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US Supreme Court decides in favour of producer in important case

May 14, 2013

USSupremeCourtThe Supreme Court has backed agricultural company Monsanto in its fight against a farmer, with the decision potentially dangerous for the US remanufacturing industry.

The Guardian reported that Supreme Court Justice Elena Kagan ruled in favour of Monsanto in its case against Vernon Bowman, a farmer from Indiana, in the case concerning soybeans sold to the farmer. The battle saw Monsanto fighting for the right to impose “post-sale restrictions on the use of its patented products”, which would have a knock-on effect for all forms of remanufacturing.

The Recycler previously reported on the “chilling” effects such a ruling could have on the US cartridge remanufacturing industry, with the I’ITC supporting Bowman alongside two car remanufacturing associations with a “friend of the court brief”, asking for the first appeal ruling to be overruled.

The case concerned the sale of soybean seeds to farmers that contain genetically-altered materials patented by farmers, with the seeds sold by the company “subject to a technology agreement”, meaning that replanting seeds grown from plants that came from the original seeds would be infringing the company’s patents.

The seeds could be sold however, and Bowman bought some and planted them, and in effect, because he had not signed a technology agreement, he was of the belief that Monsanto “could not allege that he violated its technology agreement”. However, Monsanto argued the prohibition imposed on the purchaser of the original seeds is applicable to all other users or buyers of said seeds, so Bowman is liable for patent infringement despite the fact he was not party to the original agreement.

The implications are that a manufacturer of a patented product could “include restrictive language” in documents to “prevent certain uses of the product” as well as to “limit or deny the right of all subsequent owners of the product to resell, repair or refurbish that product”. In turn, any patent holder “could effectively dictate […] how, when and where the product could be used and reused”.

The unanimous ruling, the Guardian added, saw nine justices agree, with Kagan noting that “patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder’s permission.

“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. We accordingly affirm the judgment of the Court of Appeals for the Federal Circuit”.

Monsanto responded to the ruling by claiming it would help shore up the US patent system, and encourage greater innovation, with its General Counsel David Snively noting: “The Court’s ruling today ensures that longstanding principles of patent law apply to breakthrough 21st century technologies that are central to meeting the growing demands of our planet and its people.

“The ruling also provides assurance to all inventors throughout the public and private sectors that they can and should continue to invest in innovation that feeds people, improves lives, creates jobs, and allows America to keep its competitive edge.”

What do you think about this latest decision in the USA? Do you think it will drastically affect remanufacturing there? Let us know in the comments below or contact news@therecycler.com

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2 responses to “US Supreme Court decides in favour of producer in important case”

  1. IanChai says:

    This case is very interesting as it seems to possibly affect the remanufacturing industry.
    However, in our industry we are re-using the original casing of cartridges but we (Cartridge World Slough) are not cloning them without permission nor infringing the design patents and copyrights.
    I doubt that this ruling will actually affect the remanufacturing industry as I see many similarities with the car servicing industry. We are in effect “repairing” or “servicing” cartridges that are not performing as expected anymore. We are using replacement parts to do this. Now does anybody see the car-servicing industry affected by this ruling? is there anybody that can imagine Toyota taking a garage in Miami to court because they repaired a car to their high standards?
    I don’t think so….
    But I would love to read your thoughts.

  2. enrique says:

    Totally agree with IanChai. The only possible implication would be if the toner cartridge is remanufactured with Soybean toner and the genetics of such product could be traced back to a particular patent holder.
    Sounds far fetched?. Well,considering that who wrote the article sees a possibility that a company like Monsanto could fight to apply “post-sale restrictions on the use of its patented products”, which would have a knock-on effect for all forms of remanufacturing, is also quite far fetched.

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