Thursday, July 4, 2013

Bowman v. Monsanto Co.: U.S. Supreme Court Limits Doctrine of Patent Exhaustion by Prohibiting Purchasers from Making and Marketing Replicas of Patented Soybeans

As we previously predicted at LawPundit on the basis of the oral arguments to the case, the U.S. Supreme Court decided unanimously in favor of the patent holder in Bowman v. Monsanto Co., holding as follows in an opinion by Justice Kagan:
"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."
The Court ALSO stated by way of limitation as follows:
"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.
By so doing, the Supreme Court took the simplest path of decision in this case and applied a clear legal standard to the undenied facts, as the Court should do, without problematical hair-splitting concurrences or dissents. Well done.

Crossposted from LawPundit.

Tuesday, February 26, 2013

U.S. Supreme Court Likely to Hold in Bowman v. Monsanto that Unauthorized Self-Replicated Copies of Patented Monsanto Seeds are Patent Infringement

Last week, the U.S. Supreme Court held oral argument on
Bowman v. Monsanto Co.

Adam Liptak reported at the NYTimes.com in Supreme Court Hears Arguments in Bowman v. Monsanto.

It is clear from the questioning during oral argument that Monsanto will prevail on the merits, although it appears to this observer that many commentators underestimate the judicial and legal difficulty of this case, which the Supreme Court took on because it is the first time that the patent rights to progeny of a "self-replicated" product are being decided, i.e. whether successive generations of self-replicating seeds are subject to Monsanto patents on the "original" humanly and genetically-modified non-replicated seed.

Oral argument suggests quite convincingly that the Supreme Court will not rely on some kind of conditional sales doctrine as representing some form of restrictive "license" as a limitation on the first sale doctrine. As Justice Breyer said in this regard:
"Now, they -- they thought, the [Federal C]ircuit, that there's some restriction in a license and they have a doctrine that seems to say that you can restrict licenses -- through licenses the use of a product after it's been sold. And that would seem contrary to the first sale doctrine""
Obviously, the Supreme Court will be sure to set the Federal Circuit straight on its "lingering confusion" (quoting Justice Sotomayor) with respect to conditional sales. "Sales" have nothing to do with the coming decision per se.

Furthermore, the Court will also not rely on contractual limitations as the means by which patent holders must protect their rights. Patent rights as such are rights granted by the patents themselves, and not by contracts.

Rather, it is quite clear that the Supreme Court will hold that successive generations of self-replicating genetically modified and thus rightfully "patented" seeds are "copies" of the original patented seed, the "making" of which via unauthorized copies is prohibited.

Such a resolution as above of the legal problem presented by the case may appear by hindsight to be "apparent", but by no means necessarily obvious as a matter of law. Indeed, a strict view of the facts would hold that "God" makes the copies in the case of seed replication, regardless of genetic modification, even if human intervention (planting, fertilizing, watering, etc.) may also be required. In any case, the definition of "copying" here will be extended by the Court to its furthest possible limit for purposes of patent law.

It must be emphasized here in closing that the patents to the Monsanto soybeans involve the insertion of a genetic sequence into the germplasm of seeds that makes the resulting plants resistant to glyphosate, a herbicide manufactured by Monsanto, that otherwise kills other plants and weeds by inhibiting an enzyme necessary for growth.

When glyphosate is applied from the air, other plants and weeds in the field are killed while the resistant genetically modified plants survive and grow.

In other words, contrary to the situation in the upcoming Myriad case decision at the Supreme Court involving human genes, the "seed" here "created" by Monsanto has been truly "humanly" altered, even if the patent incorporates the original soybean seed or other plant seed as the object of the genetic modification. In Myriad, by contrast, there is the attempt to patent "cleaved snips" of actually existing human genes, and that of course will be denied by the Supreme Court, since the genetic code remains as is for its operative part, and is used principally as such, even if in abbreviated form.

In Monsanto there is a completely new addition to the genetics of the seed. In Myriad, one is merely using a genetics that is already there.

See the briefs to the Monsanto case at americanbar.org.

Wednesday, March 28, 2012

Myriad Patent Case Vacated and Remanded by U.S. Supreme Court in Light of Prometheus


Stanford Law Professor Hank Greely has a quick note in The Supreme Court Has Gavrilo’d the Myriad Case writing:
"Granted, vacated, and remanded in light of... Prometheus."
We previously posted about Myriad at Split Federal Circuit in Myriad Case Partially Reverses District Court and Finds Isolated Human Genes to be Patentable: Subsequent Supreme Court Review of this Case is Surely Essential.

This is really a toss of the ball back into the Federal Circuit's court, giving them a chance to apply Prometheus sensibly and, of course, to rule instead that isolated human genes are not patentable, which is and can be the only acceptable decision.

