Court supports label license restrictions

In December 2001, the United States Supreme Court ruled in favor of Pioneer Hi-Bred International, Inc. that plants as a matter of law are entitled to the benefit of the regular patent laws, like any other invention such as a machine or a new drug. Therefore, Pioneer's patents on corn plants were properly issued by the United States Patent and Trademark Office. The case was then remanded for further proceedings in accord with the Supreme Court's ruling.Now, the one remaining defendant, who continued the litigation has been held liable as a matter of law as an unauthorized reseller of Pioneer seed. This defendant, in violation of the limited label license printed on the bag of seed and its companion bag tag, did not purchase the seed to grow a crop but instead used it to resell to others.This ruling confirms that only authorized Pioneer sales representatives and dealers can sell Pioneer seed, and others, who obtain the seed by means other than purchase from Pioneer, cannot resell seed as though they were authorized dealers. The Pioneer limited label license restricts the purchaser to use seed only for productions of grain and forage. The Northern District of Iowa in its September 29th opinion written by Chief Judge Mark W. Bennett held, as a matter of law, that this expression of the one permissible activity is the exclusion of other activities, such as reselling.This is the second significant and precedent setting opinion in this case. In the first, plants were held to be patentable subject matter as a matter of law, and in this most recent opinion, the so-called \'seed wrap license\' (printed on the seed bag) has been held valid as a matter of law.


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