Friday, January 22, 2010

Monsanto whacks DuPont on stacking issue

TheTruthOnTheMarket blog noted of Monsanto's victory over DuPont in ED Mo:

But the ruling did support Monsanto in its basic case which centers around the field-of-use restriction described above. And on this issue the court found in Monsanto’s favor, holding that the license did indeed contain a valid restriction against stacking of glyphosate-tolerant traits and that Monsanto may seek a remedy for violation of the restriction (if the agreements and patents are deemed enforceable, an issue not reached by the court’s decision) in contract.

The ruling is narrow in scope, but it’s an important victory for Monsanto in what is, at its core, a patent infringement/breach of contract case–not an antitrust case. It is difficult to escape the conclusion, laid out on Monsanto’s web page here, that Pioneer resorted to stacking in an effort not to improve through synergy the overall glyphosate tolerance of its seeds but rather to patch over the relative ineffectiveness of its own traits. Monsanto has licensed its technology widely for use in products where its trait is combined with different traits from other companies (including, notably, competitors like Pioneer). But for very good reasons (mainly protection of its brand), Monsanto imposes field of use restrictions on the coupling of its Roundup Ready trait with other companies’ traits that purport to perform the same function. The court’s decision paves the way for Monsanto to thus enforce its property rights.

from a news clip on 18 Jan 2010:

Monsanto won a small victory on Friday, when a federal judge ruled that rival Dupont had violated the terms of a contract in combining Monsanto technology with its own in producing genetically modified seeds.

But the ruling was only a partial victory for Monstanto because it left open the possibility that the St. Louis-based Monsanto may still be on the hook for antitrust violations.

“The Court does not express any opinion on the viability … that the license agreements … are unenforceable as a matter of patent law and on antitrust grounds,” wrote Judge E. Richard Webber of the Eastern District of Missouri, in his ruling. ”[Dupont] may be able to demonstrate that Monsanto may not recover for patent infringement or breach of contract.”

It is the latest development in a long-running war between the nation’s two largest seed manufacturers, who have sued each other in a patent and contract dispute. Dupont has also urged the Justice Department’s Antitrust Division toinvestigate Monsanto’s licensing practices which, Dupont alleges, shut out competitors and force farmers to pay higher prices for seeds.

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