Supreme Court Monsanto Decision - Farmers: Get Big or Get Out!

The Indiana farmer fighting Monsanto for the right to use seeds he bought from a third party lost his Supreme Court case.

In a unanimous decision, the high court sided with Monsanto Co. in a dispute with an Indiana farmer who sought to cut the planting cost of his soybean crop by relying on subsequent generations of Monsanto’s patented Roundup Ready soybean seed.

The case is about patents, and I have no sympathy for any farmer desiring to grow Monsanto FrankenFoods.    But the case has interesting aspects which may be instructive.  

The company developed a genetically-altered strain of seed that is resistant to the herbicide glyphosate. Monsanto sells the new seed under a licensing agreement with farmers that permits its use to grow one crop for sale or consumption.

So you see, there is patent law, and contract law.  Patent law says Monsanto “owns” the seed, and as the owner, Monsanto writes a contract, terms and conditions of sale. 

The company explicitly bars farmers from using the resulting crop to seed future cultivation. The 20-year patent is designed to ensure that Monsanto reaps the rewards of its invention and innovation, and to provide an incentive for more innovation.

OK, that is terms and conditions, the contract.  (Why anyone would repeat the nonsense about “rewards and incentives” I do not know, but that is journalism today.)  That may be fine in the contract, but the farmer bought the seeds in question from a legitimate 3rd party.  

But rather than pay the higher price for Monsanto’s seed, Mr. Bowman purchased soybeans from a grain elevator and used them to seed his second crop of the season.

So there is the problem.  He complied with the contract, and then formed a new one with a grain elevator operator.  A straight purchase and sale of the seeds, out of another channel of distribution.  This would be like buyer a John Wiley  Company Textbook that is $400 in USA in Thailand for $25.  The Supreme Court ruled well on this one, it is allowed.

But not in the Monsanto case. There was no contract with Monsanto at this point. The grain elevator operators stored the seeds to be used to make tofu or flour or soy ink or whatever.  But enterprising farmers figured the seeds could be used to grow crops.  They were right.  Grain elevators operators were selling product they owned.  There was no contract that said they could not.  Farmers were getting a deal.  That would be free trade. Capitalism cannot allow free trade.

“Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium,” Kagan wrote. “But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto’s patented invention.”

Note the biblical flourish by Kagan.  The implication that Bowman was some evil genius.  And note the product placement in the Supreme Court decision.  Nice work!   But to the point, no, Bowman was doing what countless farmers have been doing, and that is getting around a stupid law.  Bowman could not afford all of these cases, no doubt this case was representing countless farmers.  For Monsanto, Kagan had to devise and execute a ruling that paid off for Monsanto and Big Ag.

Kagan emphasized that the decision was limited and could not be extended to every patent lawsuit concerning a self-replicating product.

This ruling was for Monsanto only!  Don't expect similar results if your case comes up.

“We recognize that such inventions are becoming ever more prevalent, complex, and diverse,” she said. “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.”

“We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances,” Kagan wrote.

Here here, 9-0.  Monsanto gets its own special ruling.

Now, the real point of patent protection is if farmers work around stupid laws, they can be sued and judgements levied.  If the farmer refuses to pay the judgment, the courts will attache his property if he refuses to give up, he will be arrested  If he resists arrest, he will be met with necessary and sufficient force to gain compliance (at this point, he has lost all sympathy from the audience glued to their TV sets watching the nutter defend his farm.)

If he resists beyond what the police think they can handle (or by this point the FBI) he will be killed.  You see, patents are enforced ultimately by violence, and you and I pick up the bill for compliance for Monsanto.

So Monsanto takes out patents.  Monsanto also uses contract law (which is necessary and sufficient to the task of rewards and incentives).  But no where is Monsanto using marketing to advance its business.  It does not need to.  The economics of capitalism mean inevitably Monsanto and the banks will finish the task of mass collectivization of USA agriculture once articulated by Sec of Ag Earl Butts, “”The agriculture policy of the United States is get big or get out.”

That was 1972.  Monsanto has been a big winner in that policy, and small farmers the losers. The Supreme Court agrees with Monsanto.

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