Showmaker v. Advanta USA

United States Court of Appeals for the Federal Circuit

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EDWARD SHOWMAKER,

Plaintiff-Appellant,

v.

ADVANTA USA, INC.
(formally known as Garst Seed Company
and doing business as Garst Seed Company),

Defendant-Appellee.

Ronald E. Osman, Ronald E. Osman & Associates, Ltd., of Marion, Illinois,
argued for plaintiff-appellant.

Donald R. Frederico, McDermott Will & Emery LLP, of Boston, Massachusetts,
argued for defendant-appellee. With him on the brief were Peter L. Resnik and Scott E.
Murray.

Appealed from: United States District Court for the Southern District of Illinois

Judge David R. Herndon
 United States Court of Appeals for the Federal Circuit

04-1502

EDWARD SHOWMAKER,

Plaintiff-Appellant,

v.

ADVANTA USA, INC.
(formally known as Garst Seed Company
and doing business as Garst Seed Company),

Defendant-Appellee.

___________________________

DECIDED: June 14, 2005
___________________________

Before CLEVENGER, RADER, and DYK, Circuit Judges.

RADER, Circuit Judge.

The United States District Court for the Southern District of Illinois dismissed

Edward Showmaker’s claim that Advanta USA, Inc.’s (Advanta) Soybean Purchase

Agreements (Agreement) violated the misbranding provision of the Plant Variety

Protection Act (PVPA), codified at 7 U.S.C. § 2568 (1994). Showmaker v. Advanta

USA, Inc., No. 03-CV-4096-DRH (S.D. Ill. Jan. 14, 2004). The district court determined

that the PVPA “neither creates a substantive right for farmers to save seed not

protected by the PVPA nor preempts state contract law.” Id., slip op. at 10. The district

court also determined that the contractual language in an Agreement attached to

Advanta’s seed bags did not connote PVPA protection. Id. Because the contractual
language in the Agreement did not implicate the PVPA’s misbranding provisions, this

court affirms.

I.

Mr. Showmaker is an Illinois farmer, one of many who purchased non-GMO

(genetically modified organism) Seed from Advanta. Mr. Showmaker planted Advanta’s

Garst Brand Seed D445N, Variety 57004, to produce his year 2002 soybean crop.

Advanta’s Garst Brand D445N is neither patented nor PVPA certified. Advanta has also

not filed any certification applications to date. Advanta did, however, attach an

Agreement to each of its non-GMO bags, with the following language:

The soybean seed in this bag contains genetics developed, licensed or
owned by Seller. All rights to make, produce or sell seed products derived
from this seed reside solely with Seller. Buyer acknowledges this
ownership and agrees to the following conditions:

....

Buyer will not resell or supply any of this seed to any other person or
entity. Furthermore, Buyer is strictly prohibited from saving or selling, for
seed purposes, any grain products from this seed. Buyer further agrees
not to alter, or permit the alteration of the seed . . . through either genetic
engineering, conventional breeding activities or other techniques.

Mr. Showmaker specifically refers to this portion of the Agreement in his false marking

claim under 7 U.S.C. § 2568. The Agreement does not include any reference to the

PVPA or to any PVPA certificates.

Mr. Showmaker’s attorney informed Advanta of his client’s interest in saving

D445N non-GMO Seed for future crops. In response, Advanta indicated that “[a]ny

attempt by your client to save seed of variety 57004 will breach contractual and/or

intellectual property rights.” Mr. Showmaker then filed suit on behalf of a class of

farmers from eighteen states that had also purchased non-GMO seed from Advanta,

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asserting various state and federal claims. The parties eventually agreed to dismiss all

claims except the false marking claim. The district court granted Advanta’s motion for

failure to state a claim upon which relief can be granted. This appeal followed.

II.

This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(1), as the appeal

arises from a final decision of a district court whose jurisdiction was based, in whole or

in part, on 28 U.S.C. § 1338(a). A motion to dismiss for failure to state a claim upon

which relief can be granted is a purely procedural question not pertaining to patent law,

to which this court applies the rule of the regional circuit. C & F Packing Co., Inc. v.

IBP, Inc., 224 F.3d 1296, 1306 (Fed. Cir. 2000). Under seventh circuit law, Rule

12(b)(6) motions are reviewed de novo. Id. citing Murphy v. Walker, 51 F.3d 714, 717

(7th Cir. 1995). “Dismissal is proper only if, after drawing all reasonable inferences in

the appellant’s favor, it is clear that the appellant can prove no set of facts consistent

with his claim that would entitle him to relief.” Univ. of W. Va. v. Van Voorhies, 278 F.3d

1288, 1295 (Fed. Cir. 2002).

