Unclear stance on de minimis patent infringement and related legal conundrums in Organic Seed Growers & Trade Association et al. v Monsanto Company

by Li Linzhe

Intellectual property rights including copyright, trademark usage and patent are actively enforced by large corporations; some may have enforced it too actively. Monsanto Co., the world’s leading multinational chemical and agricultural biotechnology corporation, has brought 144 infringement suits for unauthorized use of its seeds between 1997 and 2010. Approximately 700 other cases were settled without litigation, as noted in the case of Organic Seed Growers & Trade Association v Monsanto Co1.

The case essentially involves a declaratory judgment action against 23 Monsanto patents covering transgenic seed products like corn, cotton, canola, sugar beets, soybeans and alfalfa. The plaintiff is a coalition of several dozen farmers, seed sellers and agricultural organizations2. They seek a court order to estop Monsanto from initiating legal actions to enforce its patent rights against those caught by inadvertent infringements which allegedly occur inevitably whenever wind drifts carry pollens of recombinant plants to non-genetically modified fields.

In the United States, the rights conferred by the patent grant is, in the language of Title 35 of the United States Code3, “the right to exclude others from making, using, offering for sale, or selling” the patented invention in the United States or “importing” the patented invention into the United States. The right is a positive right of exclusion against infringers regardless of whether the infringer is intentional or inadvertent which, as it turns out, opens a host of problems when it comes to patent enforcement.

It is beneficial at this stage to set out the background of the law and the case. The power of the Congress to grant patents is derived from Article I, Section 8, Clause 8 of the U.S. Constitution, which allows the Congress to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”. Patentable inventions are defined in sections 100-105 of Title 35 of the United States Code, which include inventions and discoveries of “any new and useful process, machines, manufacture, or composition of matter, or any new and useful improvement4. Monsanto’s Roundup Ready® glyphosate-resistant seeds (which are designed to be used together with glyphosate herbicide, Roundup®) contain recombinant herbicide-resistant genes isolated from Agrobacterium strain CP4 (CP4 EPSPS), making it a “new and useful improvement” within the definition of patentable inventions.

Plaintiffs in this case, who refused to use Monsanto’s genetically-modified seeds, alleged that they had suffered substantial injuries because they were put at risk for inadvertent infringements of Monsanto’s patents. For fear of being sued, they were forced to forego planting even conventional (non-genetically modified) “corn, cotton, canola, sugar beets, soybeans and Alfalfa” due to the extent to which these crops were transgenic (the judge accepted the evidence that “over 85-90% of all soybeans, corn, cotton, sugar beets, and canola grown in the U.S. contains Monsanto’s patented genes”). They also suffered from increasing financial burdens by having to take costly precautions to avoid contamination, such as testing seeds for transgenic traits and creating “buffer” zones between their farms and those of neighbours growing modified crops. It is their counsel’s argument that only by eliminating any risk of being sued for inadvertent as well as uncontrollable infringements would they dare resume to grow conventional crops which are under threat of severe transgenic contamination.

Plaintiffs assisted by Benjamin N. Cardozo School of Law’s Public Patent Foundation (PubPat) lost their case. The judgment delivered on 10th June 2013 held that “taken together, Monsanto’s representations5 unequivocally disclaim any intent to sue appellant growers, seed sellers, or organizations for inadvertently using or selling ‘trace amounts’ of genetically modified seeds”. The court also dismissed the action on the ground that Monsanto (through its representation) has disclaimed any intent to sue inadvertent users or sellers of seeds that are inadvertently contaminated with up to 1% of seeds carrying Monsanto’s patented traits. An express covenant not to sue as sought by the plaintiffs was also refused.

Federal Circuit considered the plaintiff’s argument that even though Monsanto has never threatened suit against them, in light of Monsanto’s evident history of aggressive assertion of its transgenic seed patents against other growers and sellers (144 suits and 700 settlements), they are entitled to assume that if they infringe those patents, they will also be sued—even if the infringement is inadvertent. However, the court held that this evidentiary history of aggressive patent enforcement alone did not suffice for declaratory judgment jurisdiction. “Allegations of a subjective ‘chill’ are not an adequate substitute for a claim of specific present objective harm or a threat of specific future harm”.

Further to the dismay of the coalition of farmers, the rule of de minimis non curat lex does not seem to offer any semblance of protection to fend off what many deem as harassing threats of litigation. Federal Circuit is reluctant to budge from its position in earlier precedents that “one who, within the meaning of the Patent Act, uses (replants) or sells even very small quantities of patented transgenic seeds without authorization may infringe any patents covering those seeds”, citing SmithKline Beecham Corp. v Apotex Corp. 6 and Abbott Labs. v Sandoz, Inc.7 In both cases, the court rejected the proposition that patent claims should be construed to avoid reading on “trace amounts” of a patented compound, even though that compound’s self-replicating properties might “place potential infringers in the untenable position of never knowing whether their product infringes because even a single undetectable [molecule would infringe (noting that de minimis infringement can still be infringement).

