Transfer Pricing Associates

Monsanto Case

post Thursday May 16, 2013

court case

The United States Supreme Court has recently set a trend of ruling against ambiguous or frivolous intellectual property or patent infringement cases. In a recent decision, the Supreme Court went against this trend.  The court ruled that an Indiana farmer has violated agribusiness giant Monsanto’s patent on genetically modified soybeans. The farmer was accused of ignoring the patents that Monsanto possessed on soybeans by combining his own soybeans with beans that Monsanto had modified.

The case has set a very important precedent in biotechnology and agribusiness. Vernon Hugh Bowman did not follow through with the contract that was in place for farmers to grow soybeans that had been modified. Bowman combined a round of crop that had been seeded by Monsanto beans and then non-genetically modified soybean crop. This combination led to a crop that had a similar genetic makeup to patented crops. Utilizing a small amount of the protected crops along with standard crops ultimately lead Bowman to violate his contract with Monsanto.

In the court’s opinion, the basis of the ruling is explained clearly "If simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention... that would result in less incentive for innovation than Congress wanted." If utilizing patented crops with standard seeds results in a decreased value of the patented product, it stands that not allowing this strategy will protect innovation.
This ruling benefits individuals who are seeking to innovate or bring cutting edge solutions to a variety of fields. The precedent of protecting self-replicating products, even if the product is being infringed upon by challengers who are violating it via third parties, will most likely encourage further creation of breakthrough technology. The Supreme Court’s ruling could potentially have negative effects for consumers and on the food market. Farmers will no longer be able to combine patented and unpatented products. There are still rulings that must be made, specifically on whether human genes can be patented, but it is clear that this ruling has laid the groundwork for the protection of certain types of genetically modified crops.

Source:USA Today
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