Monsanto Canada Inc v Schmeiser [2004] 1 S.C.R. 902, 2004 SCC 34 is a leading Supreme Court of Canada case on patent rights for biotechnology, addressing a dispute between a Canadian canola farmer, Percy Schmeiser, and the agricultural biotechnology company Monsanto. The court heard the question of whether Schmeiser's intentionally growing genetically modified plants constituted "use" of Monsanto's patented genetically modified plant cells. By a 5–4 majority, the court ruled that it did. The Supreme Court also ruled 9–0 that Schmeiser did not have to pay Monsanto their technology use fee, damages or costs, as Schmeiser did not receive any benefit from the technology. The case drew worldwide attention and is widely misunderstood to concern what happens when farmers' fields are accidentally contaminated with patented seed. However, by the time the case went to trial, all claims of accidental contamination had been dropped; the court only considered the GM canola in Schmeiser's fields, which Schmeiser had intentionally concentrated and planted. Schmeiser did not put forward any defence of accidental contamination.
Background
The biotechnology company Monsanto developed and patented a glyphosate-resistant gene for the canola plant which has the effect of producing canola that is resistant to glyphosate. Monsanto marketed the seed as Roundup Ready Canola. Farmers using the system are able to control weed competition using Roundup, while avoiding damage to the Roundup-resistant crops. Users are required to enter into a formal agreement with Monsanto, which specifies that new seed must be purchased every year, the purchase price of which includes a licensing fee to use the patent rights. Roundup Ready Canola was introduced in Canada in 1996, and by 1998, it accounted for 25% of the country's canola area.
Origin of the patented seed in Schmeiser's fields
As established in the original Federal Court trial decision, Percy Schmeiser, a canola breeder and grower in Bruno, Saskatchewan, first discovered Roundup-resistant canola in his crops in 1997. He had used Roundup herbicide to clear weeds around power poles and in ditches adjacent to a public road running beside one of his fields, and noticed that some of the canola which had been sprayed had survived. Schmeiser then performed a test by applying Roundup to an additional of the same field. He found that 60% of the canola plants survived. At harvest time, Schmeiser instructed a farmhand to harvest the test field. That seed was stored separately from the rest of the harvest and used the next year to seed approximately of canola.
At the time, Roundup Ready canola was in use by several farmers in the area. Schmeiser claimed that he did not plant the initial Roundup Ready canola in 1997, and that his field of custom-bred canola had been accidentally contaminated. While the origin of the plants on Schmeiser's farm in 1997 remains unclear, the trial judge found that with respect to the 1998 crop, "none of the suggested sources [proposed by Schmeiser] could reasonably explain the concentration or extent of Roundup Ready canola of a commercial quality" ultimately present in Schmeiser's 1998 crop.
Dispute
In 1998, Monsanto learned that Schmeiser was growing a Roundup-resistant crop and approached him to sign a license agreement to their patents and to pay a license fee. Schmeiser refused, maintaining that the 1997 contamination was accidental and that he owned the seed he harvested, and he could use the harvested seed as he wished because it was his physical property. Monsanto then sued Schmeiser for patent infringement, filing its case in Canadian federal court on August 6, 1998.
Patent rights versus property rights
Regarding the question of patent rights and the farmer's right to use seed taken from his fields, Monsanto said that because they hold a patent on the gene, and on canola cells containing the gene, they have a legal right to control its use, including the intentional replanting of seed collected from plants with the gene which grew accidentally. Schmeiser insisted on his "farmer's rights" to do anything he wished with seeds harvested from any plants grown on his field - including plants from seeds that were accidentally sown - and that this tangible property right overrides Monsanto's patent rights.
