BRIEF OF AMICI CURIAE WISCONSIN ALUMNI RESEARCH FOUNDATION ET AL. IN SUPPORT OF AFFIRMING THE...

7/29/2019 BRIEF OF AMICI CURIAE WISCONSIN ALUMNI RESEARCH FOUNDATION ET AL. IN SUPPORT OF AFFIRMING THE FEDE

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No. 11-796

In TheSupreme Court of the United States_____________________

VERNON HUGH BOWMAN,

Petitioner,

v.MONSANTO COMPANY,ET AL.

Respondents.

_____________________

On Writ of Certiorari to the United States Court ofAppeals For the Federal Circuit_____________________

BRIEF OF AMICI CURIAE WISCONSIN ALUMNIRESEARCH FOUNDATION ET AL. IN SUPPORT OFAFFIRMING THE FEDERAL CIRCUIT_____________________

SCOTT P.MCBRIDECounsel of Record

STEPHEN M.WURTHCAROLINEA.TEICHNERMCANDREWS,HELD &MALLOY,LTD.500WEST MADISON STREET,SUITE 3400CHICAGO,ILLINOIS 60661(312)[email protected] for Amici Curiae

[AdditionalAmiciListed On Inside Cover]


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ASSOCIATION OF UNIVERSITY TECHNOLOGYMANAGERS, ASSOCIATION OF PUBLIC ANDLAND-GRANT UNIVERSITIES, ASSOCIATION OFAMERICAN UNIVERSITIES, THE REGENTS OF THEUNIVERSITY OF CALIFORNIA, THE BOARD OFTRUSTEES OF THE UNIVERSITY OF ILLINOIS,UNIVERSITY OF FLORIDA, DUKE UNIVERSITY,EMORY UNIVERSITY, UNIVERSITY OF GEORGIARESEARCH FOUNDATION, INC., IOWA STATEUNIVERSITY OF SCIENCE AND TECHNOLOGY,NDSU RESEARCH FOUNDATION, UNIVERSITY OFIOWA, UNIVERSITY OF MISSOURI-COLUMBIA,SOUTH DAKOTA STATE UNIVERSITY, NUTECHVENTURES, UNIVERSITY OF NEBRASKA-LINCOLN,UNIVERSITY OF KENTUCKY, UNIVERSITY OFKANSAS, KANSAS STATE UNIVERSITY, MONTANASTATE UNIVERSITY, AND UNIVERSITY OFDELAWARE


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TABLE OF CONTENTSTABLE OF AUTHORITIES .................................... iiiSTATEMENT OF INTEREST ................................... 1SUMMARY OF ARGUMENT ................................... 2BACKGROUND ........................................................ 5ARGUMENT ........................................................... 10I. REVERSING THE FEDERAL CIRCUITWOULD DEPRIVE THE PUBLIC OF THEIMPORTANT BENEFITS OF ARTIFICIAL,PROGENITIVE TECHNOLOGIES .............. 10

A. Reversal would greatly diminish, and

add uncertainty to, the value ofpatents covering artificial, progenitivetechnologies. ........................................ 10

B. Reversal would devalue the extensivebenefits achieved by the Bayh-DoleAct. ....................................................... 13

II. BOWMAN MADE NEW GENERATIONSOF INFRINGING SEEDS IN VIOLATIONOF 35 U.S.C. 271(a). ................................... 14A. Bowman impermissibly used patented

generation n+1seeds to makeinfringing generation n+2seeds. ........ 15

B. Exemptions for the infringement ofplant patents do not apply to theutility patents at issue here. ............... 20


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C. The Court can affirm the FederalCircuit without definitively construing

the term making. .............................. 23

III. THE COURT SHOULD NOT HUMORMISPLACED CONCERNS ABOUTINNOCENT INFRINGERS. ....................... 24A. Intent is irrelevant under the

exhaustion doctrine. ............................ 25

B. This case does not raise any uniqueinnocent infringement concerns....... 26

C. Bowman was not an innocentinfringer.............................................. 27

CONCLUSION ........................................................ 30


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iii

TABLE OF AUTHORITIESCasesAm. Cotton-Tie Co. v. Simmons,

106 U.S. 89 (1882) ........................................... 23, 24

Aro Mfg. Co. v. Convertible Top Replacement Co.,365 U.S. 336 (1961) ................................... 14, 15, 22

Asgrow Seed Co. v. Winterboer,513 U.S. 179 (1995) ............................................... 20

Bauer & Cie v. ODonnell,229 U.S. 1 (1913) ................................................... 16

Bd. of Trs. of Leland Stanford Junior Univ. v.

Roche Molecular Sys., Inc.,

131 S. Ct. 2188 (2011) ............................................. 5

Global-Tech Appliances, Inc. v. SEB S.A.,131 S. Ct. 2060 (2011) ........................................... 25

J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Intl,

Inc.,534 U.S. 124 (2001) ........................................... 8, 21

Jurgens v. CBK, Ltd.,80 F.3d 1566 (Fed. Cir. 1996) ............................... 25

Mitchell v. Hawley,83 U.S. (16 Wall.) 544 (1872) .......................... 20, 22

Monsanto Co. v. Bowman,

657 F.3d 1341 (Fed. Cir. 2011) ....................... 14, 16


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iv

Quanta Computer, Inc. v. LG Elecs., Inc.,553 U.S. 617 (2008) ............................................... 19

United States v. UnivisLens Co.,316 U.S. 241 (1942) ............................................... 20

