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Food for Thought: Genetically Modified Seeds as De Facto Standard Essential Patents

64 Pages Posted: 11 Apr 2013 Last revised: 25 Apr 2015

Ryan G. Vacca

University of New Hampshire School of Law

Benjamin M. Cole

Fordham University, Gabelli School of Business

Brent J. Horton

Gabelli School of Business, Fordham University

Date Written: March 12, 2014

Abstract

For several years, courts have been improperly calculating damages in cases involving the unlicensed use of genetically-modified (GM) seed technology. In particular, when courts determine patent damages based on the hypothetical negotiation method, they err in exaggerating these damages to a point where no rational negotiator would agree. In response, we propose a limited affirmative defense of an implied license due to the patent’s status as a de facto standard essential patent. To be classified as a de facto standard essential patent, the farmer must prove three elements that reflect the peculiarities of GM seeds used in farming: (1) dominance, (2) impracticability, and (3) necessary to fulfill a basic need. Based on the approaches used by courts and standard setting organizations in licensing standard essential patents in technological fields such as cell phones and software, designation of some GM seeds as standard essential patents allows the courts to imply a license from patentees to farmers on reasonable and non-discriminatory (RAND) terms. Doing so shifts the case from a tort-based patent infringement suit to a breach of contract dispute and alters the damages regime from one based in compensation, deterrence, and punishment (a tort approach) to one based solely in compensation (a contractual approach). As a result of this novel proposal, the damages calculations in these suits return to economic reality.

Keywords: genetically modified seeds, GM seed, Monsanto, patent, damages, standard essential patent, RAND, FRAND, reasonable royalty, farm, farming, infringement, contract, tort, license, established royalties, Bowman, Ralph, plants, soybean, cotton, herbicide, Roundup, farmer, SSO, standard setting, standard

JEL Classification: K00, K10, K11, K12, K19, K30, K39, Q00, Q16, Q19

Suggested Citation

Vacca, Ryan G. and Cole, Benjamin M. and Horton, Brent J., Food for Thought: Genetically Modified Seeds as De Facto Standard Essential Patents (March 12, 2014). 85 University of Colorado Law Review 313 (2014); U of Akron Legal Studies Research Paper No. 13-07. Available at SSRN: https://ssrn.com/abstract=2245887

Ryan G. Vacca (Contact Author)

University of New Hampshire School of Law ( email )

Two White Street
Concord, NH 03301
United States
603.513.5291 (Phone)

Benjamin M. Cole

Fordham University, Gabelli School of Business ( email )

1790 Broadway, Suite 1127
New York, NY 10019
United States
646-312-8261 (Phone)
646-312-8295 (Fax)

HOME PAGE: http://www.bnet.fordham.edu/bmcole/

Brent J. Horton

Gabelli School of Business, Fordham University ( email )

464 Faber Hall
Bronx, NY 10458
United States

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