The argument is over whether the purchase of seeds implies the farmer is financing the 'use' (like a car lease) or the 'ownership' of the seed (like a car purchase).
Monsanto will argue that as the seed's utility is not entirely consumed by it's use (planting) that the most suitable pricing model is to finance the 'use' of the seed, not its ownership. Ergo royalties.
They have an enormously strong point to make here - which is that if ownership were implied by purchase the price would be much higher (as they would need to factor in both the value that future generations of seed provides and cannibalization of future seed demand from renewals).
Which is why the outcome of this case is somewhat moot. If Monsanto is prevented from charging a royalty because of some technicality they would simply charge a much higher upfront price, which they would then allow you to finance (and the farmer will end up being economically indifferent to whether it is called a royalty or not).