AGSouth Genetics LLC et al v. Georgia Farm Services LLC et al
ORDER denying 204 Motion for Judgment as a Matter of Law. Ordered by U.S. District Judge W LOUIS SANDS on 5/20/2014. (bcl)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
AGSOUTH GENETICS, LLC, and
UNIVERSITY OF GEORGIA RESEARCH
GEORGIA FARM SERVICES, LLC,
CASE NO.: 1:09-CV-186 (WLS)
Presently pending before the Court is Defendant’s Post-Trial Motion for
Judgment as a Matter of Law (Doc. 204). For the following reasons, Defendant’s PostTrial Motion for Judgment as a Matter of Law (Doc. 204) is DENIED.
Following a six-day trial, a jury rendered a verdict finding Georgia Farm Services
(“GFS”) liable for willful infringement of Plaintiffs’ Plant Variety Protection Act
(“PVPA”) Certificate in violation of the PVPA. (Doc. 186.) On October 22, 2013, the jury
found that Plaintiffs were entitled to a reasonable royalty award of $125.00 per bag of
AGS 2000, multiplied by the 15 bags that the jury found to be infringing, for a total
reasonable royalty award of $1,875.00. (Id.) The jury found in Defendant’s favor as to
Plaintiff AGSouth Genetics, LLC’s (“AGSouth”) Lanham Act claim. (Id.)
Before the case went to the jury, Defendant made an oral motion for judgment as
a matter of law. (See Doc. 181.) Defendant’s Motion was based on its contention that (1)
no evidence was introduced to demonstrate that it had the requisite notice under 7
U.S.C. § 2567 to give rise to PVPA liability; (2) no evidence was introduced to suggest
that the variety had actually been propagated as purportedly required by 7 U.S.C. §
2541(d); (3) insufficient evidence was introduced to support a jury finding of
willfulness; and (4) without benefit of the expert opinion—which Defendant claimed
should have been excluded—the jury had no evidence upon which it could base a
damages finding with the requisite certainty. (Id. at 9.)
On October 24, 2013, the Court issued a written opinion disposing of the various
arguments raised in Defendant’s oral Motion. (See id.) The Court held that there was
sufficient evidence to support a finding that Defendant had “actual notice or knowledge
that propagation is prohibited or that the variety is a protected variety” as required by 7
U.S.C. § 2567 because there was evidence that the bags were marked as protected and
“Mr. Wingate at least intimated to an investigator that the AGS 2000 Defendant was
selling was certified.”
(Id. at 11.)
Next, the Court held that “[n]either actual
propagation nor intent to propagate is required for violation of the PVPA.” (Id.) As
such, the Court found that the asserted lack of evidence of actual propagation of the
protected variety was not fatal to Plaintiffs’ PVPA claim. (Id.) The Court also held that
Plaintiffs met their burden by clear and convincing evidence that Defendant’s
infringement was willful based on an electronic recording of Mr. Wingate stating that
the AGS 2000 wheat seed that Defendant was selling was certified and some of the best
on the market, and informational booklets that were found in Defendant’s office that
referenced the seed and its protected nature. (Id. at 12.) Lastly, the Court found that
Plaintiffs’ expert’s testimony could properly reach the jury, thus mooting Defendant’s
final argument. (Id. at 9.)
On November 29, 2013, Defendant filed its Post-Trial Motion for Judgment as a
Matter of Law and Memorandum of Supporting Authorities. (Doc. 204.) Therein,
Defendant claims that it is entitled to judgment as a matter of law because (1) there was
no evidence to suggest that the infringing transactions did not involve further
propagation as purportedly required by 7 U.S.C. § 2541(d); (2) Plaintiffs’ sampling
method precluded a finding of infringement of fifteen bags without speculation and
guesswork; (3) the fifteen bags found as infringing by the jury were authorized and
therefore did not violate the PVPA; (4) the jury’s willfulness finding is not supported by
clear and convincing evidence; (5) the jury’s damages finding was impermissibly based
on speculation and guesswork; and (6) the jury’s damages award was impermissibly
punitive. (See id.) On December 20, 2013, Plaintiffs filed their Response. (Docs. 212 &
213.) On January 6, 2014, Defendant filed its Reply. (Doc. 216.) As such, the referenced
Motion is ripe for review. See M.D. Ga. L.R. 7.3.1.
