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Post-Sale Restrictions on Patented Seeds: Which Law Governs?

Rita S. Heimes

University of Maine - School of Law

April 20, 2010

Wake Forest Intellectual Property Law Journal, Vol. 10, No. 2, p. 98, 2010

Since the agrichemical industry entered the business of creating genetically engineered seeds, farming in America has never been the same. Patents on these GE seeds have been reinforced with so-called “license” agreements that accompany their sale to farmers. Failure to abide the terms of these agreements can land a farmer in federal district court defending a patent infringement lawsuit. Several states have passed legislation relating to the terms of these contracts (known in the industry as “Technology Use Agreements” or colloquially as “bag-tag” agreements). Are these state laws appropriate contract regulation or are the agreements, as the industry claims, non-exclusive patent licenses governed by federal patent law? In order to resolve that question, one must first determine whether the transfer of the seeds to the farmer exhausts the patent-holder’s rights in the technology accompanying the seeds. Generally, when someone purchases a patented good she is free to use it, take it apart and rebuild it, and even re-sell it to another without infringing the patent through the “first sale” or exhaustion doctrine. A recent Supreme Court case analyzing the patent exhaustion doctrine calls into question the seed industry’s characterization of the transaction as a mere license to farmers as opposed to a sale of goods. This article explores that issue and whether or not state laws relating to bag-tag agreements are preempted by federal patent law.

Number of Pages in PDF File: 55

Keywords: patents, genetically engineered, genetically modified, preemption, licensing, exhaustion

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Date posted: June 24, 2010  

Suggested Citation

Heimes, Rita S., Post-Sale Restrictions on Patented Seeds: Which Law Governs? (April 20, 2010). Wake Forest Intellectual Property Law Journal, Vol. 10, No. 2, p. 98, 2010. Available at SSRN: http://ssrn.com/abstract=1593230

Contact Information

Rita S. Heimes (Contact Author)
University of Maine - School of Law ( email )
246 Deering Avenue
Portland, ME 04102
United States
HOME PAGE: http://www.lawandinnovation.org
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