a particularly challenging case from an intellectual property point of view for Monsanto as the inventor. This challenge results from the biology of soybean. Soybean plants self-pollenate and are generally homozygous, meaning that for most genes, they have two identical copies. Outcrossing crops like corn or alfalfa tend to be more heterozygous, meaning they have two different versions of each of their genes.
Therefore, offspring from purchased soybeans will be essentially identical to purchased seeds. In particular, glyphosate tolerant parents created by Monsanto will produce a high percentage of glyphosate tolerant offspring seeds. The biology of soybean is central to the court case in question.
What are the basics of the case?
In order to protect its intellectual property, and benefit from its multi-million dollar investment in research and development over the last two decades, Monsanto requires farmers to sign contracts under which farmers agree not to save and replant the seeds produced from the plants that grow from Monsanto seeds. Farmers return to Monsanto to buy new seeds every year.
Mr. Bowman having previously purchased Monsanto’s Roundup Ready® soy seeds for his major planting then purchased seeds from a local grain elevator for off season planting. He reasoned that most of the aggregated seed from the multiple sources would be glyphosate resistant. He was correct in his reasoning and was able to avoid the higher costs of purchasing additional Monsanto seeds while reaping the benefit of glyphosate resistance for weed control. The soy plants that he grew from the grain elevator source seed were glyphosate resistant because they “self-replicated almost entirely from Monsanto GMO plants containing Monsanto’s patented transgene.
Monsanto sued Mr. Bowman maintaining that he had infringed on their patents.
What impacts will this case have?
Far beyond its impact on farmers and Monsanto, at issue in this case before the Supreme Court is the fundamental balance between intellectual property protection and antitrust policies (http://www.pbs.org/newshour/bb/law/jan-june13/scotus_02-19.html). Although patent laws and antitrust laws are both designed to help bring innovation into the economy, the issue is how.
Patent law and case history provide for the protection of an investor’s intellectual property in the following way. When an invention is sold (say a plant) the buyer has the right to “use” that invention in essentially any (legal) way he/she wants. The buyer does not however have the right to produce more copies or replicate that invention. But, what if the invention replicates itself, as in the case of soybean seeds that make plants that make more seeds?
On the other hand, because Monsanto has a virtual monopoly on soy seeds in the US and is heading toward monopolies on other crops, competition in vital agricultural commodities is at risk.
Ironically, even if the Supreme Court rules against them in the case in question, Monsanto may be able to turn to a new technology to further block farmers from getting around their intellectual property by replicating their own glyphosate resistant soybean. Through this technology, called terminator technology, Monsanto, would produce seeds that could grow properly and provide high yields of soybeans suitable for all the downstream products currently made from soy. However these soy seeds would fail to germinate, thus failing to produce a second generation of plants. (http://www.nature.com/news/seed-patent-case-in-supreme-court-1.12445)
How the Supreme Court rules in this case involving a self-replicating invention will have implications far wider than agriculture for industries like nanotechnology, biotechnology, and software where products can make copies of themselves. Stakeholders among all these industries will be watching carefully for the Supreme Court’s ruling, expected by June.