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Federal Circuit once again affirms that saving patented seeds for replanting is infringement

February 06, 2008
Post by Blog Staff

In a decision yesterday, the Federal Circuit once again affirmed a finding of infringement against a farmer who saved seeds covered by a patent to replant the following year. The plaintiff in this case, Monsanto, has brought similar cases in the past, and they have resulted in similar outcomes.Here, the asserted claims covered the genetic sequence for Monsanto's Roundup Ready gene, which, when incorporated into plants, causes the plants to exhibit tolerance to the herbicide glyphosate. The defendant farmer argued that because the claims were directed to the sequence rather than the seeds or plants incorporating the sequence, the seeds were not covered by the patent. This argument was flatly rejected by the Federal Circuit. The court noted that the authority on which the defendant relied, J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., actually leads to the opposite result, as in that case the Supreme Court held that despite the availability of plant patents and PVPA certificates, utility patents were also available for plants, assuming the requirements for patentability were met. In fact, the Court refused "to narrow the reach of § 101 where Congress has given us no indication that it intends this result." Here, the infringing act was the use of the gene by planting the seed incorporating the gene, so the Federal Circuit affirmed the finding of infringement. While the court vacated a portion of the damages award for recalculation, it affirmed the award of costs and attorney fees to Monsanto.More detail of Monsanto Co. v. David after the jump.Monsanto is the owner of a patent directed toward genetic sequences that confer resistance to the herbicide glyphosate in plants. Monsanto sells seeds incorporating this gene under its Roundup Ready brand. When selling such seeds, Monsanto requires purchasers to execute a Technology Agreement, which prohibits saving seeds from one year's harvest for replanting.Loren David is a commercial soybean farmer. Monsanto claimed that in 2003, seeds David planted were Roundup Ready soybeans improperly saved from the previous year's harvest. David denied saving seeds. David had executed a Monsanto Technology Agreement in 1997, and the parties agreed that the agreement was in effect in 2003. Based on discrepancies in the number and timing of units of seed David purchased in 2003, as well as David's purchase of over 1,000 gallons of glyphosate-based herbicides that year, the district court held that David had, in fact, improperly saved seeds. The court, therefore, held that David had willfully infringed the '605 patent and breached the Technology Agreement by planting saved seed from a prior year's crop. In total, David was found to be liable to Monsanto for $786,989.43: $226,214.40 in damages, an additional $10,000 in enhanced damages, $323,140.05 in attorneys' fees, $63,026.95 in prejudgment interest, $164,608.03 in costs under the Technology Agreement, and, alternatively, costs in the amount of $30,542.99 pursuant to 28 U.S.C. § 1920 . David appealed.

On appeal, David argued that because the patent claimed a gene sequence, it could not be infringed merely by saving seeds from plants containing the patented gene sequence, as the plants could not be sufficiently described under the written description requirement of 35 U.S.C. § 112. He urged that J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc. stood for the proposition that plants can only receive patent protection under the Plant Patent Act, the Plant Variety Protection Act, or under a utility patent on a plant variety. A utility patent on a gene sequence, David argued, did not entitle the holder of that patent to enforce its grant of exclusivity against growers of plant varieties that contain the gene sequence.The Federal Circuit rejected this argument, noting that the Supreme Court in J.E.M. refused "to narrow the reach of § 101 where Congress has given us no indication that it intends this result." Here, the infringing act was the use of the gene by planting the seed incorporating the gene, so the Federal Circuit affirmed the finding of infringement.David's real complaint, according to the court, was that he should be able to save seed from his harvest, regardless of Monsanto's patent. The court noted it had already decided this issue on more than one occasion, and the argument fared no better this time around. Finally, the court noted the district court's factual findings were not clearly erroneous, and as a result, the Federal Circuit affirmed the finding of infringement. Turning to the amount of damages assessed, the court affirmed the award in most respects. First, the court affirmed the award of attorneys' fees and costs. The court rejected David's argument that this was not an exceptional case under § 285, as David knew that saving seed was a violation of the Technology Agreement, yet he did so anyway. David also attempted to cover up his infringement and deceive Monsanto. Based on these facts, a finding that the case was exceptional was not clearly erroneous.The court also held § 1920 did not set a maximum amount of costs that may be awarded in a case if the parties have contracted otherwise. Here, it was entirely proper for the district court to award the full costs permitted under the Technology Agreement, even if Monsanto would not have been entitled to as much for costs under § 1920. With regard to the reasonable royalty award, David argued that the number of infringing units of seed that the district court found he had planted (4,110 units) was not supported by the evidence. He also claimed that the reasonable royalty awarded for each unit ($55.04) was not supported by the evidence, and that the court should have used the $7.75 Technology Fee from the Technology Agreement as the reasonable royalty figure. The court again observed that it had already decided the issue of whether the technology fee should be the only award in two prior cases, and therefore rejected this argument. With regard to the number of units, however, the court found the district court's methodology clearly erroneous. This figure was based on the seed density planted on David's acres in 2003, which the district court held to be 107.5 pounds per acre. To arrive at that figure, the district court averaged two density figures offered at trial; Monsanto's expert rate of 95 pounds per acre, based on samples taken from David's fields, and David's testimony during his deposition of 120 pounds per acre. While the Federal Circuit noted the difficulty faced by the district court in arriving at a density figure, it found that there was confusion in David's deposition testimony about different planting rates for conventional verses Roundup Ready soybeans. The court held David's estimate of 120 pounds per acre, when properly read in context, did not refer to the density of his Roundup Ready planting. The court thus remanded to the district court for additional fact finding concerning the Roundup Ready soybean density in David's fields in 2003, and a possible adjustment of the number of units on which the reasonably royalty was owed.To read the full decision in Monsanto Co. v. David, click here.

MVS attorney Ed Sease successfully argued on behalf of Pioneer in J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.


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