Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Sunday, February 24, 2013

First Sale Doctrine on a Blank Slate

Posted by Shubha Ghosh

On Tuesday, February 19, the Supreme Court heard oral arguments in Bowman v. Monsanto, a case involving the first sale doctrine and patented genetically modified seeds. When Bowman, an independent farmer from Indiana, planted soybean seeds purchased from the aftermarket supplied by granaries, he could not expect that nine Justices might produce new precedent on something as obscure as the first sale doctrine. But that new precedent vary likely will be the fruit of the aftermath of Bowman’s innocent efforts.

As the Court affirmed in its Quanta decision in 2008, the first sale doctrine allows a purchaser of a patented invention to resell the product or process embodying the invention. However, in the range of cases involving the first sale doctrine, the resold product or process could not recreate itself. The facts of Bowman introduce this wrinkle. Consequently, the Federal Circuit held that there was an exception to the first sale doctrine for “self-replicating technologies” such as seeds. The Court now has to decide whether such an exception is consistent with its precedent.

Judging from last Tuesday’s oral arguments, the Court seems poised to sidestep that question. Justice Breyer’s questions for Bowman’s attorney focused on the established point that the first sale doctrine allows the purchaser to resell, but not to make another copy of the product. Bowman, Justice Breyer asserted, did make another copy of the patented genome by planting the seed and germinating it. The other Justices followed similar lines of inquiry in favor of Monsanto. Surprisingly, Justice Scalia asked the Assistant SG whether limiting the first sale doctrine would disadvantage farmers in their replanting of seeds. In that vein, Justices Kagan and Sotomayor raised questions about innocent patent infringement by farmers not knowing which seeds are patented. All in all, though, the oral arguments signaled a victory for Monsanto.

Justice Breyer’s questions assume that there is no difference for patent infringement between making genetic material in the lab and making it through natural reproductive processes. But the word “make” in the Patent Act certainly encompasses the first but not the second. We know this because when Congress enacted the Patent Act it had enacted a separate statute to deal with plant patents. It was only in 2000 that the Court ruled in JEM v. Pioneer Hybrid that genetically modified plants could be protected by both the Plant Patent Act and the Patent Act. The Court will most likely continue this broadening of the Patent Act by ruling that “make” now includes planting seeds and having them grow through natural processes.

If the Court rules that Bowman does not have advantage of the first sale doctrine because he made another product, the decision would have the appearance of preserving the first sale doctrine without exception while benefitting distributors of inventions that self-reproduce. This holding would have implications not only for industries that create technologies from the life sciences but also for those making digital and other electronic inventions. In ruling for Monsanto, the Court will be reshaping the first sale doctrine for the age of biotechnology and digital technologies. Perhaps this is an appropriate result for a common law rule like the first sale doctrine in patent law. However, common law development should take into account the range of interests affected by the rule and not just patent owners. With Justice Scalia asking questions that are pro-farmer, could he actually be the savior of the first sale doctrine?

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