Monsanto Wins $1 billion in Court Battle with DuPont
St. Louis Post-Dispatch -- ST. LOUIS, MO -- August 2, 2012 -- Jurors awarded Creve Coeur-based biotechnology giant Monsanto Co. $1 billion Wednesday, saying that rival DuPont willfully infringed on a Monsanto patent that sits at the heart of the company's business and has helped it become the world's largest biotech seed producer.The eight-member jury deliberated for less than an hour, returning with the verdict about 5:20 pm., after hearing daylong closing arguments. The trial, held in U.S. District Court for the Eastern District of Missouri, lasted three weeks.
The jury award is among the top five patent verdicts ever, the largest involving agricultural biotechnology and the largest of any kind this year, according to data compiled by Bloomberg News.
"Importantly, this verdict highlights that all companies that make early and substantial investments in developing cutting edge technology will have their intellectual property rights upheld and fairly valued," said David Snively, Monsanto's executive vice president and general counsel, in a statement. "This verdict also underscores that DuPont's unauthorized use of the Roundup Ready technology was both deliberate and aimed at rescuing its own failing technology."
DuPont immediately fired back, saying it would appeal as soon as possible and calling the award unjustified.
Monsanto sued Delaware-based E.I. DuPont de Nemours & Co., and its Pioneer seed division, in 2009, alleging that DuPont violated Monsanto's patent on Roundup Ready soybean technology by combining it with its own technology, Optimum GAT.
Roundup Ready technology is genetically engineered into crops, making them resistant to the herbicide Roundup, which kills the weeds, but not the plants. The Roundup Ready system has become the dominant platform in American agriculture since its introduction in 1996 and is the primary driver of Monsanto's revenue, which totaled nearly $12 billion in the company's 2011 fiscal year.
When Monsanto first released the technology, it decided to license it to seed companies, which could then implant the genetically engineered traits into their own seeds. The company now licenses the technology to about 200 companies, including Pioneer -- its biggest customer. Monsanto now owns its own seed companies, too, making Pioneer its largest rival in the soybean seed business.
Monsanto's attorneys told the jury, in often highly technical and laborious testimony, that DuPont had been trying to come up with its own system to rival Roundup Ready. In the mid-2000s, DuPont began to tout its Optimum GAT system, but then acknowledged it was failing and posed an "unacceptable risk" to farmers.
In testimony three weeks ago, Monsanto CEO Hugh Grant told the jury that DuPont approached the company, asking for the ability to combine or 'stack" the GAT technology with the Roundup Ready technology. Monsanto said it would give Pioneer full rights to the technology for a lump sum of $1.5 billion. DuPont declined.
But, Monsanto attorneys told the jury, DuPont continued researching how to stack the traits anyway, in violation of a 2002 licensing agreement between the companies.
"The case is about DuPont and Pioneer taking Monsanto's property," Monsanto lead attorney George C. Lombardi told the jury Wednesday. "They took something that wasn't theirs and used it in a way they weren't authorized to use it."
DuPont went after Monsanto's claims by challenging the validity of the patent on Roundup Ready, saying Monsanto knowingly withheld information in submitting the patent for review.
The lead attorney for DuPont, Leora Ben-Ami, told jurors Monsanto had tried to deceive the U.S. Patent and Trademark Office when filing for a patent in an attempt to extend the company's exclusive control over the technology. Ben-Ami also said that Monsanto filed deliberately broad patents to keep its lucrative technologies to itself before the patents were set to expire.
"They wanted another four years, so they put in a bait and switch," Ben-Ami said. "Monsanto wanted broad claims, but didn't want to tell anyone what they were commercializing."
The case is the latest in an ongoing battle between the companies. DuPont has accused Monsanto of anti-competitive behavior in another case, which is slated to go before the same court next year. DuPont's accusations in that case dovetail with an ongoing U.S. Department of Justice investigation into anti-competitive practices in the seed industry.
"Several aspects of Monsanto's misconduct involving this patent, which were not tried in this case, will be presented to a different jury as part of DuPont's antitrust and patent misuse case against Monsanto in September 2013," DuPont said in a statement.
Jeffrey Tomich of the Post-Dispatch contributed to this report.
(c)2012 St. Louis Post-Dispatch
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