Monsanto Plows Under the Farmer ... Again

Buy a product that's patented or trademark-protected, and you're paying the company that made it for the rights surrounding it. But once you've paid for it, that's where the manufacturer's rights end. You can then turn around and do whatever you like with that product, including giving it away or selling it to someone else.

The concept is called "patent exhaustion", and it essentially says a seller's rights to a product end after the first sale. That's how sellers on eBay are able to sell all their used stuff in the world's biggest garage sale.

Seeds of dissent
Yet the Supreme Court just said that when it comes to Monsanto's (NYSE: MON  ) genetically modified seeds, farmers can't "blame the bean," in Justice Elena Kagan's words, and reuse its Roundup Ready soybean seeds.

Farmer Vernon Bowman had previously used and paid the seed giant for its seeds but had a riskier, late-season crop that he wanted cheaper seeds for. He went to a grain elevator and purchased seeds he thought probably would be Roundup Ready, which proved correct, and he replanted them over the course of eight years. Monsanto sued him for failing to pay them for the seeds and won in lower courts. Appealing all the way up to the Supreme Court, Bowman asserted the "patent exhaustion" theory and also said soybean seeds self-germinate, so he's using the progeny of Monsanto's patent and it shouldn't hold in perpetuity.

Unfortunately for farmers everywhere, Monsanto maintains its stranglehold on the industry. The court unanimously rejected his defense, instead siding with the seed company's argument -- and another legal theory -- that says you can't copy a patent. It rejected Bowman's contention that it was the seed doing the copying because it is self-replicating, which led to Kagan's commentary on holding the seed responsible.

Specifically, she said, "Patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder's permission."

The seed that wouldn't die
Roundup is Monsanto's herbicide that farmers often use to control weeds. Monsanto genetically modified the seeds it sells to be able to survive applications of the herbicide. More than 90% of the soybean crops planted have had their DNA altered (and 86% of the corn crop), according to the Center for Food Safety, and it goes on to note that Monsanto has filed 142 lawsuits against 466 farmers and small business farms, winning some $23 million from them so far. Just three companies -- Monsanto, DuPont (NYSE: DD  ) , and Syngenta (NYSE: SYT  ) -- control more than half the world's seed supply.

The implications of the decision are broad with tech, health care, and other industries watching this case and entering on the side of Monsanto. While the court said its decision was specific to this case only, many believe it establishes a level of protection elsewhere now, too. 

A monstrous outcome
And that's a dangerous precedent, because copying and pirating software is protecting a man-made thing, while this decision allows Monsanto to control the lifecycle and offspring of a living organism, putting us into a brave new world. Maybe we can't blame the seed, but we can blame the court for plowing under the American farmer. 

Individuals would do better to buy heirloom seeds that haven't been tainted by Monsanto's rewired genetic coding and plant their own gardens as a means of reducing their reliance on Frankenfoods.

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Read/Post Comments (20) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 15, 2013, at 10:08 AM, eyeknonothing wrote:

    BOYCOTT all seed companies that have anything to do with Monsanto. Here is a list of those that are Monsanto free: http://occupymonsanto360.org/2012/03/06/monsanto-free-seed-c...

  • Report this Comment On May 15, 2013, at 7:41 PM, funfundvierzig wrote:

    This inflammatory piece equivalent to throwing concentrated acid on Monsanto management and MON shareholders hardly deserves the MOTLEY FOOL rubric.

    ...funfun..

  • Report this Comment On May 15, 2013, at 10:14 PM, RobertLB1 wrote:

    If I was a farmer, I would only use heirloom seeds. Their yields are lower, but you save so much money on seed costs that it pays to use cheaper seeds. If Monsanto crops are in the area you receive the benefit of their pollination of your crops. After harvest you have all of your seeds ready for the following year, and there isn't a thing Monsanto can do or say to stop you. It would almost pay a farmer to do what big seed companies do in their test fields. They selected the best seed from plants before they stared engineering their seeds. Selecting the best seed out of a field would take extra work, but in the end it would produce much greater crop yields.

  • Report this Comment On May 15, 2013, at 11:08 PM, cdkeli wrote:

    The supreme court has established an unprecedented decided prejudice in favor of big business against individuals. Thanks to Chief Justice Roberts and his goon squad.

  • Report this Comment On May 15, 2013, at 11:34 PM, rocket7777 wrote:

    In some countries, Monsanto Sues people of NEXT farm that pollinated by their plants.

  • Report this Comment On May 16, 2013, at 12:59 AM, unwildbill wrote:

    Go organic!

  • Report this Comment On May 16, 2013, at 1:04 AM, nesraguy wrote:

    Monsanto is evil!

  • Report this Comment On May 16, 2013, at 2:26 AM, becluer wrote:

    MONSANTO = SATAN

    GOD BLESS AMERICA, AND THE SMALL AMERICAN FARMERS.

  • Report this Comment On May 16, 2013, at 2:28 AM, becluer wrote:

    I also think that Monsanto has a lot to do with the extermination of the bee population worldwide.

  • Report this Comment On May 16, 2013, at 5:28 AM, Packnotrouble wrote:

    to RobertLB1 - I confirm what Rocket says. In other countries Monsanto sues the farmer next door for using Monsanto seeds and forces him to pay for the use of it, even though it was through pollination.

