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.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of eBay. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.