In MONSANTO CO. v. E.I. DU PONT DE NEMOURS & CO., Appeal No. 13-1349, the Federal Circuit affirmed the district court’s imposition of sanctions.
Monsanto granted DuPont a license to produce and sell soybeans containing an herbicide-resistant trait. The license included language restricting DuPont’s rights to stack the trait. When DuPont developed a soybean that did stack the trait, Monsanto filed suit. During litigation, DuPont pursued contract reformation counterclaims, stating that it had always subjectively believed it had the right to stack the licensed trait. Based on evidence produced during discovery, the district court found that DuPont’s position was not “rooted in fact.” The court held that DuPont had perpetrated a fraud on the court and abused the judicial process. In response, the district court struck DuPont’s reformation defense and counterclaims and awarded attorney fees limited to fees incurred in defending against DuPont’s reformation counterclaims.
The Federal Circuit reviewed the imposition of sanctions for an abuse of discretion under Eighth Circuit law. While the Federal Circuit determined that DuPont’s conduct did not satisfy the high standard for “fraud on the court,” it held that the district court correctly found that DuPont had abused the judicial process and acted in bad faith by making affirmative factual misrepresentations. Therefore, the Federal Circuit affirmed the narrowly tailored sanctions imposed by the district court.