Statutes35 U.S.C. 154(a)(1) ........................................... 15, 16

35 U.S.C. 154(a)(2) ................................................. 10

35 U.S.C. 200 ............................................................ 5

35 U.S.C. 271(a) ......................................... 15, 16, 26

7 U.S.C. 2543 .......................................................... 21

Other AuthoritiesAssn of Univ. Tech. Managers, U.S.Licensing

Activity Survey: FY2011 (2012) ......................... 8, 9

David Kappos, Remarks As Prepared, 30thAnniversary of the Bayh-Dole Act, uspto.gov(Dec. 9, 2010),

http://www.uspto.gov/news/speeches/2010/Kappos_Bayh_Dole_Act_Remarks.jsp ............................ 8

David Roessner et al., The Economic Impact ofLicensed Commercialized Inventions

Originating in University Research, 1996-2007,Biotechnology Indus. Org. (Sept. 3, 2009),http://www.bio.org/sites/default/files/BIO_final_

report_9_3_09_rev_2.pdf. ....................................... 8


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v

Doug Lederman, Research Spending, Before theCliff,Inside Higher Ed (Nov. 29, 2012, 3:00 AM),http://www.insidehighered.com/news/2012/11/29/spending-academic-research-rose-69-2011 ......... 6

Factbox: History of the mobile technology patent

war,Reuters (July 5, 2012, 8:05 AM),

http://www.reuters.com/article/2012/07/05/us-apple-google-patents-idUSBRE8640IX20120705 ................................... 26

H.R. Con. Res. 319, 109th Cong. (2006) ..................... 5

Monsanto's Commitment: Farmers and Patents,http://www.monsanto.com/newsviews/Pages/co

mmitment-farmers-patents.aspx (last visitedJan. 22, 2013) ........................................................ 27

Natl Science Bd., Science and EngineeringIndicators 2012(2012),http://nsf.gov/statistics/seind12/pdf/seind12.pdf ... 6

Recent Development, Columbia, Co-

transformation, Commercialization &Controversy The Axel Patent Litigation,17 Harv. J.L. & Tech. 583 (2004) ........................... 7

Risa L. Lieberwitz, Faculty In The CorporateUniversity: Professional Identity, Law And

Collective Action, 16 Cornell J.L. & Pub. Poly263 (2007) ................................................................ 7

Wendy H. Schacht, The Bayh-Dole Act: SelectedIssues in Patent Policy and the


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Commercialization of Technology,Congressional Research Service (2012) ................. 6


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1STATEMENT OF INTEREST

This brief is submitted by amici to urge thisCourt to affirm the decision of the Federal Circuitbelow.1

Amiciare universities, entities affiliated withuniversities, the nations higher educationassociations, and entities involved in university

technology management. Amici, amicismembers, oramicis employers engage in and support scientificresearch, obtain patents on inventions arising fromthat research, license the technologies to privatesector companies for commercialization and then useportions of licensing royalties to underwrite furtheracademic research and education.

The non-profit research community carries outmuch of its research under the University and SmallBusiness Patent Procedures Act, commonly known asthe Bayh-Dole Act. The issues raised in this case areof interest to the university and non-profit researchcommunity because of the negative impact reversalwould have on the technology transfer functionpracticed primarily under the auspices of the Bayh-Dole Act by some 300 such entities, including amici.

1Counsel for all parties have consented to the filing of amicusbriefs, seeSupreme Court Rule 37.3(a), and copies of the lettersof general consent have been filed with the Clerk. Pursuant toSupreme Court Rule 37.6, amici state that this brief was notauthored, in whole or in part, by counsel to a party, and that nomonetary contribution to the preparation or submission of thisbrief was made by any person or entity other than amici ortheir counsel.


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2SUMMARY OF ARGUMENT

Technology transfer organizations workingunder the auspices of the Bayh-Dole Act (the Act)have been successful in bringing numerous beneficialtechnologies to the public. By enabling researchinstitutions to seek patent protection for federallyfunded inventions, the Act has led to a substantialincrease in public disclosure and availability of these

inventions. Technology transfer licensing has alsocreated jobs and positively impacted the domesticeconomy.

The technology transfer framework hasfacilitated the development of numerous artificial,progenitive technologies that benefit the public.Such technologies are human-made and involve a

parent combination, substance, or manufacturethat can be used to generate progeny having thesame genetic makeup or characteristics as theparent. These technologies positively impact areassuch as cancer research, agricultural crop protection,and nutritional science.

Reversing the Federal Circuit would impairtechnology transfer operations and ultimately denythe public the benefits of existing and yet-unknownartificial, progenitive technologies. The first buyersof artificial, progenitive technology could make anunlimited number of identical copies of the inventionwithout having to compensate the patentee for thosesubsequent copies. In a short period of time, the

market for the technology would become saturatedwith copies. The patent owner and its licenseeswould effectively lose the right to exclude others from


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3practicing the patented technology over the fullstatutory term of the patentwhich is afundamental right conferred by the patent system.This would devalue existing patents directed toartificial, progenitive technologies and remove anyincentive for private sector entities to license anddevelop future technologies of this kind. Ultimately,the public may never benefit from such inventions.

To ensure that the public continues to benefitfrom research brought to market under thetechnology transfer framework, this Court shouldaffirm the Federal Circuits holding that Bowmaninfringed Monsantos patents by making new seedsunder 35 U.S.C. 271(a). Here, although Bowmanwas authorized to use the seeds that he purchasedfrom an authorized seed dealer once for planting, he

was not authorized to plant subsequent generationsof seeds for the purpose of making even moregenerations of seeds containing the patented trait.The language of the Plant Variety Protection Act(PVPA)which does not apply in this caseunderscores the legitimacy of the concept that seedscan be used to make subsequent generations of

seeds.

Under its exhaustion jurisprudence, this Courthas always recognized a distinction betweenpermissible and impermissible uses. Inparticular, even authorized purchasers of a patentedarticle cannot use that article to make additionalcopies of the same. This distinction is most apparent

in the Courts repair/reconstruction cases. The Courtneed not determine the outer bounds of the term


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4making as used in the patent statute to affirm theFederal Circuit. Under any definition, Bowmancertainly made infringing seeds in this case, eventhough he grew them rather than geneticallyengineering them from starting materials.

