Farmers may face legal liability issues in agricultural biotechnology also in legal disputes involving intellectual property. More particularly, companies that create transgenic crops have intellectual property rights, usually patents, in those crops and take legal action against farmers who grow the transgenic crops without the companies' permission (Uchtmann, 2002b). However, one should not forget that seed companies also protect their patents in nontransgenic seeds and plants. Patent infringement cases in agriculture are not unique to transgenic seeds and plants (J.E.M. Ag. Supply, Inc. v. Pioneer Hi-Bred International, Inc., 2001).
As of May 2003, four cases for patent infringement regarding transgenic crops have resulted in written opinions by courts in Canada and the USA: Monsanto Canada Inc. v. Schmeiser (Monsanto Canada Inc., 2001); Monsanto Company v. Trantham (2001); Monsanto Company v. McFarling (2002) and Monsanto Company v. Swann (2003).
The Schmeiser Case
The Canadian courts found the following as factually true. Mr. Schmeiser sprayed three or four acres of his canola in 1997 with Roundup (Monsanto Corp., St. Louis) herbicide because he thought his canola field contained Roundup Ready canola. Sixty percent of the sprayed area survived the herbicide, thereby showing herbicide tolerance. Mr. Schmeiser separately harvested and stored the canola seed from the sprayed acres. In 1998, Mr. Schmeiser decided to use the canola from the sprayed acres as his seed canola for the 1998 crop. When Monsanto Canada pursued Mr. Schmeiser for these actions in a lawsuit, the grow-out and DNA tests of Schmeiser's 1998 crop showed 95 to 98% Roundup Ready (Monsanto Corp., St. Louis) canola from tests conducted by Monsanto, 95 to 98% Roundup Ready canola on the 1998 crop from a Canadian laboratory, 63 to 70% Roundup Ready canola from grow-out tests by Mr. Schmeiser himself on 1997 and 1998 crops; and 0% to 98% on various samples from the 1997 and 1998 crops submitted by Mr. Schmeiser to the University of Manitoba, with the 1997 saved seed specifically testing in the 95 to 98% range.
The Canadian courts held that Mr. Schmeiser infringed the Monsanto patents after consideration of two defenses. First, the courts ruled that the fact that Mr. Schmeiser did not use Roundup herbicide was irrelevant to the patent violation. The court stated that the Monsanto patent claims related to the gene and cells of the canola plants and this particular patent had nothing to do with the herbicide. In light of the patent relevant to this lawsuit, Mr. Schmeiser could only grow these patented seeds if he had permission to do so. Mr. Schmeiser admitted that he had not signed a technology use agreement with Monsanto. Second, the court ruled that regardless of the origin of the 1997 seeds—for example pollen drift, seed spills from bags, or wind-blown from truck beds, Mr. Schmeiser infringed the patent when he knew or should have known that he was planting Roundup Ready canola in 1998. The court rejected Mr. Schmeiser's claim as an innocent grower because his actions demonstrated that he was not innocent—i.e., he knew or should have known that he was growing patented seeds. The court left undecided whether Monsanto would have an infringement claim against a truly innocent grower.
The Trantham, Swann, and McFarling Cases
In these three U.S. cases, the farmers defended against Monsanto's infringement claims relating to saved seed by arguing that U.S. antitrust law blocked Monsanto from pursuing legal remedies against farmers who saved seed from one crop year to the next. The arguments can be conflated into three main points about the interplay between antitrust law and patent law.
First, the U.S. courts ruled that the patent law allows Monsanto to condition its permissive use of patented seeds through technology use agreements prohibiting the saving of seeds and authorizing the growing of seeds for one crop year only for commercial sale as a commodity crop. In other words, Monsanto does not create an illegal monopoly solely because Monsanto grants permission through technology use agreements that impose use restrictions.
Second, the courts held that the farmers were free to buy or not to buy Monsanto patented seeds each crop year. The courts stated that the fact that the farmers desired to use Monsanto's patented seeds in future years signified only superior performance of patented technology, not an illegal tying arrangement under antitrust law.
Finally, the courts held that Monsanto does not violate U.S. antitrust law on the basis of the fact that Monsanto markets its Roundup Ready seeds differently in the USA than in Argentina. The court noted that Monsanto is responding to different market circumstances in the USA, where patents on seeds exist, than in Argentina, where patents on seeds do not exist. Under U.S. law, Monsanto is entitled to enforce its U.S. patents.