NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the
Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal
errors, in order that corrections may be made before the
preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 11–796
_________________
VERNON HUGH BOWMAN, PETITIONER
v.
MONSANTO COMPANY et al.
on writ of certiorari to the united states
court of appeals for the federal circuit
[May 13, 2013]
Justice Kagan delivered the opinion of the
Court.
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.
I
Respondent Monsanto invented a genetic
modification that enables soybean plants to survive exposure to
glyphosate, the active ingredient in many herbicides (including
Monsanto’s own Roundup). Monsanto markets soybean seed
containing this altered genetic material as Roundup Ready seed.
Farmers planting that seed can use a glyphosate-based herbicide to
kill weeds without damaging their crops. Two patents issued to
Monsanto cover various aspects of its Roundup Ready technology,
including a seed in-corporating the genetic alteration. See Supp.
App. SA1–21 (U. S. Patent Nos. 5,352,605 and RE39,247E);
see also 657 F.3d 1341, 1343–1344 (CA Fed. 2011).
Monsanto sells, and allows other companies to
sell, Roundup Ready soybean seeds to growers who assent to a
special licensing agreement. See App. 27a. That agreement permits a
grower to plant the purchased seeds in one (and only one) season.
He can then consume the resulting crop or sell it as a commodity,
usually to a grain elevator or agricultural processor. See 657
F. 3d, at 1344–1345. But under the agreement, the farmer
may not save any of the harvested soybeans for replanting, nor may
he supply them to anyone else for that purpose. These restrictions
reflect the ease of producing new generations of Roundup Ready
seed. Because glyphosate resistance comes from the seed’s
genetic material, that trait is passed on from the planted seed to
the harvested soybeans: Indeed, a single Roundup Ready seed can
grow a plant containing dozens of genetically identical beans, each
of which, if replanted, can grow another such plant—and so on
and so on. See App. 100a. The agreement’s terms prevent the
farmer from co-opting that process to produce his own Roundup Ready
seeds, forcing him instead to buy from Monsanto each season.
Petitioner Vernon Bowman is a farmer in Indiana
who, it is fair to say, appreciates Roundup Ready soybean seed. He
purchased Roundup Ready each year, from a company affiliated with
Monsanto, for his first crop of the season. In accord with the
agreement just described, he used all of that seed for planting,
and sold his entire crop to a grain elevator (which typically would
resell it to an agricultural processor for human or animal
consumption).
Bowman, however, devised a less orthodox
approach for his second crop of each season. Because he thought
such late-season planting “risky,” he did not want to
pay the premium price that Monsanto charges for Roundup Ready seed.
Id., at 78a; see Brief for Petitioner 6. He therefore went
to a grain elevator; purchased “commodity soybeans”
intended for human or animal consumption; and planted them in his
fields.[
1] Those soybeans came
from prior harvests of other local farmers. And because most of
those farmers also used Roundup Ready seed, Bowman could anticipate
that many of the purchased soybeans would contain Monsanto’s
patented technology. When he applied a glyphosate-based herbicide
to his fields, he confirmed that this was so; a significant
proportion of the new plants survived the treatment, and produced
in their turn a new crop of soybeans with the Roundup Ready trait.
Bowman saved seed from that crop to use in his late-season planting
the next year—and then the next, and the next, until he had
harvested eight crops in that way. Each year, that is, he planted
saved seed from the year before (sometimes adding more soybeans
bought from the grain elevator), sprayed his fields with glyphosate
to kill weeds (and any non-resistant plants), and produced a new
crop of glyphosate-resistant—
i.e., Roundup
Ready—soybeans.
After discovering this practice, Monsanto sued
Bowman for infringing its patents on Roundup Ready seed. Bowman
raised patent exhaustion as a defense, arguing that Monsanto could
not control his use of the soybeans because they were the subject
of a prior authorized sale (from local farmers to the grain
elevator). The District Court rejected that argument, and awarded
damages to Monsanto of $84,456. The Federal Circuit affirmed. It
reasoned that patent exhaustion did not protect Bowman because he
had “created a newly infringing article.” 657
F. 3d, at 1348. The “right to use” a patented
article following an authorized sale, the court explained,
“does not include the right to construct an essentially new
article on the template of the original, for the right to make the
article remains with the patentee.”
Ibid. (brackets
and internal quotation marks omitted). Accordingly, Bowman could
not “ ‘replicate’ Monsanto’s patented
technology by planting it in the ground to create newly infringing
genetic material, seeds, and plants.”
Ibid.
We granted certiorari to consider the important
question of patent law raised in this case, 568 U. S. ___
(2012), and now affirm.
II
The doctrine of patent exhaustion limits a
patentee’s right to control what others can do with an
article embodying or containing an invention.[
2] Under the doctrine, “the initial
authorized sale of a patented item terminates all patent rights to
that item.”
Quanta Computer, Inc. v.