Finally, concerns about innocentinfringement have no place here. The Court hasnever considered intent to be a relevant factor in its

exhaustion jurisprudence. Furthermore, this casepresents nothing more than the same innocentinfringement concerns as any other patentinfringement case, owing to the strict liability natureof this offense. Crucially, Bowman was not aninnocent infringer. He devised a calculated schemeto buy and plant commodity seeds withoutcompensating Monsanto for its patented invention,

knowing that the seeds likely contained the patentedtrait.


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5BACKGROUND

Technology transfer and the Bayh-Dole Act promote

development of new technology.

The Bayh-Dole Act (the Act), see 35 U.S.C. 200212, and technology transfer organizationshelp many technologies invented with support fromfederal funding reach the public. Before the Act was

passed in 1980, inventions that arose from federallyfunded research were owned by the federalgovernment, and only 5 percent of patents owned bythe Federal Government were used by the privatesector[such] that . . . the American people [were]denied the benefits of further development,disclosure, exploitation, and commercialization of theGovernments patent portfolio. H.R. Con. Res. 319,

109th Cong. (2006). There was no uniform statutoryauthority for federal agencies to grant exclusivelicenses for their patents. Indeed, more than 25different patent licensing policies existed amongvarious federal agencies. As a result, efforts tocommercialize patents held by the federalgovernment were frequently unsuccessful and thepublic did not benefit from access to these inventions.

Congress passed the Act in response to thisproblem. The Act promotes utilization of the patentsystem and collaboration between researchinstitutions and private sector entities to carry newtechnology from conception to commercialization.See 35 U.S.C. 200; see also Bd. of Trs. of Leland

Stanford Junior Univ. v. Roche Molecular Sys., Inc.,131 S. Ct. 2188, 219293, 2201 (2011). Numerousinstitutions have established technology transfer


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6offices to facilitate collaboration with privateentities.2

This collaboration typically begins with thefederal government providing funding to researchinstitutions, such as universities, to supportexploration of new and promising technology.3 Theinstitutions technology transfer office secures patentprotection for the newly-conceived technology. The

technology transfer office then seeks a private sectorlicensing partner, such as a faculty start-up companyor an established corporation, to help develop thenew technology into a commercial product for publicuse.

2 These technology transfer offices were established without anyindependent appropriations from the federal government. SeeWendy H. Schacht, The Bayh-Dole Act: Selected Issues inPatent Policy and the Commercialization of Technology,Congressional Research Service 24 (2012).

3 The academic sector drives research and innovation in theUnited States. In 2009, academic institutions performed overhalf (53%) of all basic research in the United States, 36% of allU.S. research (basic and applied) and 14% of total U.S. researchand development. See Natl Science Bd., Science andEngineering Indicators 2012 5-4 (2012),http://nsf.gov/statistics/seind12/pdf/seind12.pdf. In 2011,universities spent $65.1 billion for research. See DougLederman, Research Spending, Before the Cliff , Inside HigherEd (Nov. 29, 2012, 3:00 AM), http://www.insidehighered.com/news/2012/11/29/spending-academic-research-rose-69-2011. Nearly two-thirds of all money spent by912 academic institutions surveyed by the National ScienceFoundation came from the federal government. See id. Thenext-highest portion came from the institutions themselves($12.4 billion). See id. More than half of these expenditureswere in life sciences ($37.2 billion, or 57%). See id.


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The partnership between research institutionsand private sector entities plays a critical role in thisprocess. The expertise of private sector entities inproduct development, market testing, andcommercialization is essential to ensure that the newtechnology reaches the public in a beneficial form.However, these steps can be quite costly. Indeed,[s]tudies have shown that for every dollar of

government-sponsored research, up to $10,000 isrequired to fully develop, commercialize, and realizea useful product. Recent Development, Columbia,Co-transformation, Commercialization &

Controversy The Axel Patent Litigation, 17 Harv.J.L. & Tech. 583, 608 (2004). Private sector entitieswill incur these costs only if they are properlyincented to do so. Patents, and the valuable

exclusionary rights they confer, provide thenecessary incentive.

Empirical evidence demonstrates that the Bayh-Dole

Act greatly benefits the public.

Before the Act was passed in 1980,

universities rarely acquired patent protection forinventions created as a result of federally fundedresearch. In 1979, U.S. universities obtained only264 patents. SeeRisa L. Lieberwitz, Faculty In TheCorporate University: Professional Identity, Law

And Collective Action, 16 Cornell J.L. & Pub. Poly263, 301 n.134 (2007). But from 2002-2011,university researchers submitted more than 185,000

invention disclosures, resulting in more than 163,000patent applications and more than 37,000 issued


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8patents. SeeAssn of Univ. Tech. Managers, U.S.Licensing Activity Survey: FY2011 21, 23 (2012)(AUTM Survey). Because public disclosure is partof the quid pro quo of obtaining a patent, seeJ.E.M.Ag Supply, Inc. v. Pioneer Hi-Bred Intl, Inc., 534U.S. 124, 142 (2001) (internal quotation marksomitted), this increase in patenting activity results inpublic disclosure of federally funded inventions.

