The farmer, Vernan Bowman, bought official Monsanto seeds and planted his crops. Yet, Monsanto has rules that say you can't re-use "Roundup Ready" seeds, but you can apparently sell "second-generation" seeds to grain elevators for use as "commodity seeds," and doesn't require that there be any restriction on the sale. Bowman later bought a bunch of such "commodity seeds," which included some Roundup Ready seeds, and some that weren't. Bowman was able to determine which of the plants came from Roundup Ready seeds... and then saved those seeds for replanting. Monsanto claimed this was infringement, even though the seeds were legally sold to the grain elevator and then from the elevator to Bowman without restrictions. On top of that, while Bowman had signed an agreement for his original seeds, he did not with this batch (and, indeed, even Monsanto admits he didn't break the user agreement -- just patent infringement for using the seeds).

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... Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium.

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.

Our holding today is limited—addressing the situation 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. ... (“[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.

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A new report from the ETC Group, which describes itself as working "to address the socioeconomic and ecological issues surrounding new technologies that could have an impact on the world's poorest and most vulnerable people", offers an interesting view of how the big agribusiness companies are trying to do that (pdf).

Making its position quite clear, ETC calls the approach "philanthrogopoly" -- a "charity" cartel that is designed to assuage fears that they represent an anticompetitive oligopoly, while simultaneously ensuring that real control remains with the agribusiness companies even after key patents have expired:

The Gene Giants know their market dominance looks conspicuously like an anticompetitive oligopoly, so they’re launching a series of initiatives -- including the false promise of cheap, post-patent GE seeds -- to mollify antitrust regulators and soften opposition to transgenics while advancing their collective market control.

One thing that the Accord will not lead to is a flood of low-cost seeds produced by generics companies, as has already happened in the world of pharma, with huge knock-on benefits for the world's poor. For that to happen, the key safety testing data held by the agribusiness giants would need to be available. And despite the reasonableness of requiring companies to do that -- after all, if they want people to eat their products, they should be prepared to release the scientific evidence it is safe to do so -- that's not likely to happen unless they are forced to by governments.

Another factor making it extremely unlikely that we will see many seed generics is the dense web of patents that now envelope GE varieties, as ETC explains:

In the words of Randy Schlatter, DuPont Pioneer's senior manager of intellectual property: "What growers may not realize is that even though the trait patent expires, there are a host of other intellectual property patents on those varieties that are just as strong." In an interview with DTN/Progressive Farmer, Schlatter observed: "If there is a [first generation genetically engineered] soybean in the market today that is truly generic and not protected by a patent of some sort, I've not been able to find it." DuPont Pioneer, the world's second biggest seed company, has more than 225 patents covering its portfolio of soybean seeds -- not just on transgenic traits -- but on breeding technologies, germplasm and conventional ("native") traits. Even if a single transgenic trait goes off patent, the maize or soybean variety that contains the trait is likely the subject of a complex web of intellectual property. The two dozen patents on biotech seed traits that will expire over the next decade are dwarfed by the thousands of existing patents on traits, seeds and varieties

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The farmer, Vernan Bowman, bought official Monsanto seeds and planted his crops. Yet, Monsanto has rules that say you can't re-use "Roundup Ready" seeds, but you can apparently sell "second-generation" seeds to grain elevators for use as "commodity seeds," and doesn't require that there be any restriction on the sale. Bowman later bought a bunch of such "commodity seeds," which included some Roundup Ready seeds, and some that weren't. Bowman was able to determine which of the plants came from Roundup Ready seeds... and then saved those seeds for replanting. Monsanto claimed this was infringement, even though the seeds were legally sold to the grain elevator and then from the elevator to Bowman without restrictions. On top of that, while Bowman had signed an agreement for his original seeds, he did not with this batch (and, indeed, even Monsanto admits he didn't break the user agreement -- just patent infringement for using the seeds).

The damages theory was interesting. Since the accused product was not yet on the market, Monsanto did not seek any lost profit. Rather, Monsanto demanded a reasonable royalty for the research-use made by the defendants. Monsanto argued that the use of Monsanto's invention in DuPont's labs and Pioneer's test fields gave those companies an "improper head start" in making the GM seeds. The judge and jury agreed – if those companies wanted to build upon the invention then they should have first obtained a license. In the pharmaceutical world, 35 U.S.C. § 271(e) offers a research exemption for this type of activity. However, that exception does not apply here because of the low level of regulation over genetically modified food-products. The patent is set to expire in 2014. The patentee's right-to-exclusive-research supported by this case means that the 2014 date offers a starting-date for follow-on competitive research. Any actual products building directly upon the patented invention will arrive on the market sometime later.

A recent news story in Nature sketches the twists and turns of that fascinating tale. For example, how the growing of GM soybeans was only legalized in 2005 when it turned out that three-quarters of the crops growing in the southern state of Rio Grande do Sul were already using Monsanto's GM soybeans. Apparently, these had been smuggled in from Argentina. Monsanto claims that many soybeans still are, and uses this as a justification to impose an unusual levy on Brazilian soybean farmers:

Since the legalization, Monsanto has charged Brazilian farmers 2% of their sales of Roundup Ready soya beans, which now account for an estimated 85% of the nation’s soya-bean crop. The company also tests Brazilian soya beans that are sold as non-GM -- if they turn out to be Roundup Ready, the company charges the farmers responsible for the crops some 3% of their sales.

Brazil is now the world's second-largest producer of GM crops (after the US), and most of them are soybeans, so this levy resulted in huge additional profits for the company down the years -- and much resentment from the farmers. This led to a legal challenge being mounted in 2009 by a consortium of farming syndicates in the Rio Grande do Sul state. Earlier this year, this was successful, not least because the key patents had expired:

Giovanni Conti, a judge in Rio Grande do Sul, decided that Monsanto's levy was illegal, noting that the patents relating to Roundup Ready soya beans have already expired in Brazil. He ordered Monsanto to stop collecting royalties, and return those collected since 2004 -- or pay back a minimum of US$2 billion.

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Patent exhaustion does not bar an infringement action. Even if Monsanto’s patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like Bowman, plants the commodity seeds containing Monsanto’s Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article.

As the breeders keep tinkering, South Asia is bracing for impact. The CDL recently tried to get its hands on a suspicious P. graminis sample from Pakistan that is said to knock out Sr31. But the country is reluctant to share: "Some countries regard isolates of their pathogens as part of their genetic heritage," CDL director Marty Carson says. "I guess there's a fear that we'll patent something off of it."