LG
Electronics, Inc.,
553 U.S.
617, 625 (2008). And by “exhaust[ing] the
[patentee’s] monopoly” in that item, the sale confers
on the purchaser, or any subsequent owner, “the right to use
[or] sell” the thing as he sees fit.
United States v.
Univis Lens Co.,
316 U.S.
241, 249–250 (1942). We have explained the basis for the
doctrine as follows: “[T]he purpose of the patent law is
fulfilled with respect to any particular article when the patentee
has received his reward . . . by the sale of the article”;
once that “purpose is realized the patent law affords no
basis for restraining the use and enjoyment of the thing
sold.”
Id., at 251.
Consistent with that rationale, the doctrine
restricts a patentee’s rights only as to the
“particular article” sold,
ibid.; it leaves
untouched the patentee’s ability to prevent a buyer from
making new copies of the patented item. “[T]he purchaser of
the [patented] machine . . . does not acquire any right to
construct another machine either for his own use or to be vended to
another.”
Mitchell v.
Hawley, 16 Wall. 544, 548
(1873); see
Wilbur-Ellis Co. v.
Kuther,
377 U.S.
422, 424 (1964) (holding that a purchaser’s
“reconstruction” of a patented machine “would
impinge on the patentee’s right
‘to exclude others
from making’ . . . the article” (quoting 35
U. S. C. §154 (1964 ed.))). Rather, “a second
creation” of the patented item “call[s] the monopoly,
conferred by the patent grant, into play for a second time.”
Aro Mfg. Co. v.
Convertible Top Replacement Co.,
365 U.S.
336, 346 (1961). That is because the patent holder has
“received his reward” only for the actual article sold,
and not for subsequent recreations of it.
Univis, 316
U. S., at 251. If the purchaser of that article could make and
sell endless copies, the patent would effectively protect the
invention for just a single sale. Bowman himself disputes none of
this analysis as a general matter: He forthrightly acknowledges the
“well settled” principle “that the exhaustion
doctrine does not extend to the right to ‘make’ a new
product.” Brief for Petitioner 37 (citing
Aro, 365
U. S., at 346).
Unfortunately for Bowman, that principle decides
this case against him. Under the patent exhaustion doctrine, Bowman
could resell the patented soybeans he purchased from the grain
elevator; so too he could consume the beans himself or feed them to
his animals. Monsanto, although the patent holder, would have no
business interfering in those uses of Roundup Ready beans. But the
exhaustion doctrine does not enable Bowman to make
additional patented soybeans without Monsanto’s
permission (either express or implied). And that is precisely what
Bowman did. He took the soybeans he purchased home; planted them in
his fields at the time he thought best; applied glyphosate to kill
weeds (as well as any soy plants lacking the Roundup Ready trait);
and finally harvested more (many more) beans than he started with.
That is how “to ‘make’ a new product,” to
use Bowman’s words, when the original product is a seed.
Brief for Petitioner 37; see Webster’s Third New
International Dictionary 1363 (1961) (“make” means
“cause to exist, occur, or appear,” or more
specifically, “plant and raise (a crop)”). Because
Bowman thus reproduced Monsanto’s patented invention, the
exhaustion doctrine does not protect him.[
3]
Were the matter otherwise, Monsanto’s
patent would provide scant benefit. After inventing the Roundup
Ready trait, Monsanto would, to be sure, “receiv[e] [its]
reward” for the first seeds it sells.
Univis, 316
U. S., at 251. But in short order, other seed companies could
reproduce the product and market it to growers, thus depriving
Mon-santo of its monopoly. And farmers themselves need only buy the
seed once, whether from Monsanto, a competitor, or (as here) a
grain elevator. The grower could multiply his initial purchase, and
then multiply that new creation,
ad infinitum—each
time profiting from the patented seed without compensating its
inventor. Bowman’s late-season plantings offer a prime
illustration. After buying beans for a single harvest, Bowman saved
enough seed each year to reduce or eliminate the need for
additional purchases. Monsanto still held its patent, but received
no gain from Bowman’s annual production and sale of Roundup
Ready soybeans. The exhaustion doctrine is limited to the
“particular item” sold to avoid just such a mismatch
between invention and reward.
Our holding today also follows from
J. E. M. Ag Supply, Inc. v.
Pioneer
Hi-Bred Int’l, Inc.,
534 U.S.
124 (2001). We considered there whether an inventor could get a
patent on a seed or plant, or only a certificate issued under the
Plant Variety Protection Act (PVPA), 7 U. S. C.
§2321
et seq. We decided a patent was available,
rejecting the claim that the PVPA implicitly repealed the Patent
Act’s coverage of seeds and plants. On our view, the two
statutes established different, but not conflicting schemes: The
requirements for getting a patent “are more stringent than
those for obtaining a PVP certificate, and the pro-tections
afforded” by a patent are correspondingly greater.
J. E. M., 534 U. S., at 142. Most notable
here, we explained that only a patent holder (not a certificate
holder) could prohibit “[a] farmer who legally purchases and
plants” a protected seed from saving harvested seed
“for replanting.”