Significantly, product sales of licensedtechnologies from [technology transfer offices] have asubstantial impact on the U.S. economy. AUTMSurvey at 39. The Act has ushered in [an]unprecedented era of commercializing inventionsdeveloped on university campuses which has spurredjob creation, new products in the marketplace andinvestment in new companies. David Kappos,Remarks As Prepared, 30th Anniversary of theBayh-Dole Act, uspto.gov (Dec. 9, 2010),http://www.uspto.gov/news/speeches/2010/Kappos_Bayh_Dole_Act_Remarks.jsp. From 19962007, it isestimated that university licensing contributed $187billion to the U.S. gross domestic product and asmuch as $457 billion to U.S. gross industrial output,

in addition to creating 279,000 new jobs. SeeDavidRoessner et al., The Economic Impact of LicensedCommercialized Inventions Originating in

University Research, 1996-2007, BiotechnologyIndus. Org. 32, 34 (Sept. 3, 2009),http://www.bio.org/sites/default/files/BIO_final_report_9_3_09_rev_2.pdf. Importantly, technologytransfer offices also support the creation of new

businesses, as they are showing an increasedwillingness to take equity as payment in licenses,


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9particularly with startups . . . . AUTM Survey at37. From 20072011, more than 3,000 startupcompanies were formed as a result of researchperformed under the Bayh-Dole Act. See id.

Significant artificial, progenitive technology has been

discovered and developed under the Bayh-Dole Act.

Numerous artificial, progenitive technologies

have been conceived, developed, and licensed underthe technology transfer framework discussed above.Artificial, progenitive technology is a broadclassification that includes any human-madetechnology in which a parent combination,substance, or manufacture is used to generateprogeny having the same genetic makeup orcharacteristics as the parent. The progeny may then

be used for the same purposes as the parent. Onetype of artificial, progenitive technology is at issue inthis casegenetically modified soybeans.

Other artificial, progenitive technologies mayinclude stem cells, mutant genes, DNA vectors andmolecules, viral vectors, bacterial strains, RNA

enzymes, cell lines, and organic computers. Existingpatents directed to such technologies include thefollowing: soybeans that minimize the need forhydrogenation when making vegetable oil (U.S.Patent No. 6,133,509); production of lactic acid foruse in the manufacture of biodegradable plastic (U.S.Patent No. 7,629,162); stem cell cultures useful toidentify genes related to disease and to test new

therapies for treating, inter alia, degenerativeneurological disorders (U.S. Patent No. 5,843,780);


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10cell lines for use in developing new treatments forcancer (U.S. Patent No. 5,989,837); geneticallymodified laboratory rats for use in developing newtreatments for colon cancer (U.S. Patent No.7,897,834); viral vectors for inoculating citrus treesagainst disease (U.S. Patent Application Pub. No.2010/0017911); and fusarium-resistant wheat toavoid blight and increase yield (U.S. Patent No.7,652,204).

These exemplary inventions are but a smallsampling of the numerous technologies developedand licensed under Bayh-Dole that have significantpublic value. In the coming years, artificial,progenitive technologies promise to positively impactmany aspects of Americans lives. Reversal herewould undermine those positive impacts.

ARGUMENTI. REVERSING THE FEDERAL CIRCUITWOULD DEPRIVE THE PUBLIC OF THEIMPORTANT BENEFITS OF ARTIFICIAL,PROGENITIVE TECHNOLOGIES

A. Reversal would greatly diminish, andadd uncertainty to, the value of patentscovering artificial, progenitivetechnologies.Patent owners generally have the entire

statutory patent termcurrently set at 20 yearsfrom filing under 35 U.S.C. 154(a)(2)over whichto recover their research and development costs.Reversal here would effectively shorten the patent


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11term for patents covering artificial, progenitivetechnologies, thus making it much more difficult, ifnot impossible, for patent owners and their licenseesto recover the costs of developing such inventions formarket. This would reduce, or even eliminate, anyincentive to develop new artificial, progenitivetechnologies. The public would certainly be harmedunder that scenario.

For artificial, progenitive technologies,reversal would force patent owners to try to recoupall of their research and development costs in thefirst sale of the technology. That is because the firstbuyers could sell progeny (and the progeny ofprogeny, etc.) at a fraction of the cost of the patentowners price, for they have insignificant researchand development costs to recover. In effect, first

buyers could saturate the market for the technology.For instance, in this case, a buyer of RoundupReady seeds could parlay a single bag of seeds(approximately 3,500) into over two million seeds ina single year (assuming two consecutive plantingsand harvestings per year, as Bowman did, to arriveat 3,500 x 26 x 26). SeeJ.A. 100a. That same buyer

could have over 1.5 billion seeds by the end of twoyears (2.3M x 26 x 26).

And even if every buyer that annuallypurchases Roundup Ready soybean seed hadpurchased seed in year one of the patent, reversalwould mean that a company like Monsanto wouldlose sales in all subsequent years of the patent. Each

buyer could effectively create their ownmanufacturing mill. To recoup its research and


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12development costs, Monsanto would have to increasedramatically the price of its Roundup Readysoybean seeds to a level unaffordable to farmers. Inturn, the public would not benefit from Monsantosinvention. SeeBr. of Economists at 2430.

If Bowman were to prevail, the market forRoundup Ready soybean seeds (and similarartificial, progenitive products) would become

saturated with progeny of generation nseed at lowerprices,4 sold by entities unburdened by research anddevelopment costs to recoup. Such a system of weakintellectual property protection would encourage arace-to-the-bottom, where technologies are knockedoff with little or no recourse against copyists. Tocompete in such a system, companies would haveincentive to use potentially inferior methods or

constituent parts to save costs, rather thaninnovating further to design around the patentedtechnology. For artificial, progenitive technology, thepolicies underlying the patent system would besignificantly undermined.

The practical result of such a system would be

to create disparate patent termsa shorter term forartificial progenitive technologies and a longer termfor all other inventions. For the former, patenteesand their licensees would receive protection only for

4Generation n is used herein to refer to the generation sold bythe commercial manufacturer. The nomenclature n is usedinstead of first because in many cases, the item sold to thepublic will be the progeny of a first generation (or the progenyof progeny, etc.) that was discovered or created by the inventoror commercial manufacturer.


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13as long as it takes first buyers to saturate the marketwith progeny. For the latter, patentees and theirlicensees would receive protection for the fullstatutory patent term.

