Antitrust Law Daily Wrap Up, ANTITRUST NEWS: DuPont and Monsanto Reach Agreement on Soybean Technology, Dismiss Antitrust and Patent Claims, (Mar 26, 2013)

By Tobias J. Gillett, J.D., LLM.

E. I. Du Pont de Nemours and Company and Monsanto Company have entered into technology licensing agreements, in the process agreeing to a stipulated dismissal of their antitrust and patent infringement lawsuits against each other, the companies have announced in a joint press release today.

Under the licensing agreements, DuPont will make annual royalty payments totaling $802 million from 2014 to 2017 in exchange for trait technology, associated data, and soybean lines to support commercial introduction of products employing Monsanto’s Genuity Roundup Ready 2 Yield and Genuity Roundup Ready 2 Xtend technologies. DuPont will also make royalty payments on a per-unit basis for continued access to Monsanto’s technology beginning in 2018, subject to annual minimum payments totaling $950 million through 2023.

The agreements will permit DuPont to offer Genuity Roundup Ready 2 Yield soybeans as early as 2014, and Genuity Roundup Ready 2 Xtend glyphosate and dicamba tolerant soybeans as early as 2015, subject to regulatory approvals. DuPont will receive regulatory data rights to soybean and corn traits previously licensed from Monsanto, allowing it to create products containing a range of stacked trait combinations, and Monsanto will receive access to certain DuPont disease resistance and corn defoliation patents.

The stipulated dismissal of the companies’ claims against each other, filed in the federal district court in St. Louis today, brings to a close long-running patent and antitrust litigation. It also dispenses with a $1 billion jury verdict concluding DuPont had willfully infringed Monsanto’s U.S. Patent No. RE39,247, a reissue of U.S. Patent No. 5,352,605, on herbicide-resistant soybeans. Monsanto had alleged that DuPont had infringed the patent by combining or “stacking” herbicide resistant traits in soybean seeds, contrary to a licensing agreement that gave DuPont’s subsidiary Pioneer Hi-Bred International, Inc. limited rights to use Roundup Ready technology.

DuPont had asserted counterclaims alleging that Monsanto had violated antitrust laws by misusing its patent to exert monopoly power and stifle competition. Those counterclaims had been split from the patent case, and were to be heard before a separate jury in September 2013. Both companies expressed satisfaction with the agreements, and contended that they would enhance the abilities of both companies to produce innovative products in future.

“This technology exchange helps both companies to expand the range of innovative solutions we can offer farmers, and to do so faster than either of us could alone,” said DuPont Pioneer President Paul E. Schickler. “The agreements broaden the Pioneer soybean line-up. Importantly, they give us greater flexibility in developing combinations of genetics and traits to help feed an increasingly crowded planet.”

“We’ve always agreed that technological innovation and farmer choice are essential to agriculture, and this agreement endorses the value of our next-generation soybean technologies,” said Brett Begemann, Monsanto president and chief commercial officer. “This signals a new approach to our companies doing business together, allowing two of the leaders in the industry to focus on bringing farmers the best products possible while working to advance innovation and long-term opportunity for agriculture.”

Companies: Monsanto Co.; E. I. Du Pont de Nemours and Co.; Pioneer Hi-Bred International, Inc.

News: Antitrust