Wednesday, August 29, 2007

Farmer petitions Supreme Court to review Roundup Ready patent case

Photo from Flickr user Clearly Ambiguous Monsanto owns at least two patents on “Roundup Ready” crops that are resistant to glyphosate herbicides. When farmers purchase seeds for Roundup Ready crops they sign a “Technology Agreement”, which requires among other things, that the farmers do not retain any seeds for replanting and that they pay a licensing fee. In 1998, McFarling, a farmer from Northern Mississippi, signed the agreement, paid the license fees, and ultimately purchased Monsanto's Roundup Ready soybean seeds. In 1999 and 2000, he replanted seeds saved from 1998 without paying license fees. After learning of this, Monsanto sued McFarling for breach of both of their patents (U.S. Patent No. 5,633,435 and U.S. Patent No. 5,352,605).
Following the Federal Circuit’s decision in the second appeal, Monsanto withdrew all claims other than breach of the ‘605 patent for which the company sought damages. McFarling proceeded to argue new grounds for his defense, as Monsanto had withdrawn some claims, which was denied by both the district court and the Federal Circuit.

McFarling claimed that Monsanto's established licensing fee should limit the size of damages awarded. However, a Missouri jury found McFarling liable and awarded damages of $40 per seed bag, even though Monsanto only charges a $6.50 license fee per bag of seed. An injunction was also issued, requiring McFarling to cease usage of seeds saved from 1998. The Court of Appeals for Federal Circuit (CAFC) found that Monsanto's default licensing fee did not limit the possible damages. Furthermore, the court noted that infringement damages could properly include (a) any harm felt by Monsanto as a result of the infringement, as well as (b) any additional benefits gained by McFarling. This included: reputational harm as a result of rogue planters, potential lapses in Monsanto’s database of planting techniques, McFarling’s increase in yield of $31-61 per acre, as well as bargaining power. This decision by the CAFC changes the way patent infringement damages can be calculated and potentially makes allowable damages signifigantly larger.



McFarling has now petitioned the Supreme Court for a grant of a Writ of Certiorari. For further information, please see the following links:


http://www.patentlyo.com/patent/2007/08/mcfarling-petit.html



http://www.patentdocs.us/patent_docs/2007/06/monsanto_co_v_m.html




http://www.fulcruminquiry.com/Monsanto_reasonable_royalty_case.htm





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