Section 2568(a) of the PVPA prohibits, inter alia, “[e]ach of the following acts, if

performed in connection with the sale, offering for sale, or advertising of sexually

reproducible plant material or tubers or parts of tubers:”

(1) Use of the words “U.S. Protected Variety” or any word or number
importing that the material is a variety protected under certificate,
when it is not.
(2) Use of any wording importing that the material is a variety for which
an application for plant variety protection is pending, when it is not.
(3) Use of either the phrase “Unauthorized Propagation Prohibited” or
“Unauthorized Seed Multiplication Prohibited” or similar phrase
without reasonable basis. Any reasonable basis expires one year
after the first sale of the variety except as justified thereafter by a
pending application or a certificate still in force.

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Because Advanta did not use the specific language required under § 2568(a)(3),

“Unauthorized Propagation Prohibited” or “Unauthorized Seed Multiplication Prohibited,”

and because its contractual language was not a “similar phrase,” the district court

dismissed Mr. Showmaker’s complaint. The district court noted that § 2568(a)(3)

“properly understood restricts only markings that falsely indicate that a plant or seed has

PVPA protection.” Showmaker, slip op. at 10. This court affirms this holding.

Advanta did not reference the PVPA, any issued PVPA certificates, or any

pending applications for plant variety protection in its shrinkwrap license Agreements.

Thus, the district court correctly perceived no overt attempt to invoke the protections of

federal law for seeds that do not qualify for that protection. Section 2568(a)(3),

however, also prohibits the use of certain specific terms that the public may associate

with federal protections for seed products. Specifically, the phrases “Unauthorized

Propagation Prohibited” and “Unauthorized Seed Multiplication Prohibited” are terms of

art used throughout the statute to notify prospective users that the PVPA’s protections

apply. For instance, under 7 U.S.C. § 2567, certificate owners receive damages only if

“the infringer has actual notice or knowledge that propagation is prohibited or that the

variety is a protected variety.” Owners may give this notice by affixing “Unauthorized

Propagation Prohibited” or “Unauthorized Multiplication Prohibited” to the variety label.

7 U.S.C. § 2567 (2000). Likewise, § 2541 requires that acts constituting infringement

may occur only after either the certificate issues or after a distribution of a protected

plant variety with the above notice language affixed under § 2567.1 7 U.S.C. § 2541

1
See also 7 U.S.C. § 2561 (1995); 7 C.F.R. § 97.140-97.142 (1996)
(authorizing use of phrases “Unauthorized Propagation Prohibited” and “Unauthorized

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(2000). The PVPA re-emphasizes the importance of these terms by making the use of

seeds so marked acts of infringement. Id. § 2541(a)(5).

The legislative history confirms the importance of these precise statutory terms.

The House Report, for instance, shows the use of exact terms to give notice of statutory

protections:

Three sections of the bill deal with language used to give notice that the
variety is protected under the provisions of the Plant Variety Protection
Act. Currently the Act uses the term “Propagation Prohibited”. Taken
literally, this phrase could be interpreted to mean seed purchased for
sowing could not be planted. This is not the proper interpretation of the
Act and addition of the word “Unauthorized” is intended to correct possible
misinterpretation.

H.R. Rep. No. 96-1115, at 7 (1980), reprinted in 1980 U.S.C.C.A.N. 6954, 6959. Thus,

the phrase “Unauthorized Propagation Prohibited” provides notice of the PVPA’s

protections. Consistent with the precision accorded each statutory word, the “similar”

requirement of § 2568(a)(3) also does not permit a wide variance from “Unauthorized

Propagation Prohibited” or “Unauthorized Seed Multiplication Prohibited.” Because

Advanta’s contract language in no way conveys PVPA protection nor uses any term

confusingly similar to the terms in § 2568(a)(3), the district court correctly held there

was no legitimate claim under the PVPA. Showmaker, slip op. at 10.

Advanta contractually prohibited its buyers from “saving or selling, for seed

purposes, any grain products from its seed.” The contract further prohibited any

“alternation of the seed through genetic engineering, conventional breeding, or other

techniques.” This contract language restricts use of Advanta’s seeds. The prohibitions

in the Agreement, however, are not similar to “Unauthorized Propagation Prohibited” or

Seed Multiplication Prohibited” where the owner has applied for a PVPA certificate, the
owner contemplates filing an application, or upon issuance of a certificate).

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“Unauthorized Seed Multiplication Prohibited.” Unlike these terms of art, Advanta’s

contract language did not put the potential purchaser or the public on notice of a plant

variety owner’s rights. Rather, the agreement merely restricts some activities of the

buyer. Like any contract, these terms bind only the parties. Thus, Advanta does not

engage in false marking. Mr. Showmaker can prove no set of facts upon which relief

can be granted. Dismissal was therefore appropriate.

Because we have before us no claim by Showmaker for declaratory or injunctive

relief that Advanta’s contract is preempted by federal law and because Advanta asserts

no state law claims seeking enforcement of its contract, this court need not reach

Showmaker’s argument on appeal that state contract law is preempted by federal law.

III.

This court affirms the district court’s dismissal of Mr. Showmaker’s PVPA false

marking claim under 7 U.S.C. § 2568.

COSTS

Each party shall bear its own costs.

AFFIRMED

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