The U.S. Court of Appeal for the Federal Circuit reiterated its position on calculating damages in patent infringement suits using a multi-factor “reasonable royalty” equation and explicitly affirmed its precedent that the “statutes specifically authorizing the patenting of plants did not eliminate the availability of utility patent protection covering plants.” Monsanto Co. v. David, Case No. 07-1104 (Fed. Cir., Feb. 5, 2008) (Lourie, J).
The facts of this case were similar to those in Monsanto v. McFarling The defendant, Loren David, is a commercial farmer, who—as part of an agreement to purchase and license Monsanto’s patented, genetically modified soybean seeds—was required, among other things, to only use the seeds for planting that particular season. Through circumstantial evidence, Monsanto showed that David had violated the terms of his agreement. The district court held that David had willfully infringed Monsanto’s patent and granted the plaintiff, in addition to the reasonable royalty base, enhanced damages including attorneys’ fees and costs.
On appeal, David first argued that that Monsanto’s patent, which claimed a genetic sequence, could not be infringed by saving and planting seeds containing that gene. Specifically, he claimed that the Plant Patent Act of 1930 and the Plant Variety Protection Act of 1970 extinguished the right to patent a plant by any other means. The Court dismissed this argument out of hand, stating that “the broad language of 35 U.S.C. § 101 relating to patentable subject matter remains unmodified by the existence of the P.V.P.A. and the P.P.A.”
Monsanto pieced together a story of David’s activities using, in addition to expert testimony, a wealth of circumstantial evidence that tracked David’s purchases and planting dates to infer that he had infringed. David attempted to have the testimony of Monsanto’s expert, Koppatschek, excluded based upon the fact that his opinion had been based on testing results assembled by the plaintiff. The Court found David’s arguments challenging Koppatschek’s reliance on the seed report tests solely because they were produced by Monsanto’s scientific team rather than by Koppatschek himself misplaced and unpersuasive. The Court also found David’s inconsistent and unsubstantiated claims about his planting procedures insufficient to rebut Koppatschek’s conclusions and Monsanto’s proposed timeline of events.
David also contested the district court’s award of a reasonable royalty, attorneys’ fees and costs asserting three things: that this is not an exceptional case; that the licensing agreement provision explicitly granting an award of attorneys’ fees is not enforceable; that the monetary amount of the award issued “does not bear a reasonable relation to the result achieved.” The Court found all of David’s arguments to be unpersuasive, affirming the enforceability of Monsanto’s licensing agreement and deeming David’s “deceitful” litigation tactics and his “apparent disregard for patent right … and the judicial process” as sufficient to affirm the district court’s finding of an exceptional case.
Practice Note: As a reminder to potential defendants, the Court seemed to imply that David might have had more success in undermining Monsanto’s claims had he formulated a more appropriately stated Daubert motion, focusing on the scientific basis of Monsanto’s expert opinion, instead of the origin of the data that underlay the report.