Id., at 140; see
id.,
at 143 (noting that the Patent Act, unlike the PVPA, contains
“no exemptio[n]” for “saving seed”). That
statement is inconsistent with applying exhaustion to protect
conduct like Bowman’s. If a sale cut off the right to control
a patented seed’s progeny, then (contrary to
J. E. M.) the patentee could
not prevent
the buyer from saving harvested seed. Indeed, the patentee could
not stop the buyer from
selling such seed, which even a PVP
certificate owner (who, recall, is supposed to have fewer rights)
can usually accomplish. See 7 U. S. C. §§2541,
2543. Those limitations would turn upside-down the statutory scheme
J. E. M. described.
Bowman principally argues that exhaustion should
apply here because seeds are meant to be planted. The exhaustion
doctrine, he reminds us, typically prevents a patentee from
controlling the use of a patented product following an authorized
sale. And in planting Roundup Ready seeds, Bowman continues, he is
merely using them in the normal way farmers do. Bowman thus
concludes that allowing Monsanto to interfere with that use would
“creat[e] an impermissible exception to the exhaustion
doctrine” for patented seeds and other
“self-replicating technologies.” Brief for Petitioner
16.
But it is really Bowman who is asking for an
unprecedented exception—to what he concedes is the
“well settled” rule that “the exhaustion doctrine
does not extend to the right to ‘make’ a new
product.” See
supra, at 5. Reproducing a patented
article no doubt “uses” it after a fashion. But as
already explained, we have always drawn the boundaries of the
exhaustion doctrine to exclude that activity, so that the patentee
retains an undiminished right to prohibit others from making the
thing his patent protects. See,
e.g., Cotton-Tie Co. v.
Simmons,
106 U.S.
89, 93–94 (1882) (holding that a purchaser could not
“use” the buckle from a patented cotton-bale tie to
“make” a new tie). That is because, once again, if
simple copying were a protected use, a patent would plummet in
value after the first sale of the first item containing the
invention. The undiluted patent monopoly, it might be said, would
extend not for 20 years (as the Patent Act promises), but for only
one transaction. And that would result in less incentive for
innovation than Congress wanted. Hence our repeated insistence that
exhaustion applies only to the particular item sold, and not to
reproductions.
Nor do we think that rule will prevent farmers
from making appropriate use of the Roundup Ready seed they buy.
Bowman himself stands in a peculiarly poor position to assert such
a claim. As noted earlier, the commodity soybeans he purchased were
intended not for planting, but for consumption. See
supra,
at 2–3. Indeed, Bowman conceded in deposition testimony that
he knew of no other farmer who employed beans bought from a grain
elevator to grow a new crop. See App. 84a. So a non-replicating use
of the commodity beans at issue here was not just available, but
standard fare. And in the more ordinary case, when a farmer
purchases Roundup Ready seed
qua seed—that is, seed
intended to grow a crop—he will be able to plant it.
Monsanto, to be sure, conditions the farmer’s ability to
reproduce Roundup Ready; but it does not—could not
realistically—preclude all planting. No sane farmer, after
all, would buy the product without some ability to grow soybeans
from it. And so Monsanto, predictably enough, sells Roundup Ready
seed to farmers with a license to use it to make a crop. See
supra, at 2, 6, n. 3. Applying our usual rule in this
context therefore will allow farmers to benefit from Roundup Ready,
even as it rewards Monsanto for its innovation.
Still, Bowman has another seeds-are-special
argument: that soybeans naturally “self-replicate or
‘sprout’ unless stored in a controlled manner,”
and thus “it was the planted soybean, not Bowman”
himself, that made replicas of Monsanto’s patented invention.
Brief for Petitioner 42; see Tr. of Oral Arg. 14 (“[F]armers,
when they plant seeds, they don’t exercise any control . . .
over their crop” or “over the creative process”).
But we think that blame-the-bean defense tough to credit. Bowman
was not a passive observer of his soybeans’ multiplication;
or put another way, the seeds he purchased (miraculous though they
might be in other respects) did not spontaneously create eight
successive soybean crops. As we have explained,
supra at
2–3, Bowman devised and executed a novel way to harvest crops
from Roundup Ready seeds without paying the usual premium. He
purchased beans from a grain elevator anticipating that many would
be Roundup Ready; applied a glyphosate-based herbicide in a way
that culled any plants without the patented trait; and saved beans
from the rest for the next season. He then planted those Roundup
Ready beans at a chosen time; tended and treated them, including by
exploiting their patented glyphosate-resistance; and harvested many
more seeds, which he either marketed or saved to begin the next
cycle. In all this, the bean surely figured. But it was Bowman, and
not the bean, who controlled the reproduction (unto the eighth
generation) of Monsanto’s patented invention.
Our holding today is limited—addressing
the situa- tion 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. We
accordingly affirm the judgment of the Court of Appeals for the
Federal Circuit.
It is so ordered.