Hence, the practical effect of the decision is that intention does not constitute an element in patent infringement. Both intentional and inadvertent infringements are caught by the Act even though only “trace amounts” of patented materials were found in the fields of the farmers who refuse to use genetically-modified seeds. There is still a substantial risk that those farmers could be liable for infringement if they harvested and replanted or sold contaminated seed once the contaminated rate is beyond the threshold 1%. Taking the law to the extreme, merely permitting transgenic seeds inadvertently introduced into one’s land (by wind) to grow would constitute an infringing use if the threshold 1% is exceeded. Even though I tend to agree with Federal Circuit’s dismissal of plaintiff’s declaratory action on the ground that mere possibility of being sued does not suffice to allow them to claim damages caused by their own decisions to forebear from growing conventional crops with high transgenic content, I found the current legislation’s stance on “de minimis infringement” ambivalent and unsatisfactory. The 1% threshold is never expressly stated as a matter of law. As the court itself pointed out, United States Department of Agriculture has never established an upper limit on the amount of trace contamination that is permissible. It was the plaintiffs’ argument (which Monsanto did not contest and the Court refused to decide on the threshold) that “trace amounts” must mean approximately one percent (the level permitted under various seed and product certification standards).

Given that now intention no longer matters in a patent suit―inadvertent infringement is still an infringement―the law governing de minimis infringement should be all the more clearer. Farmers can no longer exert any control over possible contaminations caused by inevitable natural force. Moreover, given that no compensation is made to their increased expenditures on building “buffer zones” and testing for transgenic traits, it is only fair if the farmers can rely on a judicially fixed threshold below which they would be shielded from any threat of litigation, not as a private assurance between the parties, but as a policy across the board regarding patent issues involving transgenic crops.

It must not be overlooked that in reality, large corporations have a far stronger leverage against individual farmers and non-profit agricultural organisations not by threatening to sue but by threatening the mere prospect of litigation. As revealed in documentaries like Food Inc., it is an unannounced fact that Monsanto regularly sends private investigators to force inspections of farmers’ crops at ungodly hours and threatens them with the prospect of being sued, indirectly forcing many to switch to cultivate Monsanto’s genetically-modified seeds or to forego growing conventional crops altogether, even though they have been growing those crops on their acres for decades. Even in those settled cases, farmers are usually gravely prejudiced by corporations’ bargaining power. Not surprisingly, massive compensations for infringement apart, as a condition of the settlement, the farmers are banned from talking to the media about any of their encounters with the corporation including, invariably, the details regarding private investigations and threats.

As long as the law on “de minimis infringement” is foggy, Monsanto can and would continue its aggressive enforcement of its patents and its investigations which have put many on severe distress and others out of business. Emotional turmoil aside, those farmers’ livelihoods are at stake; either legislative or judicial protection must step up to give them redress.

Currently, the only silver lining of Organic Seed Growers & Trade Association v Monsanto Co. is that applicants can rely on a de facto judicial estoppel to fend off potential patent suits with contaminant level below 1%. As Federal Circuit points out in the obiter, while Monsanto’s representations are not an express covenant not to sue, they have a similar effect. Since the Court has relied on Monsanto’s representations to defeat the plaintiffs’ declaratory judgment claims, those representations are binding as a matter of judicial estoppel8.

Unfortunately, this protection is not available against de minimis infringements of other patents by other corporations if there is no prior action or similar representation by the corporation giving rise to judicial estoppel9. As a result, the chilling effect caused by the uncertainty of the law as well as its enforcement is likely to ensue.

[1] 718 F.3d 1350, 107 U.S.P.Q.2d 1067

[2] Plaintiff organisations include, inter alia, Organic Crop Improvement Association International Inc., Beyond Pesticides, Navdanya International, Maine Organic Farmers and Gardeners Association, Northeast Organic Farming Association of New York, Northeast Organic Farming Association/Massachusetts Chapter, Inc.

[3] 35 U.S.C. s 154 (a)(1)

[4] 35 U.S.C. s 101

[5] A statement posted on Monsanto’s website reads: it has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in farmer’s fields as a result of inadvertent means.

[6] 403 F.3d 1331, 1336, 1339–40 (Fed. Cir. 2005)

[7] 566 F.3d 1282, 1299 (Fed. Cir. 2009)

[8] It is well established that a party who successfully argues one position is estopped from later adopting a contrary position in a case involving the same patent, see New Hampshire v Maine, 532 U.S.

[9] The main factors warranting judicial estoppel are [1] a party’s later position is “clearly inconsistent” with its prior position, [2] the party successfully persuaded a court to accept its prior position, and [3] the party “would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.” (see New Hampshire v Maine, 532 U.S. at [750]–[751])