  • Report this Comment On May 16, 2013, at 6:42 AM, jjtoo wrote:

    I find the comments of RobertLB1 excessively offensive to the majority of the US farmers. it implies that they have no clue about their profitability and waste their money on Monsanto's products, rather than doing the cost-effective and clever things that he is proposing, which, for unclear reasons, they have not considered.

    As a European, I give the US farmers a lot more credit for having common sense and a good understanding of their trade.

  • Report this Comment On May 16, 2013, at 7:50 AM, layman141 wrote:

    I certainly understand the disgust of Monsanto, but let's not forget their willing accomplice in all of this. The Federal government and its courts. Without them, this obscene protection would not exist.

  • Report this Comment On May 16, 2013, at 9:51 AM, fckohn wrote:

    This website is aptly named. A collection of ignorant fools who generally have no clue of the facts (my apologies to jjtoo).

    The merits of this case are based upon replicating inventions. The author apparently doesn't realize the trait that the patent covers combined with the plant are a man made product, without that man-made combination (in this case by Monsanto) the product wouldn't exist. Anybody (any farmer) can go and buy seed without the trait, grow it, keep seed, replant, etc. No farmer is forced to buy the Monsanto seed product that contains the trait, even Monsanto sells soybean and corn varieties without this trait. However, as the author so clearly states, more than 90% of soybean and 86% or corn planted contain these Monsanto traits. That is the farmer choosing to do this. Why? - because they like it! It makes growing crops easier, saves them time, makes more yield, makes them more money, reduces use of more dangerous herbicides, etc. etc.

  • Report this Comment On May 16, 2013, at 10:05 AM, warlockweds wrote:

    ff, I would say more akin to throwing concentrated Agent Orange on Monsanto and Mon Shareholders.

  • Report this Comment On May 16, 2013, at 10:38 AM, getthefacts2 wrote:

    Isn't Fool abouit investing and not activism and religion?

    Just to get the record straight:

    1. Monsanto today is not the Monsanto of Agent orange etc. That Monsanto is now techically Pfizer and the chem part is Solutia. 99% of people don't understand this.

    2. If my name was Bush I am not automatically related closely to George Bush the president.

    3. Of 100,000,000 growers Monsanto has sued 1 in a 10,000,000 in a year not exactly plowing them under. Only those that stole the technology - not anyone who accidentally got GM crop or seed. There has been zero suits against people who accidentally got GM seed etc.

    4. Theyt don't control food - they sell about 30% of corn and soy and coton seed in the US. The wast majority of food is from seed that is not produced by Monsanto. It is neck and neck with Dupont as the biggest seed co.

  • Report this Comment On May 16, 2013, at 10:42 AM, getthefacts2 wrote:

    They don't produce and sell food. Farmers do and a few other companies buy and sell grain - not Monsanto. Dupont sells almost the same amount of seed and gets zero complains.

    5. The activists get the public interested but are funded by the major organic industrial giants and one mulit million snake oil sales man Mercola who has been ordered by the FDA to stop misrepresenting one or more of his products.

    6. Here is my point 95% of what you hear about Monsanto posted on the web is incorrect and it appears Monsanto has realized it is pointless trying to fight it since you can't fight illogical things with logic

  • Report this Comment On May 16, 2013, at 11:04 AM, funfundvierzig wrote:

    getthefacts2,

    "Dupont sells almost the same amount of seed and gets zero complains (sic)."

    There is a good reason for that. DuPont Management has systematically deployed its own openly avowed employees as well as "masked operatives" over the net and elsewhere to smear and defame Monsanto's business.

    See the published letter of Aug. 17, 2009 letter by Monsanto Chief Hugh Grant to then DuPont Chief Chad Holliday calling for an investigation by DuPont's independent Directors into DuPont's unethical use of masked third party operatives to defame Monsanto's business.

    CHEAT-to-COMPETE is the ingrained corporate culture of the second biggest and second-rate outfit in the seed business, Delaware-based DuPont. ...funfun..

  • Report this Comment On May 16, 2013, at 11:08 AM, funfundvierzig wrote:

    Readers, who who may need proof of avowed DuPont AG employees smearing and vilifying Monsanto over the internet, need look no further than the Yahoo! Finance board for DuPont. Multitudinous examples appeared in the last four weeks alone.

    ...funfun..

  • Report this Comment On May 16, 2013, at 11:25 AM, funfundvierzig wrote:

    warlockweds, you created your identity today and this is your first post, a smear on Monsanto?

    Agent Orange has absolutely no connection to the Monsanto seed enterprise of the 21st century. Your 50-year old reference to a Vietnam War chemical is totally misplaced.

    Incidentally, DuPont's falsely, if not fraudulently marketed "very environmentally safe" dandelion herbicide for the lawn, DuPont Imprelis, is 4 X as toxic as Agent Orange. The toxicity of DuPont Imprelis has manifested itself in a huge swath of the United States with hundreds of thousands of dead mature trees. Imprelis has nourished the growth of tens of thousands of litigation claims in federal and state courts.

    Maybe MOTLEY FOOL reporter Rich Duprey might find more interesting and sympathetic victims in a narrative on what is the largest, most costly consumer product failure in 21st century corporate America. Imprelis, Tell Us! ...funfun..

  • Report this Comment On May 16, 2013, at 12:18 PM, getthefacts2 wrote:

    from a pure investment perspective :

    MON stock price 2003 = $8 today $108

    Growth rate 15-20% going forward

    So I think the fool needs to stay away from stock advice and join Greenpeace..............

    BTW would Greenpeace complain and sue if Monsanto started using their name ---you bet

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