Under Federal Rule of Civil Procedure 50, a court should render “judgment as a
matter of law only where ‘there is no legally sufficient evidentiary basis for a reasonable
jury to find for [the non-movant].’ ” Syngenta Seeds, Inc. v. Delta Cotton Co-op., Inc., 457
F.3d 1269, 1274 (Fed. Cir. 2006) (quoting Fed. R. Civ. P. 50). The Court must draw all
reasonable inferences in favor of the nonmoving party. Reeves v. Sanderson Plumbing
Prods., 530 U.S. 133, 148-51 (2000). “Credibility determinations, the weighing of the
evidence, and the drawing of legitimate inferences from the facts are jury functions, not
those of a judge.” Id. at 150 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
I. Exemption to PVPA liability at 7 U.S.C. § 2541(d)
Defendant bases all of its arguments regarding infringement of the PVPA on its
assertion that “[t]he only set of 15 bags that the evidence could have allowed the jury to
find infringing were the 15 bags sold to Plaintiffs’ private investigator, Zelotis
Wofford.” (Doc. 204 at 4.) Defendant claims that the evidence is undisputed that those
bags were not used for actual propagation of the variety and therefore are not
infringing under the plain language of 7 U.S.C. § 2541(d). (Id. at 4-5.) Plaintiffs argue
that there is no basis to conclude that the 15 bags that the jury found infringing were the
bags that were sold to Mr. Wofford. (Doc. 211 at 5.) Plaintiffs maintain, however, that,
even if the infringing bags were those sold to Mr. Wofford, the PVPA does not require a
showing of actual propagation. (Id. at 6-7.) Instead, Plaintiffs assert that § 2541(d) only
exempts actions taken with express consent of the owner of the variety. (Id. at 7.)
“The PVPA extends patent-like protection to novel varieties of sexually
reproduced plants . . . which parallels the protection afforded asexually reproduced
plant varieties . . . under Chapter 15 of the Patent Act.” Asgrow Seed Co. v. Winterboer,
513 U.S. 179, 181 (1995). The PVPA restricts the ability of entities that do not have rights
under a PVP certificate to take certain actions involving the protected variety. See id.
The Act was designed to “provide developers of novel plants varieties with ‘adequate
encouragement for research, and for marketing when appropriate, to yield for the
public the benefits of new varieties.” Id. An exemption found at 7 U.S.C. § 2541(d)
removes certain actions from the purview of the PVPA. The Parties dispute whether
the language at § 2541(d) exempts Defendant’s actions in this matter.
7 U.S.C. § 2541(a), titled “Acts constituting infringement,” enumerates various
acts that, if taken by a person or entity in regard to a protected variety, constitute
infringement of the rights of the holder of the applicable PVP certificate. Infringing acts
are limited to acts that occur in the United States, “or in commerce which can be
regulated by Congress or affecting such commerce,” within the time period when the
PVP certificate is valid and active, and only where the purported infringer acts without
authority and with requisite notice of the protected nature of the variety. See 7 U.S.C. §§
2541(a), 2567. The prohibited acts are as follows:
(1) sell or market the protected variety, or offer it or expose it for sale,
deliver it, ship it, consign it, exchange it, or solicit an offer to buy it, or any
other transfer of title or possession of it;
(2) import the variety into, or export it from, the United States;
(3) sexually multiply, or propagate by a tuber or a part of a tuber, the
variety as a step in marketing (for growing purposes) the variety;
(4) use the variety in producing (as distinguished from developing) a
hybrid or different variety therefrom;
(5) use seed which had been marked “Unauthorized Propagation
Prohibited” or “Unauthorized Seed Multiplication Prohibited” or progeny
thereof to propagate the variety;
(6) dispense the variety to another, in a form which can be propagated,
without notice as to being a protected variety under which it was
(7) condition the variety for the purpose of propagation, except to the
extent that the conditioning is related to the activities permitted under
section 2543 of this title;
(8) stock the variety for any of the purposes referred to in paragraphs (1)
(9) perform any of the foregoing acts even in instances in which the
variety is multiplied other than sexually, except in pursuance of a valid
United States plant patent; or
(10) instigate or actively induce performance of any of the foregoing acts
7 U.S.C. § 2541(a). “[T]he PVPA gives the holder of a PVP Certificate rather broad
exclusive rights.” Delta & Pine Land Co. v. Sinkers Corp., 177 F.3d 1343, 1347 (Fed. Cir.
1999). However, subsection (d) provides language that arguably circumscribes the
purview of the PVPA. That subsection provides as follows:
(d) Acts not constituting infringement
It shall not be an infringement of the rights of the owner of a variety to
perform any act concerning propagating material of any kind, or
harvested material, including entire plants and parts of plants, of a
protected variety that is sold or otherwise marketed with the consent of
the owner in the United States, unless the act involves further propagation
of the variety or involves an export of material of the variety, that enables
the propagation of the variety, into a country that does not protect
varieties of the plant genus or species to which the variety belongs, unless
the exported material is for final consumption purposes.
