Patents on genetically modified (GM) crop technology arm their owners with powerful control over farmers' ability to grow, harvest, distribute, and profit from GM crops. No clearer example exists than the April 2004 decision of the U.S. Court of Appeals for the Federal Circuit in Monsanto Co. v. McFarling, in which the court upheld Monsanto's licensing practice of forbidding farmers to save seed from patented GM crops for replanting. By forcing farmers to buy new GM seed each season, the McFarling II decision disproportionately impacts small farmers and concentrates GM crop growth among larger agribusinesses better positioned to bear the financial burden. Notably, the McFarling II court's finding of no misuse by Monsanto was conditioned on the unique circumstance that Monsanto's patents cover both the first-generation GM seed and the second-generation crop grown therefrom. Absent such facts, McFarling II strongly suggests that a use restriction on goods made by, yet not incorporating, a licensed good is not a legitimate field of use restriction. That Monsanto prevailed in this case is certainly consistent with the Federal Circuit's propensity to side with patent owners facing a patent misuse defense. Nevertheless, the court's summary dismissal of McFarling's affirmative tying allegation under the antitrust laws bears further scrutiny, as does McFarling's charge that the patent exhaustion doctrine limits Monsanto's ability to enforce post-sale restrictions on the use of its patented GM seed.



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