Monday, agricultural seed producer Monsanto Co. (MON) said the St. Louis Federal Court ruled that E.I. du Pont de Nemours & Co. (DD) was not licensed to combine Monsanto's herbicide-tolerant soybean seed Roundup Ready trait with DuPont's own herbicide-tolerant Optimum GAT trait in corn or soybeans. Monsanto said the ruling means DuPont is not authorized to use the Roundup Ready trait to mask the "unacceptable risks to farmers" posed by the Optimum GAT, or OGAT trait.
Monsanto originally filed suit against DuPont and its wholly owned subsidiary Pioneer Hi-Bred International, Inc. in May 2009, seeking to prevent the unlicensed combination of Roundup Ready herbicide tolerant technologies in soybeans and corn with DuPont's OGAT. DuPont is the main competitor of Monsanto and the two companies have been engaged in a legal battle since a licensing deal between the two turned sour.
In its ruling, the court said that the Monsanto-DuPont license agreements "are unambiguous and do not grant Pioneer the right to stack" the Roundup Ready trait with the OGAT trait. Scott Partridge, counsel for Monsanto, said, "DuPont negotiated and signed a contract with a specific set of rights, at the financial terms they preferred, and the rights did not include making this stacked combination. This was DuPont's business decision."
"The court record further highlights that DuPont was authorized to create any stacked trait product with our Roundup Ready technology other than one such as OGAT, a conscious business decision that they made at the time the contract was negotiated and signed," said Partridge. "DuPont has always had the rights to create a stacked product such as Roundup Ready with its Plenish High Oleic soybean oil product, or adding a second herbicide tolerance mode like its proprietary ALS-herbicide-tolerance combined with Roundup Ready," he said.
Commenting on the future of the lawsuit, Patridge said, "Importantly, the court's ruling follows well-established patent and contract law by recognizing the rights of the technology developer and reinforcing that contractual rights should be respected. Now that the fundamental issue in this case has been decided, we look forward to rapidly concluding the balance of this litigation."
Monsanto, in a statement, said "This represents the third time that a court has ruled that DuPont has violated a trait licensing agreement with Monsanto, and the second time that a court has found DuPont did so by using Monsanto's technology in a way that was not authorized."
MON is gaining $0.34 or 0.38%, and is trading at $81.47 on a volume of nine thousand shares on the New York Stock Exchange.
DD is gaining $0.20 or 0.59%, and is trading at $34.21 on a volume of 216 thousand shares on the New York Stock Exchange.
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