7 U.S.C. § 2541(d). Defendant argues that subsection (d) exempts any act from the
ambit of infringing acts under the PVPA unless there is evidence of actual propagation.
In other words, Defendant reads subsection (d) to require that actual propagation of the
variety occur before any of the enumerated actions in subsection (a) constitute
infringement. Plaintiffs argue that subsection (d) “only applies when the seller is given
express authority by the owner to s[ell] or market a protected variety prior to
commencing such sale or marketing.” (Doc. 211 at 7.) In other words, Plaintiffs read
subsection (d) to exempt only those actions that are taken with express authority of the
owner of the protected variety.
The Court rejects both suggested readings of subsection (d).
interpretation would greatly circumscribe infringing acts under the PVPA.
instance, a seed dealer could sell seeds to farmers without limitation and avoid PVPA
liability as long as there is no evidence that those seeds were actually propagated. That
conclusion would be contrary to the apparent intent of the sweeping scope of § 2541(a).
For instance, § 2541(a)(8) makes the mere stocking of a variety for any purpose also
enumerated in § 2541(a) an infringing act. It would be incongruous to assume that
Congress intended to make the mere stocking of a protected variety an infringing act if
actual propagation was required for infringement.
Since Defendant’s reading of §
2541(d) would completely remove the mere stocking of a variety from the purview of §
2541(a), Defendant’s reading of § 2541(d) would render § 2541(a)(8) superfluous. At the
other extreme, Plaintiffs’ reading of subsection (d) would be redundant of subsection
(a), which states that an enumerated act constitutes infringement to the extent that it is
“perform[ed] without authority.” Compare 7 U.S.C. § 2541(a) and 7 U.S.C. § 2541(d).
Because Plaintiffs’ reading of § 2541(d) would only exempt those actions taken with
consent of the owner—which is already a condition precedent to PVPA liability under §
2541(a)—Plaintiffs’ interpretation would render § 2541(d) superfluous. Because the
Court “must strive to give effect to every word in the statutory text,” the Court rejects
both Parties’ interpretations of § 2541(d). Deckers Outdoor Corp. v. United States, 714 F.3d
1363, 1371 (Fed. Cir. 2013) (citing Marx v. Gen. Revenue Corp., 133 S. Ct. 1166, 1178 (2013)
(“the canon against surplusage is strongest when an interpretation would render
superfluous another part of the same statutory scheme”)).
In the Federal Circuit, the “first step in interpreting a statute is to determine
whether the language at issue has a plain and unambiguous meaning with regard to the
particular dispute in the case.” Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 644
(Fed. Cir. 2011). The PVPA and § 2541(d) are not models of clarity. See Asgrow Seed, 513
U.S. at 185-86. As the Court reads the language, certain clauses could modify several
other clauses and determining which clause modifies which cannot be ascertained
without context. For instance, it is not immediately clear whether “in the United States”
is intended to modify “of a protected variety that is sold or otherwise marketed” or
“with the consent of the owner.” As such, the Court finds that the statutory language is
ambiguous and thus turns to the canons of statutory construction.
“Beyond the statute’s text, [the ‘traditional tools of statutory construction’]
include the statute’s structure, canons of statutory construction, and legislative history.”
Bull v. United States, 479 F.3d 1365, 1376 (Fed. Cir. 2007) (citations omitted). “When the
statutory language is ambiguous, legislative history can be useful in determining
Congressional intent.” Indian Harbor Ins. Co. v. United States, 704 F.3d 949, 954 (Fed. Cir.
2013) (citing In re Swanson, 540 F.3d 1368, 1376 (Fed. Cir. 2008)). In light of the various
rules and canons of statutory construction, the Court reads 7 U.S.C. § 2541(d) to exclude
from the ambit of infringing acts any act that does not involve further propagation of
any material of a protected variety that is capable of being propagated and that has
been placed into the stream of commerce in the United States by or with the
participation and consent of the owner.1 Thus, once a variety is placed into the stream
of commerce by the owner, § 2541(d) exempts acts taken in relation to that variety to the
extent the acts do not involve propagation.
Defendant proposes that “involves
propagation” should be read to require actual propagation.
Neither the statutory
language nor any case cited by Defendant supports that reading. Instead, “involve”
should be given its Merriam-Webster definition: “to have or include (someone or
something) as a part of something.”