The relative certainty of the patent systemprovides the currency for technology transfer anddrives the effective operation of the Bayh-Dole Act.A ruling for Bowman would therefore inject

uncertainty into the value of patents for artificial,progenitive technology. It would hinder collaborationbetween technology transfer offices and privatesector entities to develop and commercialize suchtechnology.

B. Reversal would devalue the extensivebenefits achieved by the Bayh-Dole Act.Beyond the specific impact to the value of

patents covering artificial, progenitive technologies,reversal would palpably and negatively impactwhether certain technologies ever make it to marketto benefit the public. Reversal would fatally damagethe risk-reward equation in patent law vis--visartificial, progenitive technologies. The patentsystem is designed to reward inventors with a time-limited right to exclude, so they will share theirinventions for the public good. For the higher-riskartificial, progenitive technologies where investmentdid occur, the risk to companies would be greater,and the reward would need to be higher to incentcompanies to license nascent technologies from

universities. When the risk becomes too great,private sector entities may not take licenses at all.


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14The resulting domino effect would undermine

the stated purposes of the Bayh-Dole Act and thesuccess of the technology transfer system discussedabove. Private sector entities would avoid licensingtechnology that is not protected by strong patentrights. Consequently, these entities would notdevelop useful products from this technology for thepublic benefit. The Bayh-Dole Act was designed toencourage public access to federally funded

inventions through the use of the patent system andcollaboration between research institutions andprivate sector entities. Reversing the Federal Circuitwould undermine this fundamental objective ofCongress. To ensure the ongoing success of Bayh-Dole and the technology transfer system, this Courtshould affirm the Federal Circuits holding thatBowman infringed Monsantos patents by making

new seeds.

II. BOWMAN MADE NEW GENERATIONSOF INFRINGING SEEDS IN VIOLATION OF35 U.S.C. 271(a).Even authorized purchasers of a patented

article cannot make a second creation of thepatented entity. Aro Mfg. Co. v. Convertible TopReplacement Co., 365 U.S. 336, 346 (1961) (Aro I).Here, the Federal Circuit correctly held thatBowman created a newly infringing article byplant[ing] the commodity seeds containingMonsantos Roundup Ready technology, thusproducing (i.e., making) subsequent generations of

patented seeds. Monsanto Co. v. Bowman, 657 F.3d1341, 1348 (Fed. Cir. 2011). Accordingly, even ifMonsantos patent rights in any later generation


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15seeds had been exhausted, Monsanto couldnevertheless call [its] monopoly, conferred by thepatent grant, into play for a second time onceBowman made the newly infringing seeds. Aro I, 365U.S. at 346. The Federal Circuits holding that,under the Patent Act, the term make encompassesBowmans act of planting patented seeds to createsubsequent generations of patented seeds is not onlylogically sound, but also comports with this Courts

long-standing precedent.

A. Bowman impermissibly used patentedgeneration n+1 seeds to make infringinggeneration n+2 seeds.A patent confers the right to exclude others

from making [or] using . . . the invention throughout

the United States . . . . 35 U.S.C. 154(a)(1). Directpatent infringement occurs when one makes [or]uses . . . any patented invention, within the UnitedStates, without authorization from the patentee. 35U.S.C. 271(a). Although 271(a) identifiesmaking and using a patented invention as twoacts constituting infringement, there is nothingproblematic with the notion that one can infringe apatent by simultaneously using the patented articleto make another, later generation of that samepatented article.

For instance, imagine a patented machine thatcan be used to perform several functions, one ofwhich is creating a copy of itself. To run the

machine, the operator must simply press a buttoncorresponding to the desired function. Supposefurther that functions A and B result in the creation


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16of products A and B, respectively, which are bothunpatented goods. By pressing the button to activatefunction A or B, the operator clearly uses thepatented machine in the sense envisioned by 154(a)(1) and 271(a). See Bauer & Cie v.ODonnell, 229 U.S. 1, 1011 (1913) (The right touse . . . embraces within its meaning the right to putinto service any given invention.). Now supposethat function C results in the creation of product C,

which is another machine that is a replica of thepatented machine, and thus covered by the patent.By pressing the button to activate function C, theoperator not only uses the patented machine, butalso makesanother, later generation of the patentedmachine. See id. at 10 (The right to make canscarcely be made plainer by definition, and embracesthe construction of the thing invented.). This

constitutes a simultaneous use and making of twopatented articles.

This case is analogous. Like the multi-functional hypothetical machine, the commodityseeds containing Monsantos Roundup Readytechnology can be used to perform several different

functions. For instance, functions A and B involveusing the seeds for animal feed or humanconsumption, neither of which results in the creationof new seeds. Function C, however, involves usingthe seeds for planting and results in the creation ofnew seeds that carry the genetic makeup of theplanted seed. See Monsanto, 657 F.3d at 1348([N]othing in the record indicates that the only

reasonable and intended use of commodity seeds isfor replanting them to create new seeds. Indeed,


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17there are various uses for commodity seeds,including use as feed.) (internal citation omitted).

Bowman used the original seeds (generationn) that he purchased from an authorized dealer ofMonsanto. Through planting, germination andgrowing of the soybean crop, those original seedswere spent. The genetic material of the originalseeds, however, was carried into the subsequent

generation (generation n+1). There is no disputethat Bowman was permitted to usethe generation nseeds to make generation n+1 seeds. Thatpermission may have been express (i.e., under theTechnology Agreement), or implied (i.e., under theexhaustion doctrine) because one of the patentsidentified in the Technology Agreement claims amethod of using generation n seeds to make

generation n+1 seeds. See Supp. J.A. 1516 (claim32).

Bowman sold the generation n+1seeds that hewas authorized to make to a grain elevator operator.Bowman then purchased commodity seeds from thatgrain elevator operator with the intention of planting

the commodity seeds later in the same year (i.e., inhis second planting). Bowman hoped that thecommodity seeds would contain generation n+1seedsthat he and other farmers had made in their singleauthorized planting of Roundup Ready seed.

