Showing posts with label Obama administration. Show all posts
Showing posts with label Obama administration. Show all posts

Saturday, May 18, 2013

IP Rights Take Precedent over Nature – Courtesy of the US Supreme Court

Mr. Bowman, a 74-year-old soybean farmer, bought soybean seed from a local grain elevator that was contaminated with the patented seed. He used those seeds in good faith to produce soy beans on his 299 acres of farmland.

Bowman began purchasing Monsanto’s patented seeds in 1999 and, because of the licensing agreement, did not save any of the seed for future planting. But he also bought so-called “commodity” seed from a local grain elevator, which acts as a clearinghouse for farmers to buy and sell seed.

The elevator’s seed was contaminated with Monsanto’s patented seed since more than 90 percent of the soybeans planted in the area were Roundup Ready crops. Mr. Bowman planted that commodity seed which was substantially cheaper to purchase. He produced a second, late-season crop, which is generally more risky and has lower yield.

He also used seeds generated in one late-season harvest to help produce subsequent late-season crops.

According to Monsanto, the farmer should have known that the seed was Monsanto’s IP since the seeds were resistant to herbicides.

Monsanto promptly sued the farmer for patent infringement which case Mr. Bowman (quite correctly) won. The farmer’s lawyer argued that “this issue affects every farmer in the country and the method of planting that farmers such as Mr. Bowman have used for generations.”

Monsanto appealed to the Supreme Court to get its pound of flesh. Mr. Bowman argued that the Supreme Court should analyze whether the law allows patent holders to “continue to assert patent rights after an authorized sale.”

The case therefore centered on the question how far down the stream of commerce (e.g., the farming cycle) is a company such as Monsanto allowed to enforce its patents. This is even more poignant since soybeans can easily self-replicate.

A lower court, an appeals court, the Barack Obama administration and the Supreme Court all claim that the stream is virtually endless.

The US Supreme Court has for the first time backed patents for a self-replicating technology. It ruled in favor of Monsanto’s “Roundup Ready” soybeans, along with its licensing agreement that allows farmers to use them only once.

This licensing agreement with forbids farmers to resell the seeds for commercial planting, and those seeds can also not be used for research, crop breeding or seed production.

The ruling is a clear sign of how patented, genetically modified organisms get legitimacy. The Supreme Court ruling was unanimous. It ruled IP rights take precedent over nature – go figure!

In this case, the court ruled against an Indiana soybean farmer. A lower court ruled in favor of the Monsanto and ordered the farmer to pay $84,456 in damages and costs to Monsanto in 2009 for infringing its soybean patents.

Justice Elena Kagan explained: “If simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years as the Patent Act promises, but for only one transaction. And that would result in less incentive for innovation than Congress wanted.”

According to Kagan, “were the matter otherwise, Monsanto’s patent would provide scant benefit.” As a fellow lawyer, I can only say: So what? Not every patent is enforceable, let alone profitable!

The Obama administration instructed the Supreme Court that its justices should not concern themselves with the eventuality that such rigid patent protectionism could undermine traditional farming techniques. The administration went on to point out that Congress “is better equipped than this court” to handle these issues. Is the government not blatantly interfering with the justice system? A slippery slope indeed!

Monsanto informed the Supreme Court that if it would rule in favor of the soybean farmer, it would doom its business model.

In my lawyer’s opinion, this decision is bad, really bad. Farmers who buy seed in good faith should be able to use them to use them to produce food for all of us. Monsanto might have scored a commercial victory, but on the marketing and PR front – the company lost big time!

Tuesday, November 09, 2010

Do AV Software providers have an anti-trust case against Microsoft?

Many anti-virus software companies are upset with Microsoft (MSFT). The Redmond-based behemoth recently distributed AV software through a Windows' update service. Starting 11/1, Microsoft began offering Security Essentials to PCs running Windows XP, Vista and Windows 7 that lacked antivirus software.

Trend Micro questioned Microsoft's decision to offer its Windows users free Security Essentials software through the operating system's patching and program update services. Trend Micro’s Carol Carpenter commented: "We're concerned that Microsoft may be using its OS-based market leverage to box out other choices. If that were to happen, it would not be good for consumers or the industry. "Commercializing Windows Update to distribute other software applications raises significant questions about unfair competition."

Panda Security was also quite verbal about Microsoft’s AV download. Luis Corrons, the director of Panda's research lab, lamented: "If [Microsoft's] objective is truly to protect users from malware, then why doesn't Microsoft allow [Security Essentials] to install in pirated copies of Windows? He went on to claim: "Microsoft should make a serious development effort to secure the OS from the ground up, and not limit the security tools currently available to its users." Sour grapes, anyone?

From a legal standpoint, does Trend Micro cum suis have a case against Microsoft? According to Hillard Sterling, a partner with the Chicago-based law firm of Freeborn & Peters, not really. "It would be a long shot at best. It would be difficult if not impossible to show any anticompetitive impact." In other words, they don’t have a (legal) leg to stand on.

Since the Microsoft download is optional, it does not form any barrier to competitors. As we all know (free) security products are available from a multitude of channels e.g., from websites offering free downloads, such as AVG and tucows or from media websites such as CNET.

Furthermore, Microsoft does not prevent other companies from getting their products onto PCs, nor does it prevent installation of other providers’ security software on new PCs.

As Sterling points out, having a competitive leverage is a far cry form posing an antitrust violation. As he quite correctly emphasized: “Antitrust laws are designed to protect consumers, not competitors." The Obama administration has been cautious about antitrust litigation, especially in the technology sector.

Also in the EU things are not that simple for the AV companies. As Microsoft knows too well, the European Community has aggressive antitrust regulators, but does not hinder competition.

The conclusion is that AV providers have to live with the uncomfortable truth that they cannot fight Microsoft on antitrust issue. May be providing a superior product is the way for AV providers to go?