The Court’s reading of subsection (d) comports with the legislative history of the
PVPA. When passed in 1970, the purpose of the PVPA was to “assur[e] the developers
of novel varieties of sexually reproduced plants of exclusive rights to sell, reproduce,
import, or export such varieties, or use them in the production (as distinguished from
the development) of hybrids or different varieties, for a period of 17 years.” H.P. Rep.
No. 91-1605 (1970), reprinted in 1970 U.S.C.C.A.N. 5082, 5082-83. Thus, the PVPA seeks
to protect owners of varieties from the distribution of the variety for the purpose of
production as distinguished from distribution for the purpose of development.
Accordingly, it stands to reason that § 2451(d) would exempt any act that does not
involve production—i.e. propagation. The Court is mindful, however, that defining
Because this case does not involve the export of a protected variety, the Court declines to consider the
final clause of § 2541(d).
“involve” too narrowly would eviscerate the intended purpose of the PVPA by
removing from the PVPA’s ambit many instances where the protected variety was
distributed for the purpose of production but actual propagation did not occur or could
not be demonstrated.
In light of the referenced interpretation of § 2541(d), the Court finds that
Defendant’s actions are not covered by the exemption at § 2541(d) because this case
The evidence introduced at trial supports a finding that
Defendant sold 320 bags of AGS 2000 to Edward Parker and that the seed from those
bags were actually propagated, and thus involved propagation. Also, even if the jury
relied solely on the transaction with Mr. Wofford, the evidence at trial showed that
propagation was involved in that transaction. Mr. Wofford asked Mr. Wingate several
questions regarding the various characteristics of the seeds and their crop-yielding
potential, and Mr. Wingate offered to sell Mr. Wofford various products to help the
seeds grow. Further, Mr. Wingate admitted at trial that he assumed that the seeds were
to be planted. Accordingly, the Court finds that Defendant’s actions as to AGS 2000
“involve[d] further propagation of the variety,” and therefore do not fall within the
exemption at § 2541(d).
II. Plaintiffs’ sampling method
Defendant asserts that, because Mr. Wofford stated that one bag that was tested
for AGS 2000 only contained 55% of that variety and another bag that was tested for
AGS 2000 contained 0% of that variety, “the jury’s finding that 15 bags infringed can
only be based on speculation and guesswork.” (Id. at 6.) Plaintiffs argue that there is
sufficient evidence that the bags sold by Defendant contained AGS 2000 based on the
laboratory results and admissions by Douglas Wingate. (Id. at 10-11.)
Defendant’s argument regarding the sampling method is plausible only to the
extent it is established that the only fifteen bags that the jury found infringing were
those sold to Zelotis Wofford. However, on a renewed motion for judgment as a matter
of law, the Court must view the evidence in the light most favorable to Plaintiffs and
may only grant judgment as a matter of law if there is no legal basis upon which the
jury could rest its finding. Here, Douglas Wingate admitted that Defendant sold 320
bags of uncertified AGS 2000 seed. Also, Edward Parker testified that he purchased 320
bags of uncertified AGS 2000 seed from Defendant. Those admissions are sufficient to
support a jury finding that at least 15 bags infringed Plaintiffs’ PVPA rights.
III. Authorized sales under 7 U.S.C. § 2541(a)
Defendant argues that the sale to Zelotis Wofford was authorized by Plaintiffs,
and thus not infringing under 7 U.S.C. § 2541(a), because “Mr. Wofford was acting as
plaintiff’s authorized agent in initiating and consummating the transaction.” (Doc. 204
at 6-7.) Plaintiffs state that Defendant’s argument relating to Mr. Wofford acting as
Plaintiffs’ agent should not be considered because that argument was not “set forth in
Defendant’s trial oral motion for judgment as a matter of law.” (Id. at 3.) Plaintiffs
assert that, even if such argument is considered, the PVPA exempts instances where the
seller has express authority from the owner of the variety, not instances where the
buyer has such authority. (Id. at 7.)
7 U.S.C. § 2541 requires that an action involving a protected variety must be
“without authority.” As stated above, the Court cannot assume that the jury found that
the only infringing bags were those involved in the transaction with Mr. Wofford. The
evidence supports a jury finding that Defendant sold infringing bags of AGS 2000 to
Edward Parker, and Mr. Parker was clearly without authority to engage in that
transaction. Also, even if the only infringing sales were those to Mr. Wofford, § 2541(a)
does not exempt sales to an authorized agent. Instead, § 2541(a) makes all enumerated
acts infringing to the extent they are “perform[ed] without authority.” The evidence
supports a finding that Defendant violated the PVPA by making sales to Mr. Wofford
because Defendant did not have the authority to transfer title or possession of the
infringing bags at all, without regard to the identity or status of the purchaser. The fact
that Plaintiffs caused Mr. Wofford to engage in the transaction does not legitimatize
Defendant’s otherwise voluntary inappropriate and infringing conduct.