Bowmans hope was not mere surmise. Giventhat as of 2002, 83% of soybean farmers in Indiana

purchased Roundup Ready seed (94% as of 2007),Bowman reasonably expected that his purchased


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18commodity seed would contain the patentedtechnology. SeeJ.A. 34a, 121a (It [had] occurred to[Bowman] that most of the farmers in his area wereprobably planting Roundup Ready soybeans.).Bowman confirmed his expectations when he appliedRoundup to his second planting. See J.A. 83a.Such application would be fatal to any soybean cropthat did not contain the patented technology. Almostall of Bowmans soybean plants survived.

Importantly, the crop that did survive uniformlycontained the patented technology, and thuscomprised generation n+2 of the patentedtechnology. Because Bowman was authorized only tomake generation n+1 seeds, his act of makinggeneration n+2seeds constituted infringement.

Year after year, he repeated these steps, with

a slight modification. Bowman retained (i.e.,saved) some of the infringing seeds made from hissecond planting of the year (generation n+2 inyear 1) to plant as part of his second planting thefollowing year. Bowman sold the remaining seedsback to the grain elevator operator. Bowman therebyintroduced generation n+2and later generations into

the commodity seed pool. Each year, Bowmanssecond planting included saved seeds from theprevious year (n+2 or later) along with the newly-purchased commodity seeds (n+1 or later) to makeyet further generations of patented seeds. See J.A.76a.

Bowman could have stopped making seed at

generation n+1. He could have put his owngeneration n+1seeds or the generation n+1seeds he


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19purchased from the grain elevator operator to manyuses. But Bowman was neither expressly norimpliedly permitted to make anything beyondgeneration n+1seeds. Thus, Bowman could not usegeneration n+1commodity seeds to makegenerationn+2 seeds. Because the generation n+2 seeds wereidentical to Monsantos patented seeds, theyconstituted newly infringing articles. The UnitedStates agrees that Bowmans use of the commodity

seeds for planting simultaneously implicatedMonsantos exclusive right to make additionalpatented seeds. SeeBr. for United States at 23.

While there are differences between thehypothetical machine described above and thecommodity seeds planted by Bowman, thosedifferences only reinforce that Bowman both used

and made patented seeds. First, unlike thehypothetical machine above, which was used to makea single copy of itself, every generation of seedsplanted by Bowman replicated twenty-six-foldthatis, for every one seed he planted, Bowman grew 26more of the same. See J.A. 100a. Employing apatented article, which has never been sold by the

patent owner, to replicate the very same article inthis manner, cannot fairly be held to be use apartfrom making. Among other things, it is not even ause of the article (i.e., the generation nseed) thatwas purchased by Bowman. And the exhaustiondoctrine has always been analyzed on an article-by-article basis. See, e.g., Quanta Computer, Inc. v. LGElecs., Inc., 553 U.S. 617, 625 (2008) (The

longstanding doctrine of patent exhaustion providesthat the initial authorized sale of a patented item


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20terminates all patent rights to that item.); UnitedStates v. UnivisLens Co., 316 U.S. 241, 249 (1942)(discussing exhaustion of patent monopoly asapplying only with respect to the article sold);Mitchell v. Hawley, 83 U.S. (16 Wall.) 544, 547(1872) (asserting that, following an authorized sale, apatentee ceases to have any interest whatever in thepatented machine so sold and delivered).

Second, to activate the replicating function ofthe hypothetical machine, the operator merely had topush a button. Bowman, on the other hand,expended significantly more effort in making thegeneration n+2seeds. Not only did he have to plantthe generation n+1seeds, but he also had to treat hiscrops with glyphosate-based herbicide (ensuring allremaining progeny was patented), irrigate his crops,

harvest the new seeds, and so on. SeeBr. for UnitedStates at 26. Bowmans actions constituted amaking of patented seed within the meaning of thePatent Act.

B. Exemptions for the infringement ofplant patents do not apply to the utilitypatents at issue here.

Utility patents have existed in the UnitedStates since 1790. In enacting the Plant VarietyProtection Act of 1970 (PVPA), Congressauthorized an additional avenue for the issuance ofpatent-like protection for sexually-reproducingplants (i.e., plants that reproduce by seed). See

Asgrow Seed Co. v. Winterboer, 513 U.S. 179, 181(1995). Since at least 1985, soybeans like Monsantoscould be covered by either utility patents under Title


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2135 or plant variety protection under Title 7. SeeJ.E.M. Ag Supply, 534 U.S. at 131 (It has been theunbroken practice of the [Patent Office] since [1985]to confer utility patents for plants.); see also id. at144 (The plain meaning of [35 U.S.C.] 101, asinterpreted by this Court in Chakrabarty [(1980)],clearly includes plants within its subject matter.).The exemptions to infringement under the PVPA (forsaving seed and research under 7 U.S.C. 2543 and

2544) apply only to plant variety certificates issuedunder Title 7. But Monsanto chose utility patents(under Title 35) for its soybean technology.Therefore, the PVPA exemptions do not apply here.

Nevertheless, those exemptions furtherdemonstrate that the Federal Circuits holding wascorrect. In passing the PVPA, Congress recognized

the use-to-make cycle that characterizes seed andcrop production. Specifically, the PVPAs seed-saving exemption to patent infringement provides inrelevant part that:

[I]t shall not infringe any righthereunder for a person to save seed

produced by the person from seedobtained, or descended from seedobtained, by authority of the owner ofthe variety for seeding purposes and usesuch saved seed in the production of a

crop for use on the farm of the person,or for sale as provided in this section.

