Monsanto Averts Declaratory Judgment Suit

13 June 2013 Personalized Medicine Bulletin Blog

On June 10, 2013, the U.S. Court of Appeals for the Federal Circuit held that Monsanto’s representation that it would not pursue farmers and seed sellers for patent infringement if they inadvertently use Monsanto’s patented genetically modified seeds and plants is sufficient to deny a coalition of farmers, seed sellers and agricultural organizations the juristictional basis to challenge Monsanto’s patented seed technology. In Organic Seed Growers and Trade Ass’n. v. Monsanto Co.,  2012-1298 (Fed. Cir. 2013), the Federal Circuit noted that Monsanto’s binding assurances to appellants that it would not take legal action against growers whose crops might inadvertently contain trace of Monsanto’s patented technology and appellants’ failure to allege any circumstances placing them beyond the scope of those assurances removed any risk of suit against appellants as users or sellers of trace amounts (less than one percent) of the patented technology. In reaching this conclusion, the Federal Circuit reaffirmed that de minimis use can still give rise to infringement liability and provides patentees a strategy to avoid patent challenges without a covenant not to sue.

Inadvertent Use of Self-Replicating Technologies

Appellants originally sought declaratory judgments of non-infringement and invalidity with respect to twenty-three patents owned by Monsanto Co. and Monsanto Technology, LLC (“Monsanto”) that cover Monsanto’s genetically modified seeds and plants that are resistant to the herbicide glyphosate, the active ingredient in Monsanto’s popular herbicide sold under the trade name Roundup. The appellants were joined in the suit by the Public Patent Foundation of the Benjamin N. Cardoza School of Law.

Monsanto sells the patented technology and licenses others to grow and sell seed under a limited-use license permitting licensees to plant, harvest and sell a single generation of the patented seeds. It was undisputed that Monsanto enforced its intellectual property. Between 1997 and 2010, Monsanto pursued over 800 claims for unauthorized use of its patented seeds.

The appellants did not want to use the patented seeds but were concerned that their crops and seeds would be contaminated with the patented seeds and that as a result, they would be sued by Monsanto for patent infringement. The appellants alleged that they their fear of suit prevented them from planting crops that may have become contaminated by Monsanto’s seeds. At one point, appellants asked Monsanto for a written covenant not to sue. Monsanto refused their request and directed appellants to its website wherein Monsanto noted that it would not exercise its patent rights where trace amounts of the patented seeds or traits are present in farmer’s fields as a result of inadvertent means. The district court ruled in favor of Monsanto who argued that the court had no jurisdiction because appellants lacked an essential element of standing – a live case or controversy.

Appellants’ Subjective Fear of Suit Is Not Enough

The Federal Circuit affirmed the district court’s holding that appellants had not demonstrated that their fear of suit does not rise to an actual controversy between the parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. The court noted that even though some of the appellants could be liable for infringement if they used or sold the patented seeds or plants (even very small quantities of the patented technology) Monsanto’s explicit representations not to take legal action against inadvertent use of the technology is essentially equivalent to a covenant not to sue. The appellants also failed to show that their possible use would fall outside the disclaimed minimal use. 

Thus this case provides patentees a road map to avoid unwanted validity challenges from potential plaintiffs who may seek to invalidate patents that are unlikely to be asserted against them sans a convent not to sue.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights

California Establishes Fund to Combat Wildfire Threats
15 July 2019
Renewable Energy Outlook
There’s No Place Like Home – But Is That a Reasonable Accommodation?
15 July 2019
Labor & Employment Law Perspectives
Beginning Construction Continuity Safe Harbor Extended for National Security Concerns
15 July 2019
Renewable Energy Outlook
Manufacturing MarketTrends | July 2019, Issue 2
12 July 2019
Manufacturing MarketTrends
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
MAGI’s Clinical Research Conference
29 October 2019
Las Vegas, NV
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