AAI Argues in Favor of Patent Exhaustion in the Supreme Court (Bowman v. Monsanto Co., No. 11-796)

The AAI, joined by the National Farmers Union, Food & Water Watch, the Organization for Competitive Markets, and the National Family Farm Coalition, filed an amicus brief in the U.S. Supreme Court urging reversal of the Federal Circuit in Bowman v. Monsanto Co. The Federal Circuit held that the patent exhaustion doctrine does not apply to prevent Monsanto from controlling the post-sale use of self-replicating soybean seeds containing patented genetic technology because any use of such seeds that results in replication of the patented technology, including use to plant a soybean crop, infringes the patent holder’s exclusive right to “make” the patented technology. The brief asked the Court to defer to Congress rather than carve out exceptions to the patent exhaustion doctrine for self-replicating technologies and argued that use restraints after an exhausting sale of a product containing patented technology are more effectively governed by contract law rather than patent law. The brief emphasized that the patent exhaustion doctrine balances patent law and competition policy by creating a bright-line rule that prevents patent holders from controlling the downstream disposition of patented products after an authorized sale, thereby encouraging free, open and efficient secondary markets. Reliance on contract law to govern post-sale restrictions on the use of patented products preserves a critical role for antitrust review of downstream, patent-based trade restraints.

The brief was written by AAI Advisory Board Members Peter Carstensen and Shubha Ghosh and AAI Senior Counsel Randy Stutz, with assistance from AAI Vice President Diana Moss, Advisory Board Member David Balto, and law professors Mark Patterson (Fordham University School of Law), Daryl Lim (John Marshall Law School), and Hillary Greene (University of Connecticut School of Law).