7 U.S.C. 2543 (emphasis added). Although thisprovision speaks of production instead of making,


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22it nonetheless conveys the concept that seeds areused to create crops. In the case of soybeans likeMonsantos, the seed and the crop are the same, suchthat seeds are used to create more seeds that aregenetically identical. Thus, the PVPAs languageunderscores the legitimacy of the use-to-maketheory, particularly as applied to soybeans.

Bowman argues, mistakenly, that this use-

to-make theory seeks to carve out permissible andimpermissible uses under patent law for articlessubject to the exhaustion doctrine, and enjoys nosupport in the Patent Act or in this Courtsexhaustion law. Petrs Br. at 3839 (emphasis inoriginal). Bowman overlooks that the Courtsexhaustion jurisprudence has always distinguished,at least implicitly, between permissible and

impermissible uses of a patented article. Under theexhaustion doctrine, an authorized purchaser of apatented invention may use the invention withoutliability, but is never allowed to makethe inventionanew. See Mitchell, 83 U.S. (16 Wall.) at 548 ([T]hepurchaser of the implement or machine for thepurpose of using it in the ordinary pursuits of

life . . . does not acquire any right to constructanother machine . . . .). It follows that exhaustionapplies only to those uses of the patented inventionthat do not involve making a copy of the invention.This distinction is clearest in therepair/reconstruction cases: repairing the originalarticle is a permissible use while reconstructing theinvention using the spent, original article is not,

because the latter use also involves making theinvention anew. See Aro I, 365 U.S. at 604


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23([R]econstruction of a patented entity . . . is limitedto such a true reconstruction of the entity as to infact make a new article . . . . (internal citationomitted)); see alsoAm. Cotton-Tie Co. v. Simmons,106 U.S. 89, 9495 (1882) (finding impermissiblereconstruction where defendants usedparts of spent,patented cotton ties to makenewly infringing cottonties). Therefore, the Court should simply apply itslong-standing precedent to hold that, in this case,

Bowman impermissibly used the patentedcommodity seeds to make new infringing seeds.

C. The Court can affirm the FederalCircuit without definitively construingthe term making.Bowman submits several reasons why his

planting activities did not constitute makingpatented seeds, and further attacks the definitions ofto make proffered by the United States. But thereis no need in this case to definitively construe theterms making and makes as codified in 35 U.S.C. 154(a)(1) and 271(a), respectively. At most, theCourt need only decide that the Federal Circuitcorrectly held that Bowmans act of using generationn+1seeds to create generation n+2seeds constitutedinfringement, i.e., an infringing making, whateverthat term means as used in the Patent Act.

Bowman and his supporting amicierroneouslysuggest that the only way to make the patentedseeds as envisioned by 271(a) is to genetically

engineer them using the techniques disclosed inMonsantos patents. See Pet. at 19; Br. for AmiciCuriae Ctr. for Food Safety et al. at 3438. They


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24assert that making does not encompass growingidentical copies of the patented seeds from previousgenerations of seeds. See id. There is, however, nosupport in this Courts precedent for the notion thatmaking an infringing article necessarily involvesbuilding that article from its starting materials orbuilding blocks. For instance, over a century ago inAmerican Cotton-Tie, the Court held that thedefendants impermissibly reconstructed (and thus

made) patented cotton ties, even though in doingso, the defendants re-used metal buckles alreadyfashioned by the patent owner, rather than forgingnew buckles themselves. See 106 U.S. at 94 (As atie the defendants reconstructed it, although theyused the old buckle without repairing that.). Thus,it cannot be that under 271(a), making a patentedarticle requires engineering it from square one.

Genetic modification is one way to make RoundupReady seeds, but not the only way.

III. THE COURT SHOULD NOT HUMORMISPLACED CONCERNS ABOUTINNOCENT INFRINGERS.Bowmans supporting amici stress that

affirmance will render innocent infringersvulnerable to liability for inadvertently plantingMonsantos Roundup Ready seeds and therebymaking new infringing seeds. See, e.g., Br. of Pub.Patent Found. at 3 (The Circuits finding thatplanting seeds is making them for purposes ofinfringement makes a patent infringer out of any

organic or conventional farmer whose land iscontaminated with Monsantos genetically modifiedseed.); Br. ofAmicus CuriaeKnowledge Ecology Intl


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25at 1011; Br. forAmici CuriaeCtr. for Food Safety etal. at 38. Such concerns have no place in this matter.The Court has never considered intent to be arelevant consideration in its exhaustionjurisprudence, this case presents no unique issuesregarding innocent infringement, and in any event,Bowman is not an innocent infringer.

A. Intent is irrelevant under theexhaustion doctrine.

Courts faced with exhaustion questionsgenerally must decide whether the patenteeexhausted his rights in a patented article and/orwhether a purchaser of that article infringed thepatent. In assessing the purchasers liability forinfringement, courts do not consider his intent,

culpability or motivation because infringement is astrict liability offense. Jurgens v. CBK, Ltd., 80 F.3d1566, 1570 n.2 (Fed. Cir. 1996).5 The purchasersmental state also has no bearing on whether thepatentee exhausted his rights. In sum, the intent ofthe accused infringer plays no role in the exhaustionanalysis. Indeed, this Courts exhaustionjurisprudence has never turned on the accusedinfringers intent. The Court should not now changeits course by considering the impact of its exhaustiondecision on innocent infringers down the line.

5 For patent infringement issues, courts consider intent only todetermine whether there was indirect infringement, see, e.g.,Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2065(2011), and whether an accused infringer acted willfully,thereby entitling the patentee to increased damages. SeeJurgens, 80 F.3d at157071.


