Monsanto Awarded $1 Bln In Patent Infringement Case Against DuPont

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8/1/2012 10:30 PM ET

Agricultural giant Monsanto Co. (MON: Quote) has been awarded damages of $1 billion by a US District Court in its patent infringement case against rival EI DuPont de Nemours & Co. or DuPont (DD: Quote) for 'willful' infringement of Monsanto's patented flagship Roundup Ready herbicide tolerant technologies.

Wilmington, Delaware-based DuPont and its wholly owned subsidiary DuPont Pioneer were found guilty of willfully infringing of intellectual property for several years by the Federal Court jury in the four-week long trial in St. Louis that began on July 9. This is the third time that that DuPont has been found violating a trait licensing agreement with Monsanto by the courts.

DuPont is alleged to have infringed on Monsanto's patented technology when it tried to patch the problems with its own Optimum GAT (OGAT) technology that had failed in earlier development.

DuPont has also been accused of refusing a license at multiple times, when it was offered by Monsanto prior to and throughout the duration of the trial. DuPont is alleged to have produced hundreds of soybean lines with the combination of Roundup Ready trait with its GAT trait.

"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. This verdict also underscores that DuPont's unauthorized use of the Roundup Ready technology was both deliberate and aimed at rescuing its own failed technology," Monsanto's General Counsel David Snively said in a statement.

Meanwhile, DuPont has immediately responded in a statement saying it strongly disagrees with the verdict as 'there were several fundamental errors in the case which deprived the jury of important facts and arguments." DuPont added it will appeal against the ruling.

"DuPont believes that the evidence presented during the trial demonstrated clearly that Monsanto's Roundup Ready soybean patent (RE 39,247) is invalid and unenforceable and that Monsanto intentionally deceived the United States Patent and Trademark Office on several occasions as it sought patent protection," DuPont said in the statement.

DuPont has argued that "Pioneer has never sold a single Optimum GAT seed and has no plans to do so in the future. DuPont's license to sell Roundup Ready soybeans remains in place and is not impacted by this verdict."

Monsanto's Roundup Ready technology was first commercially introduced to U.S. soybean farmers in 1996, and is broadly licensed to alfalfa, corn, cotton, soybean, spring canola, sugar beet and winter canola farmers.

Monsanto's Roundup Ready patent that was initially issued in 1997 expires in 2014. The technology allows farmers to better get rid of weeds with Roundup herbicide, while leaving the crops unaffected. Monsanto, the world's largest seed company, originally filed the lawsuit against DuPont and DuPont Pioneer in May 2009. Meanwhile, DuPont has also filed a countersuit in U.S. federal court in the Southern District of Iowa in October 2011 against Monsanto for violating a U.S. patent protecting a novel seed production technique that increases seed corn vigor to improve germination under stress.

In another lawsuit, the U.S. District Court for the Southern District of New York dismissed a suit brought against Monsanto by The Organic Seed Growers and Trade Association or OSGATA, and dozens of other plaintiff growers and organizations. The court said it found that the plaintiffs' had engaged in a "transparent effort to create a controversy where none exists."

Meanwhile, eleven prominent law professors and fourteen non-profit organizations in the field have filed an appeal against the ruling, arguing that farmers have the right to protect themselves from being accused of patent infringement by Monsanto.

MON closed Wednesday's trading at $86.41, up $0.79 or 0.92% on a volume of 2.69 million shares, and DD closed at $49.94, up $0.24 or 0.48% on a volume of 9.17 million shares.