Miscellaneous Docket No. 900 MONSANTO COMPANY v. Mitchell Scruggs, Eddie Scruggs, Scruggs Farm & Supplies, LLC, Scruggs Farm Joint…

NOTE: This order is nonprecedential.
United States Court of Appeals for the Federal Circuit
Miscellaneous Docket No. 900
MONSANTO COMPANY,
Plaintiff-Respondent,
v.
MITCHELL SCRUGGS, EDDIE SCRUGGS,
SCRUGGS FARM & SUPPLIES, LLC, SCRUGGS FARM JOINT VENTURE,
HES FARMS, INC., MES FARMS, INC., and MHS FARMS, INC.,
Defendants-Petitioners.
On Petition for Permission to Appeal pursuant to 28 U.S.C. § 1292(b)
from the United States District Court for the Northern District of Mississippi
in case no. 3:00-CV-00161, Judge W. Allen Pepper, Jr.
ON PETITION FOR PERMISSION TO APPEAL
Before MAYER, BRYSON, and DYK, Circuit Judges.
MAYER Circuit Judge.
ORDER
Mitchell Scruggs et al. (Scruggs) petition for permission to appeal an order
certified by the United States District Court for the Northern District of Mississippi as one
involving controlling issues of law as to which there is substantial ground for difference
of opinion and for which an immediate appeal may materially advance the ultimate
termination of the litigation. Monsanto Company opposes.
Monsanto owns a patent directed toward inserting a modified gene into crop
seeds to cause plants grown from the seed to become resistant to certain herbicides.
Monsanto also owns a patent directed toward inserting a modified gene into seeds that

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cause a plant to produce an enzyme that is toxic to certain insects that feed off of it.
The patented technology is self-replicating such that the progeny of the plants grown
with the modified genes will also contain the genetic makeup that allows them to be
resistant to either the herbicide or insects.
Monsanto licenses the seeds with the patented technology with certain
restrictions, including, inter alia, (1) that the seeds containing the patented technology
cannot be sold to growers unless the grower signs one of Monsanto's license
agreements and (2) that the grower can only use the patented transgenic seed for
planting a single commercial crop per season, thus prohibiting growers from saving
seeds and replanting them or supplying seeds to others for replanting. Monsanto states
that each bag of seeds contains a notice that a license is required before use.
Scruggs purchased the seeds from seed companies, but never signed a license
agreement with Monsanto. Scruggs planted the seeds and after harvesting the plants,
retained the new generation of seeds. Scruggs's subsequent crops were planted with
those retained seeds, as well as seeds obtained from subsequent generations of crops.
Monsanto filed suit, alleging infringement of its patents. The district court issued a
preliminary injunction, prohibiting Scruggs from further sale and use of seeds containing
Monsanto's patented technology. On cross-motions for summary judgment, the district
court found, inter alia, that Scruggs had infringed the patents and that the doctrine of
patent exhaustion was inapplicable to this case. The court then issued a permanent
injunction and a final judgment and stayed proceedings on damages pending appeal.
On appeal, we affirmed the trial court's infringement and patent exhaustion
determinations, holding that the patent exhaustion doctrine was inapplicable because
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(1) the initial sale from Monsanto was not an "unrestricted sale" and (2) the second
generation of seeds were never "sold." Monsanto Co. v. Scruggs, 459 F.3d 1328, 1336
(Fed. Cir. 2006). We vacated the trial court's permanent injunction determination for
reconsideration in light of MercExchange, L.L.C. v. eBay Inc., 547 U.S. 388 (2006).
Scruggs filed a petition for certiorari, which was denied by the Supreme Court.
On remand to the district court, Scruggs moved for reconsideration in light of the
Supreme Court's decision in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S.
, 128 S. Ct. 2109 (2008). The district court denied the motion, explaining that the
Court's decision in Quanta merely reaffirmed the proposition that the authorized sale of
an article that substantially embodies a patent exhausts the patent holder's rights and
did not undermine this court's decision in Monsanto. Noting, however, the "wealth of
persuasive authority which posits the opposite conclusion, e.g., that Quanta's holding
on the doctrine of patent exhaustion is a substantial limitation on the rights of patent
holders," the trial court certified the order for interlocutory appeal.
Ultimately, this court must exercise its own discretion in deciding whether it will
grant permission to appeal interlocutory orders certified by a trial court. See In re
Convertible Rowing Exerciser Patent Litigation 903 F.2d 822 (Fed. Cir. 1990); 28
U.S.C. § 1292(d)(2) ("the Federal Circuit may, in its discretion, permit an appeal to be
taken from such order"). We determine that granting the petition in these circumstances
is not warranted. Scruggs may raise these issues on appeal from the final judgment or
injunction.
Accordingly,
IT IS ORDERED THAT:
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The petition for permission to appeal is denied.
FOR THE COURT
MAY -4 2009 /s/ Jan Horbaly
Date Jan Horbaly
Clerk U.S. COURT
PILED PLED
APPEALS FOR
THE FEDERAL CIRCUIT
cc: James L. Robertson, Esq. MAY -4 2009
Seth Waxman, Esq. Jairi Hthiorui
CLERK
s1 9
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