This article is not a substitute for legal advice and always remember to consult a licensed attorney to discuss your situation.
This year will mark the expiration of Monsanto’s patent on the first generation Round-up Ready technology. But, this expiration does not mean that farmers using seed from first generation Roundup Ready technology will be able to save harvested seed for planting a subsequent crop. Many seed companies utilizing this technology may consider other federal law protections afforded them. One such protection would be the Plant Variety Protection Act (PVPA). Another protection would be the use of contracts. And, a company also may look at utilizing patent law to limit seed saving. You will need to consider each one of these to determine if saving the seed is allowed.
The simplest way saving seed could be limited is through a contract. In the U.S., we typically allow parties to develop contracts that work for their situations. If your seed company wants to limit your ability to save seed then simply putting language in the contract is a good way to do that. For example, a purchase contract may contain language such as “Seed produced from this crop may be saved for any purposes other than reproductive purposes . . .”
Many contracts may also specify the amount of damages a party could expect if the contract is breached. If the contract does limit the right to save seed, then the producer would want to pay attention to the amount of potential damages the seed company could claim. For example, a Damage Clause may require the breaching party to pay the non-breaching party’s attorneys’ fees, court costs, and set damages at the value of the seed purchased or set damages at 2 or 3 times the value of the seed purchased.
Turning to statutory limitations, U.S. patent law is the way many seed developers look to protect newly developed seeds today. Patent law contains no exemption to allow a farmer to save seed. The U.S. Supreme Court has heard cases over the past fifteen years related to saving seeds under patent law and has consistently ruled in favor of the seed companies. A farmer found to have violated a company’s patent, i.e. saving seed for planting a subsequent crop, is exposing himself/herself to damages equaling a reasonable royalty for the use and potentially a judge deciding to increase the damages by up to 3 times the amount assessed (35 U.S. Code § 284). A seed company may also include a damage clause in the agreement used to purchase the seed that could increase the amount of damages, so please pay attention to the language of agreements you sign.
The Plant Variety Protection Act (PVPA) is a federal act that provides “patent-like” protections for sexually reproducing plants. This protection can exist for up to 20 years. The PVPA does allow for a producer to save seed but only enough seed necessary to replant an area that is no bigger than was originally planted. For example, if you planted 100 acres of a corn variety protected under the PVPA then at harvest you would only be allowed to save enough seed necessary to replant 100 acres or less next year.
One important note, the PVPA does allow for saved seed to be marketed for any purpose except when you know when the purchaser will be using it for planting a crop. Producers around the country have found interesting ways around this limitation but the courts have ruled all of the following examples to violate the PVPA:
1) selling a standing crop for the buyer to save the seed,
2) brown bag sales (buying seed in unmarked brown bags),
3) bin run sales (seed sold that seller knows seed will be used for planting a crop),
4) selling seed as “feed” when you know the buyer will use for planting a crop,
5) trading seed, and
6) gifting the seed.
As you can see, producers have tried some ingenious ways around this limitation and rarely succeeded.
Who is liable for violations of the PVPA (when seed is sold for crop planting purpose)? Typically, it will be both the buyer and seller. Each could be punished with fines of up to $2,000 per violation under the Federal Seed Act and from $100 to $500 depending on the number of violations under the Maryland Seed Act. For the seller, each transaction would be considered a violation of the PVPA and violations can add up quickly if the farmer sells PVPA-protected seed to a large number of farmers for planting a crop. Other third parties, such as a seed conditioner, could be liable under the PVPA if they knew the seed was a protected variety and purchased via an illegal sale.
As the patents on the first generation of Roundup Ready technology expire, producers need to understand the implications this will have on their operations and how other laws may limit their ability to save harvested seed to plant a crop next season. To determine if seed is savable, a producer will want to 1) review any agreements signed when purchasing the seed; 2) check the label to determine if the variety is protected by the PVPA, is protected by patent law, or is unprotected; and 3) check with each seed company. Doing these simple things can serve as a strategy to manage the legal risks associated with seed saving.