SW Legal studies in Business

License May Restrict Continued Use of Patented Goods Sold
Description

Court held that a farmer who planted seeds that he grew from patented seeds that he purchased under a license that stated that there may be no such use, violated the patent. He would be enjoined from such practices in the future in violation of the sale license agreement.

Topic Intellectual Property
Key Words

Patent; Infringement; Exhaustion Doctrine; Genetically Modified Soybean

C A S E   S U M M A R Y
Facts

Bowman bought Montanto genetically modified soybean seeds to grow. The seeds are patented. When the seeds are bought, the license agreed to by the user states that they will be for a single planting only and the farmer agrees not to save any crop produced from this seed for replanting. Bowman saved some of his crop for use in planting next year. Monsanto sued for patent infringement due to unauthorized planting of the seeds saved from a crop. Bowman defended that the doctrine of patent exhaustion applied. He claimed that once the seeds have been sold, Monsanto cannot restrict what happens later. Monsanto moved for summary judgment.

Decision

Motion granted. The first sale patent right exhaustion doctrine does not apply. The seeds were properly licensed as to method of use; that was a part of the agreement for sale. Bowman agreed not to save seeds by the terms of the license that applied to the patented good. The fact that Bowman may have acted in good faith, believing he had the right to use seeds, does not affect the outcome. A permanent injunction would be imposed against Bowman to prevent him from making, using, selling or offering to sell any of the patented technologies.

Citation Monsanto Co. v. Bowman, ---F.Supp.2d--- (2009 WL 3242103, S.D. Indiana, 2009)

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