Recently, a group of 73 organic and conventional farmers, seed businesses, and public advocacy groups petitioned the Supreme Court to review the Federal Circuit’s decision that the petitioners lack standing to pursue their Declaratory Judgment Act (“DJA”) claim against Monsanto regarding petitioners’ potential liability for infringement of Monstanto’s patents for transgenic seed or genetically engineered seed (“GE seed”). The Supreme Court’s decision as to whether this case is worthy of review may further define standing requirements for declaratory judgment claims.
The petitioners wish to avoid using, growing, or dealing in GE seed. They claim that they face a real risk of being sued by Monsanto for patent infringement because their fields and seed supplies will “inevitably” be contaminated by Monsanto’s genetically engineered “Roundup Ready” crop varieties and, as a result, they will unintentionally use the patented GE seed without a license. Thus, to forestall future patent infringement suits, the petitioners filed a declaratory judgment action against Monsanto. Organic Seed Growers & Trade Ass’n v. Monsanto Co., 851 F. Supp. 2d 544, 549 (S.D.N.Y. 2012). The DJA allows a court to “declare the rights and other legal relations of any interested party” so long as there is “a case of actual controversy.” 28 U.S.C. § 2201(a). Monsanto moved to dismiss the action, claiming that no “actual controversy” exists. Monsanto argued that it never demanded royalty payments from any of the petitioners or threatened legal action against them, and that “[i]t has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in a farmer’s fields as a result of inadvertent means.” Organic Seed Growers, 851 F. Supp. 2d at 553.
The district court granted Monsanto’s motion, finding no evidence of a threat to the petitioners and no actual controversy to resolve. Id. at 556. On appeal, the Federal Circuit affirmed, agreeing that Monsanto’s statements that it would not pursue claims against those who inadvertently use or sell seed that contains trace amounts of the GE seed (1% or less of the total seed) are similar to a covenant not to sue, and thus moot a declaratory judgment action. Organic Seed Growers & Trade Ass’n v. Monsanto Co., 718 F.3d 1350, 1358 (Fed. Cir. 2013).
The petitioners argue that the Federal Circuit impermissibly narrowed the standing requirements for a DJA claim and that petitioners do in fact have standing because the threat of litigation from Monsanto is “certainly impending.” This petition gives the Supreme Court an opportunity to address three important issues. First, it gives the Court an opportunity to address the question it left open in Bowman v. Monsanto Co., 133 S. Ct. 1761 (2013): whether permitting GE seeds inadvertently introduced into one’s land to grow would constitute an infringing use. Second, it presents the Court with an opportunity to determine whether it can draw a bright-line rule for determining whether a justiciable controversy is present in a patent case. Finally, the Court could decide whether a DJA claim can be mooted by a representation not to sue, or corporate policy statement, rather than a formal covenant not to sue.
The Supreme Court’s decision whether to hear the case will also be instructive on DJA interpretation and might also inflect interpretations of the Court’s recent opinion in Clapper v. Amnesty Int’l USA, 133 S.Ct. 1138, 1150 n.5 (2013), which requires a showing of “substantial risk” to confer standing to a party under the DJA. As the Federal Circuit noted, a de minimis amount of infringement is nonetheless infringement. Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282, 1299 (Fed. Cir. 2009). This suggests that petitioners face a risk of suit by Monsanto if any one petitioner uses a single seed. The Federal Circuit also indicated that Monsanto’s representation that it would not pursue legal action in such a scenario reduces that risk below the “substantial” level. A denial of the petition would suggest that, at least for the moment, the Supreme Court agrees.