Canadian law does not mention any such "farmer's rights"; the court held that the farmer's right to save and replant seeds is simply the right of a property owner to use his or her property as he or she wishes, and hence the right to use the seeds is subject to the same legal restrictions on use rights that apply in any case of ownership of property, including restrictions arising from patents in particular. The court wrote: "Thus a farmer whose field contains seed or plants originating from seed spilled into them, or blown as seed, in swaths from a neighbour's land or even growing from germination by pollen carried into his field from elsewhere by insects, birds, or by the wind, may own the seed or plants on his land even if he did not set about to plant them. He does not, however, own the right to the use of the patented gene, or of the seed or plant containing the patented gene or cell." Environmental groups and anti-genetic engineering activists championed Schmeiser's cause and he spoke on the case around the world. Others depicted the case as a contest between a large biotechnology company and an equally large and well funded anti-biotechnology industry and raised concerns that the facts and context of the case was being misrepresented by Schmeiser, environmental groups and anti-genetic engineering activists.
Monsanto v. Schmeiser was portrayed as being part of the process of legally defining the bounds of new biotechnologies, including genetic engineering and ownership of higher lifeforms. The case was frequently connected with that of the so-called Harvard mouse, where in 2002 the Canadian Supreme Court had rejected a patent for a special breed of mouse developed for research by Harvard University. The Canadian Harvard mouse case was a precedent-setting case in Canada with regard to the right to own higher lifeforms, where the Canadian ruling went against findings in the US and Europe, where the Harvard mouse patent was upheld.
Initial trial and appeal
The issues of patent infringement and "farmer's rights" were settled, in Monsanto's favour, at the trial before the Federal Court of Canada
All claims relating to Roundup Ready canola in Schmeiser's 1997 canola crop were dropped prior to trial and the court only considered the canola in Schmeiser's 1998 fields. Regarding his 1998 crop, Schmeiser did not put forward any defence of accidental contamination. The evidence showed that the level of Roundup Ready canola in Mr. Schmeiser's 1998 fields was 95–98%.
The Federal Court of Appeal in particular stressed the importance of the finding that Schmeiser had knowingly used the seed, in their decision to find Schmeiser in infringement of the patent, and noted that in a case of accidental contamination or a case where the farmer knew of the presence of the gene but took no action to increase its prevalence in his crop, a different ruling could be possible (see paragraphs 55-58 of the appeal ruling
Intervening on Schmeiser's behalf were a consortium of six non-government organizations (Council of Canadians; Action Group on Erosion, Technology and Concentration; Sierra Club; National Farmers Union; Research Foundation for Science, Technology and Ecology; and the International Center for Technology Assessment) and the Attorney General of Ontario.
Arguments
Schmeiser's principal defence at trial was that as he had not applied Roundup herbicide to his canola he had not used the invention. This argument was rejected; the court said that the patent granted for the invention did not specify the use of Roundup as part of the invention, and thus there was no basis for introducing the requirement that Roundup had to be used in order for the invention to be used. That is, a patent prohibits unauthorized use of an invention in any manner, not merely unauthorized use for its intended purpose.
The Court considered the question of whether knowingly (or, where one ought to have known) planting and cultivating genetically modified canola constitutes "use" of Monsanto's patented invention of genetically modified canola cells, even if the crop is not treated with Roundup and the presence of the gene affords no advantage to the farmer. The court ruled in favour of Monsanto, holding that his use of the patented genes and cells was analogous to the use of a machine containing a patented part: "It is no defence to say that the thing actually used was not patented, but only one of its components." (Supreme Court Decision, Paragraph 78 "The court record shows, however, that it was not just a few seeds from a passing truck, but that Mr Schmeiser was growing a crop of 95–98% pure Roundup Ready plants, a commercial level of purity far higher than one would expect from inadvertent or accidental presence. The judge could not account for how a few wayward seeds or pollen grains could come to dominate hundreds of acres without Mr Schmeiser’s active participation, saying ‘. . .none of the suggested sources could reasonably explain the concentration or extent of Roundup Ready canola of a commercial quality evident from the results of tests on Schmeiser's crop’" - in other words, even if the original presence of Monsanto seed on his land in 1997 was inadvertent, the crop in 1998 was entirely purposeful.