The logic we suggest is: if you cleave an orange in two, you can not claim the two orange halves as inventions, and so it is also with human genes.

Crossposted from LawPundit.

Tuesday, March 27, 2012

Prometheus Diagnostic Method Claims Not Patentable Says U.S. Supreme Court

Text below crossposted from LawPundit.

BRAVO to the United States Supreme Court! The unanimous (who would have believed that!) U.S. Supreme Court decision in Mayo v. Prometheus (and also the unanimous decision in Sackett vs. EPA) have restored our faith that the nation's highest court can be counted upon to see past the hype, spot the major legal issues facing the world, and decide them correctly. In the past, we have spent so much time at LawPundit battling against insanity in the patent sector (see here, here and here), that I am happy here just to pass along to you the following email which I received today. As a Paul, Weiss alum, I ask the people at Paul, Weiss to overlook my posting their letter in entirety, since the letter is covered by all kinds of copyright protection, but this is a very important case, and so it is probably better to let one of the world's top law firms give you the scoop, rather than my commentating it again from my admittedly biased point of view. The text of the Paul|Weiss email is given below, while the full text of the Client Memorandum summarizing the Prometheus decision (only 4+ pages in the memo, beautifully written) is accessible by clicking the link in that email:

Client Memorandum
March 21, 2012
Paul, Weiss, Rifkind, Wharton & Garrison LLP

Paul | Weiss
Client Memorandum





The Supreme Court Holds That Prometheus’s Diagnostic Method Claims Are Unpatentable Under 35 U.S.C. § 101


The United States Supreme Court issued a significant, unanimous decision yesterday in Mayo Collaborative Services v. Prometheus Laboratories, Inc., No. 10-1150 (2012), holding that certain diagnostic patent claims were invalid for failure to recite patent-eligible subject matter under 35 U.S.C. § 101. The Court determined that the “steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field,” and noted that “upholding the patents would risk disproportionately tying up the use of the underlying natural laws, inhibiting their use in the making of further discoveries.” In so holding, the Supreme Court reversed a Federal Circuit decision that the method claims were patent-eligible under the machine-or-transformation test, and do not impermissibly claim natural phenomena.

The Supreme Court’s opinion is of interest to pharmaceutical and biotechnology companies because the decision leaves a large number of therapeutic and diagnostic patent claims vulnerable to challenge, especially those that concern correlations resulting from natural body processes. The Supreme Court’s decision states, however, that new drugs and new methods of using existing drugs remain patentable subject matter. And the decision suggests that certain patents covering diagnostic tests directed at the measurement of new or previously unknown analytes would withstand challenge under § 101.

A link to the memo is attached. If for security reasons your e-mail system does not enable web links, please copy and paste the link into the address window of your Internet browser.





    
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Stanford Law Prof Greely Blogging on Obamacare Oral Arguments Before the U.S. Supreme Court: Day One


Professor Hank Greely of Stanford Law School is blogging at the Law and Biosciences Blog on the oral arguments before the U.S. Supreme Court, Day One.

He is suggesting that the court will find that the Anti-Injunction Act will not apply, prohibiting as it does, cases on taxes to be brought to the courts before the tax has been assessed.

This issue should not be underestimated because the U.S. Supreme Court can not permit a situation where every time some political faction does not like a new law of Congress, they turn to the Supremes.

Now, it is clear that Obamacare is not a direct tax, but there is in our mind no question that the Affordable Health Care Act is a form of indirect taxation and passed as it was to spread the costs of health care more equitably and to make affordable health available for all.

Hence, after all is said or done, it is not guaranteed that the court will not rule this an indirect tax to which the Anti-Injunction Act applies.

The Court has to be careful that it is not put into direct confrontation with Congress, indeed, be put in a position of second-guessing Congressional legislation before the actual act of implementation. Simply put, you have to have a harm to allege a harm. You can not be theorizing about the future.

We agree with Greely that that the Anti-Injunction Act will be held not to apply because this is not a direct tax, but also agree that if the Court can not reach a sensible consensus on the merits, they will always have this option available as an escape hatch.

Even if the Court does not use this escape hatch, they should direct some strong words at all the people who are pushing this case for POLITICAL reasons rather than actually being concerned about the Act's Constitutionality, which has been raised merely as an excuse to challenge legislation that is not liked by one political extreme.

A Supreme Court acting as a political referee would be in deep trouble down the road.

Congress, for better or worse, makes the laws, not the Supremes.
Hence, the Supreme Court Justices can not play legislator here.


Crossposted from LawPundit.

Saturday, October 15, 2011

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