The centuries-old common law rule against unreasonable restraints on alienation of property discourages limitations on the free exchange or transfer of property as a brake on the efficient allocation of resources. This principle underlies the common law rule against perpetuities, providing that interests must vest within 21 years of a life in being at the time of interest creation.
In the context of patent law, these principles are evident in the patent exhaustion doctrine. This doctrine provides that the first authorized sale of patented subject matter, such as a product, completely exhausts the patentee’s rights to control that subject matter, such as by influencing a subsequent use or sale. Recently, these well-settled principles of the common law have run smack into modern technology in the ongoing patent infringement battles being waged by Monsanto Co. against farmers and grain elevator operators concerning genetically modified organisms (GMOs) in agriculture, such as Roundup Ready crops. One of these patent disputes, Bowman v. Monsanto Co., has now reached the Supreme Court, with oral arguments scheduled for Feb. 19. The bulk of amicus briefs filed in the matter are by non-profit and public interest groups favoring Bowman; the U.S. Solicitor General has filed the only amicus brief favoring the respondent.
GMO plants self-replicate
Monsanto Co., as provider of the herbicide Roundup as well as the RR crop plants compatible with that herbicide, would appear to be well-positioned to profit from the need to control weeds in agriculture, but there is a problem. RR crop plants, like all living things, are capable of reproduction. If Monsanto sells its patented seeds to a farmer, the patent exhaustion doctrine would suggest that Monsanto’s interests were completely exhausted upon the sale of seeds. A farmer planting the purchased seeds could obtain seeds for subsequent crops from the plants being grown rather than returning to Monsanto. Moreover, the farmer could sell seeds from his crops, thereby competing with Monsanto. Realizing the potential predicament, Monsanto avoided the potentially crippling application of the patent exhaustion doctrine by alienating seed by license rather than unconditional sale.