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26B. This case does not raise any uniqueinnocent infringement concerns.People unknowingly infringe patents every

day. For example, imagine that a cellular-phonemanufacturer makes and sells cellular phones thatinfringe anothers patent. By using one suchinfringing cellular phone, the user becomes aninfringer, whether the user knows it or not. See35

U.S.C. 271(a) ([W]hoever withoutauthority . . . uses . . . any patented invention, withinthe United States . . . infringes the patent.). Thecellular-phone users in this example areindistinguishable from the innocently infringingfarmers that Bowmans supporting amiciso zealouslyseek to protect. Yet, despite the abundance ofcellular-phone-related patents being asserted in U.S.

courts, see, e.g., Factbox: History of the mobiletechnology patent war, Reuters (July 5, 2012, 8:05AM), http://www.reuters.com/article/2012/07/05/us-apple-google-patents-idUSBRE8640IX20120705(Mobile technology has been a hotbed of patentlitigation in recent years . . . .), no innocentinfringement problems exist. By affirming, theCourt will in no way open the door to somepreviously unknown form of liability for inadvertentinfringers. Innocent infringement is a naturalbyproduct of a strict liability patent system.

Furthermore, patent holders like Monsantohave no incentive to litigate against truly innocentinfringers. The cost of doing so would dwarf the

value of available remedies. Indeed, Monsantocurrently adheres to a policy of not exercis[ing] itspatent rights where trace amounts of [its] patented


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28seeds with glyphosate-based herbicide, deliberatelykilling any plants germinated from unpatented seed:

I decided that I would go and get them[the commodity seeds] and then checkthem out and see if Glyphosate orRoundup would kill them and enough ofthem lived that I decided that ofcourse I knew after the first initial

purchase and I knew what everythingleft after I sprayed them and whatsleft I knew they were resistant toRoundup.

J.A. 83a. When asked if he hoped the commodityseeds he bought were Roundup Ready seeds,Bowman replied, I certainly didnt object, so if I

didnt object, then I guess I had the hope that theywere Roundup [Ready]. J.A. 84a. Indeed, prior tobuying seeds back from the grain elevator operator,[it had] occurred to [Bowman] that most of thefarmers in his area were probably planting RoundupReady soybeans, J.A. 121a, such that substantiallyall of the commodity seeds in the grain elevator

would possess the patented trait. Bowman alsoadmitted to knowing that the first-generationRoundup Ready seeds were patented and subject tocertain limitations:

I just bought commodity beans and Iwanted to know if they were Roundupor non-Roundup and since they were

resistant to Roundup, why I kept themand used them because I didnt consider


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29them as a patented product. I knew Icouldnt keep a patented product and Iagreed not to keep my beans that Ipurchased.

J.A. 77a78a.

Significantly, Bowmans method of buyingcommodity seeds from the grain elevator for planting

was neither common practice among farmers, norlegal. See, e.g., Br. of Am. Soybean Assn et al. at 25.Bowman did not know of any other farmers engagedin the practice of planting commodity seeds, and heunderstood that Indiana law prohibited the grainelevator from selling him commodity seeds forplanting. SeeJ.A. 84a85a. Bowman could not saywhether [he] told [the grain elevator] or not of his

intention to plant the commodity seeds. J.A. 77a.Bowman simply assumed the grain elevatoroperator knew that Bowman was planting thecommodity seeds because the operator knew[Bowman] didnt have any hogs to feed and he knew[Bowman] couldnt eat that many. Id. Andalthough Bowman told Monsanto, in 1999, that he

planned to save seed (a plan he abandoned afterMonsanto objected), seeJ.A. 21a, there is no evidencethat Bowman told Monsanto of his subsequent,illegal plans for the commodity seed beforeimplementing those plans.

Bowman thus methodically and strategicallybought commodity seeds from the grain elevator for

planting, hoping that a large percentage wouldcontain the Roundup Ready trait. He selectively


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30propagated only those seeds containing the patentedtrait by treating his crops with glyphosate-basedherbicide. Given the high percentage of farmers inBowmans area who used the Roundup Readyseeds, the odds were in Bowmans favor that thecommodity seeds he purchased would contain thepatented trait. Further, each time he completed thisprocess, planted his saved seed and brought hisharvested seed to the grain elevator, Bowman

ensured that an ever-increasing percentage of thecommodity seeds in the grain elevator would containthe patented trait. Bowman apparently knewexactlywhat he was doing in planting the commodityseeds, and had a particular goal in mindto obtainthe benefits of Monsantos patented seeds withoutcompensating Monsanto. Bowman was not aninnocent infringer.

CONCLUSIONReversal in this case would weaken patent

rights for artificial, progenitive technologies andupset the flourishing innovation system created byU.S. patent law through the Bayh-Dole Act andtechnology transfer organizations. Amici thereforeurge this Court to affirm the judgment of the FederalCircuit to ensure that the public will continue tobenefit from the important work of amici,particularly in the area of artificial, progenitivetechnologies.

Respectfully submitted,

SCOTT P.MCBRIDECounsel of Record


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31STEPHEN M.WURTHCAROLINEA.TEICHNERMCANDREWS,HELD &MALLOY,LTD.500WEST MADISON STREET,SUITE 3400CHICAGO,ILLINOIS 60661(312)[email protected] for Amici Curiae

Wisconsin Alumni Research

Foundation, Association of UniversityTechnology Managers, Association of

Public and Land-grant Universities,

Association of American Universities,

The Regents of the University of

California, The Board of Trustees of the

University of Illinois, University of

Florida, Duke University, Emory

University, University of GeorgiaResearch Foundation, Inc., Iowa State

University of Science and Technology,

NDSU Research Foundation, University

of Iowa, University of Missouri-

Columbia, South Dakota State

University, NUtech Ventures,

University of Nebraska-Lincoln,University of Kentucky, University of

Kansas, Kansas State University,

Montana State University, and

University of Delaware

January 23, 2013

BRIEF OF AMICI CURIAE WISCONSIN ALUMNI RESEARCH FOUNDATION ET AL. IN SUPPORT OF AFFIRMING THE...

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