RETAINING GENETICALLY ENGINEERED SEED? CONSIDER RETAINING A LAWYER
Phillip B.C. Jones
April, 2005
"My daddy saved seed. I saved seed," Homan McFarling recently told The Associated Press. The Mississippi farmer has been fighting Monsanto in federal courts over his right to replant crop seed derived from a harvest. While the practice of saving seed may be ancient, the seed itself is something new. It contains Monsanto's proprietary technology.
Federal Circuit Upholds Prohibition against Saving Seed
In 1998, McFarling purchased Monsanto's Roundup Ready® soybean seeds and signed the company's Technology Agreement. This contract required him to use the seed for planting a commercial crop in a single season. It also recited three prohibited acts: supplying seed to any other person for planting, saving any crop produced from the seed for replanting, and supplying saved seed to anyone for replanting. Despite the prohibitions, McFarling saved 1500 bushels of Roundup Ready soybeans from his 1998 harvest and planted them the following year. He saved over 3000 bags of soybeans from his 1999 harvest for his next crop.
Before McFarling replanted soybeans collected from the 1998 harvest, he sent them to a third party for cleaning. Monsanto obtained a sample and had the DNA analyzed at Mississippi State University. When genetic analysis indicated that McFarling had saved Roundup Ready seeds, Monsanto sued the farmer in the Eastern District of Missouri, alleging patent infringement and breach of contract. The court forbade the farmer from using seed saved from crops grown with the patented soybeans. McFarling appealed to the Court of Appeals for the Federal Circuit. He lost.
Back in district court, Monsanto moved for summary judgment on its claims for patent infringement and breach of the Technology Agreement. The court ruled in favor of Monsanto and McFarling appealed. Once again at the Federal Circuit, McFarling argued, among other things, that the district court erred when it ruled against his patent misuse defense, his antitrust counterclaim, and his defense under the Plant Variety Protection Act.
The patent misuse doctrine aims to prevent a patentee from suppressing competition by impermissibly broadening a patent's scope. McFarling argued that Monsanto had committed patent misuse by impermissibly tying an unpatented product to a patented product. He argued that "
y prohibiting seed-saving, Monsanto has extended its patent on the gene technology to include an unpatented product–the germplasm–or God-made soybean seed which is not within the terms of the patent." The court did not accept this argument, because McFarling could buy soybean germplasm without the glyphosate tolerance trait that brings the soybean within the scope of Monsanto's patent.
The court looked beyond this tying argument and suggested that something else really annoyed the farmer: the license controlled what McFarling could do with the second generation seeds that he had produced with the seeds acquired under the license. Monsanto's patent entitles the company to this degree of control, the court reasoned, because the patent claims cover the second generation of Roundup Ready soybeans. With regard to McFarling's antitrust argument, the court considered this a repackaged patent misuse defense. The court could see no evidence that Monsanto's licensing restrictions went beyond the boundaries of the patent grant.
In the third line of defense, McFarling contended that the Agreement's prohibitions violate the Plant Variety Protection Act. The PVPA permits farmers to save seeds of registered plants. The court disagreed that this right under the PVPA imparts the right to save seeds protected by the Patent Act.
Several months after the McFarling decision, a Mississippi federal district court judge considered Monsanto's patent infringement suit against Mitchell and Eddie Scruggs for planting unlicensed Roundup Ready seed. The defendants alleged that Monsanto's ban on saving seed had an anticompetitive effect that violated federal antitrust law. Citing the McFarling case, the judge wrote that, "Monsanto's no replant policy is not subject to challenge under the antitrust laws."
Legislators Attempt to Abolish Seed Saving Prohibitions
Is it possible to change the laws that justify bans against saving seed? Wes Shoemyer, a member of the Missouri House of Representatives, promoted legislation that would allow farmers to save the seed from patented, genetically engineered crops. Legislators in Iowa, Ohio, and Minnesota have introduced similar seed-saving bills. While Shoemyer acknowledged that state law cannot limit patent rights, he hoped that his efforts would drive the issue to the federal level.
On June 24, 2004, Representative Marcy Kaptur (D-OH) realized this hope by introducing the Seed Availability and Competition Act (H.R. 4693). Her legislation would allow farmers who plant patented seed to retain seed from the harvest for replanting. This benefit would come with a price: farmers who replant saved seed would have to pay into a Patented Seed Fund. Administered by the U.S. Department of Agriculture, the fund would be used to reimburse the relevant patent holders. This safe harbor for retaining and using seed would override any contractual limitations or obligations to pay royalties or licensing fees.
While the National Farmers Union (http://www.nfu.org) and the American Corn Growers Association (http://www.acga.org) -supported the bill, not all agricultural trade organizations agreed. The National Cotton Council (http://www.cotton.org), the National Corn Growers Association (http://www.ncga.com) and the American Soybean Association (http://www.soygrowers.com) sent a letter to members of Congress expressing their concern about the legislation. The groups asserted that the bill would transform the current marketplace-driven system into a government-administered program and eliminate incentive for companies to invest in long-term research and development required to produce enhanced seed attributes. The USDA has been silent about its enthusiasm for the proposed administrative burden.
The House parked the Seed Availability and Competition Act in two committees throughout 2004. Kaptur promised to reintroduce the bill this year. It is unclear, however, whether the legislation could inspire more enthusiasm this year than last. The Center for Food Safety explores other options for resolving conflicts over saved seed in its report, "Monsanto vs. U.S. Farmers." Professor Drew L. Kershen offers his analysis of the document in this ISB News Report.
Selected Sources
Elias P (2005) Monsanto suing farmers over piracy issues. The Associated Press. January 13, 2005
Gannet News Service (2004) Farmers, biotech companies spar over seeds. Quad-City Times. August 7, 2004
Monsanto v. McFarling, 363 F.3d 1336 (Fed Cir. 2004)
Monsanto v. Scruggs, 342 F.Supp.2d 568 (N.D. Miss., 2004)
Phillip B. C. Jones, PhD., J.D.
Spokane, Washington
[email protected]