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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.
