Asgrow Seed Co. v. Winterboer
| Decision Date | 18 January 1995 |
| Docket Number | 922038 |
| Citation | 115 S.Ct. 788,513 U.S. 179,130 L.Ed.2d 682 |
| Parties | ASGROW SEED COMPANY, Petitioner v. Denny WINTERBOER and Becky Winterboer, dba Deebees |
| Court | U.S. Supreme Court |
Petitioner Asgrow Seed Company has protected two varieties of soybean seed under the Plant Variety Protection Act of 1970 (PVPA), which extends patent-like protection to novel varieties of sexually reproduced plants (plants grown from seed). After respondent farmers planted 265 acres of Asgrow's seed and sold the entire saleable crop—enough to plant 10,000 acres —to other farmers for use as seed, Asgrow filed suit, alleging infringement under, inter alia, 7 U.S.C. § 2541(1), for selling or offering to sell the seed, and § 2541(3), for "sexually multiply[ing] the novel varieties as a step in marketing [them] (for growing purposes)." Respondents contended that they were entitled to a statutory exemption from liability under § 2543, which provides in relevant part that "[e]xcept to the extent that such action may constitute an infringement under [§ 2541(3) ]," a farmer may "save seed . . . and use such saved seed in the production of a crop for use on his farm, or for sale as provided in this section: Provided, That" such saved seed can be sold for reproductive purposes where both buyer and seller are farmers "whose primary farming occupation is the growing of crops for sale for other than reproductive purposes." In granting Asgrow summary judgment, the District Court found that the exemption allows a farmer to save and resell to other farmers only the amount of seed the seller would need to replant his own fields. The Court of Appeals reversed, holding that § 2543 permits a farmer to sell up to half of every crop he produces from PVPA-protected seed, so long as he sells the other half for food or feed.
Held: A farmer who meets the requirements set forth in § 2543's proviso may sell for reproductive purposes only such seed as he has saved for the purpose of replanting his own acreage. Pp. __.
(a) Respondents were not eligible for the § 2543 exception if their planting and harvesting were conducted "as a step in marketing" under § 2541(3), for the parties do not dispute that these actions constituted "sexual multiplication" of novel varieties. Since the PVPA does not define "marketing," the term should be given its ordinary meaning. Marketing ordinarily refers to the act of holding forth property for sale, together with the activities preparatory thereto, but does not require that there be extensive promotional or merchandising activities connected with the selling. Pp. __.
(b) By reason of the proviso, the first sentence of § 2543 allows seed that has been preserved for reproductive purposes (saved seed) to be sold for such purposes. However, the structure of the sentence is such that this authorization does not extend to saved seed that was grown for the purpose of sale (marketing) for replanting, because that would violate § 2541(3). As a practical matter, this means that only seed that has been saved by the farmer to replant his own acreage can be sold. Thus, a farmer who saves seeds to replant his acreage, but changes his plans, may sell the seeds for replanting under the proviso's terms. The statute's language stands in the way of the limitation the Court of Appeals found in the amount of seed that can be sold. Pp. __.
982 F.2d 486 (CA Fed.1992) reversed.
Richard L. Stanley, Houston, TX, for petitioner.
Richard H. Seamon, Washington, DC, for U.S. as amicus curiae by special leave of the Court.
William H. Bode, Washington, DC, for respondents.
The Plant Variety Protection Act of 1970, 7 U.S.C. § 2321 et seq., protects owners of novel seed varieties against unauthorized sales of their seed for replanting purposes. An exemption, however, allows farmers to make some sales of protected variety seed to other farmers. This case raises the question of whether there is a limit to the quantity of protected seed that a farmer can sell under this exemption.
In 1970, Congress passed the Plant Variety Protection Act (PVPA) 84 Stat. 1542, 7 U.S.C. § 2321 et seq., in order to provide developers of novel plant varieties with "adequate encouragement for research, and for marketing when appropriate, to yield for the public the benefits of new varieties," § 2581. The PVPA extends patent-like protection to novel varieties of sexually reproduced plants (that is, plants grown from seed) which parallels the protection afforded asexually reproduced plant varieties (that is, varieties reproduced by propagation or grafting) under Chapter 15 of the Patent Act. See 35 U.S.C. §§ 161-164.
The developer of a novel variety obtains PVPA coverage by acquiring a certificate of protection from the Plant Variety Protection Office. See 7 U.S.C. §§ 2421, 2422, 2481-2483. This confers on the owner the exclusive right for 18 years to "exclude others from selling the variety, or offering it for sale, or reproducing it, or importing it, or exporting it, or using it in producing (as distinguished from developing) a hybrid or different variety therefrom." § 2483.
Petitioner, Asgrow Seed Company is the holder of PVPA certificates protecting two novel varieties of soybean seed, which it calls A1937 and A2234. Respondents, Dennis and Becky Winterboer, are Iowa farmers whose farm spans 800 acres of Clay County, in the northwest corner of the state. The Winterboers have incorporated under the name "D-Double-U Corporation" and do business under the name "DeeBee's Feed and Seed." In addition to growing crops for sale as food and livestock feed, since 1987 the Winterboers have derived a sizable portion of their income from "brown-bag" sales of their crops to other farmers to use as seed. A brown-bag sale occurs when a farmer purchases seed from a seed company, such as Asgrow, plants the seed in his own fields, harvests the crop, cleans it, and then sells the reproduced seed to other farmers (usually in nondescript brown bags) for them to plant as crop-seed on their own farms. During 1990, the Winterboers planted 265 acres of A1937 and A2234, and sold the entire saleable crop, 10,529 bushels, to others for use as seed enough to plant 10,000 acres. The average sale price was $8.70 per bushel, compared with a then-current price of $16.20 to $16.80 per bushel to obtain varieties A1937 and A2234 directly from Asgrow.
Concerned that the Winterboers were making a business out of selling its protected seed, Asgrow sent a local farmer, Robert Ness, to the Winterboer farm to make a purchase. Mr. Winterboer informed Ness that he could sell him soybean seed that was "just like" Asgrow varieties A1937 and A2234. Ness purchased 20 bags of each; a plant biologist for Asgrow tested the seeds and determined that they were indeed A1937 and A2234.
Asgrow brought suit against the Winterboers in Federal District Court for the Northern District of Iowa, seeking damages and a permanent injunction against sale of seed harvested from crops grown from A1937 and A2234. The complaint alleged infringement under 7 U.S.C. § 2541(1), for selling or offering to sell Asgrow's protected soybean varieties; under § 2541(3), for sexually multiplying Asgrow's novel varieties as a step in marketing those varieties for growing purposes; and under § 2541(6), for dispensing the novel varieties to others in a form that could be propagated without providing notice that the seeds were of a protected variety.1
The Winterboers did not deny that Asgrow held valid certificates of protection covering A1937 and A2243, and that they had sold seed produced from those varieties for others to use as seed. Their defense, at least to the §§ 2541(1) and (3) charges, rested upon the contention that their sales fell within the statutory exemption from infringement liability found in 7 U.S.C. § 2543. That section, entitled "Right to save seed; crop exemption," reads in relevant part as follows:
2
The Winterboers argued that this language gave them the right to sell an unlimited amount of seed produced from a protected variety, subject only to the conditions that both buyer and seller be farmers "whose primary farming occupation is the growing of crops for sale for other than reproductive purposes," and that all sales comply with state law. Asgrow maintained that the exemption allows a farmer to save and resell to other farmers only the amount of seed the seller would need to replant his own fields—a limitation that the...
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