IV. Willfulness under the PVPA
In the Court’s previous order on Defendant’s Oral Motion for Judgment as a
Matter of Law, the Court held that the jury could find a willful violation of the PVPA by
clear and convincing evidence based on Mr. Wingate’s statements that he knew that the
AGS 2000 he was selling was certified and some of the best on the market, and the fact
that informational booklets about AGS 2000 were found on Defendant’s property. (Doc.
181 at 12.) Defendant argues that the cited evidence is insufficient to support the jury’s
finding of willfulness.
However, other evidence supports the jury’s finding of
For instance, Mr. Wingate admitted that he held himself out as a
“seedsman”—a person who makes his living selling seeds. He was a licensed seed
dealer and a member of the Georgia Crop Improvement Association (“GCIA”). He sold
other bags of PVPA-protected varieties in a manner that did not violate the PVPA—that
is, in accord with the PVPA license and in the properly-marked bags.
Notwithstanding Defendant’s contention that Mr. Wingate’s testimony and the
presence of informational booklets at his place of employment demonstrate that
Defendant honestly but erroneously believed that the seed was certified, the Court
cannot make credibility determinations while considering a renewed motion for
judgment as a matter of law.
In light of the evidence suggesting Mr. Wingate’s
knowledge about protected varieties of seeds and membership with the GCIA, and the
evidence suggesting that Defendant sold protected varieties properly and in a manner
that did not violate the PVPA, the jury could have found that Mr. Wingate’s testimony
that he believed the seeds to be certified was not credible. For those reasons, and based
on the evidence discussed above, the Court finds that the jury’s finding of willfulness is
supported by clear and convincing evidence.
V. Speculative nature of damages award
Defendant argues that the jury’s damages award cannot be sustained because it
is not supported by the evidence. (Doc. 204 at 13.) Defendant asserts that the evidence
was undisputed that Plaintiff “AGSouth received an established royalty on AGS 2000
wheat at $1.25/bag” and “no evidence was presented upon which the jury could have
found a reasonable royalty of $125/bag.” (Id.) Plaintiffs argue that the reasonable
royalty established by the jury is supported by the expert testimony presented at trial.
(Doc. 211 at 19-20.)
“A jury’s decision with respect to an award of damages ‘must be upheld unless
the amount is grossly excessive or monstrous, clearly not supported by the evidence, or
based only on speculation or guesswork.’ ” State Contracting & Eng’g Corp. v. Condotte
Am., Inc., 346 F.3d 1057, 1072 (Fed. Cir. 2003) (quoting Brooktree Corp. v. Advanced Micro
Devices, Inc., 977 F.2d 1555, 1580 (Fed. Cir. 1992)).
Plaintiffs presented the expert
testimony of Donald Davis. Mr. Davis’ analysis incorporated all fifteen factors that bear
on a determination of a reasonable royalty as set out by Georgia-Pacific Corp. v. U.S.
Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970). Mr. Davis calculated the reasonable
royalty by considering the Georgia-Pacific factors in relation to a hypothetical negotiation
between Plaintiffs and Defendant. Although the jury found the reasonable royalty to be
substantially less than the reasonable royalty calculated by Mr. Davis, the Court finds
that the jury’s award was not “grossly excessive or clearly unsupported by the
evidence.” See State Contracting, 346 F.3d at 1073 (upholding a jury’s damages award
under similar circumstances).
VI. Punitive nature of damages award
Lastly, Defendant argues that the jury’s award was punitive in nature and
therefore improper under the PVPA.
(Doc. 204 at 15-16.)
Plaintiffs argue that
Defendant’s argument about the punitive nature of the damages award was waived
because it was not raised in Defendant’s oral motion for judgment as a matter of law.
(Doc. 211 at 20.) Plaintiffs assert that, even if not waived, Defendant’s argument fails
because the expert’s testimony supported the jury award even though the award was
less than the reasonable royalty calculated by the expert. (Id.)
To the extent that Defendant’s referenced argument was not waived, the Court
finds that the jury’s damages award was not impermissibly punitive. Notwithstanding
Defendant’s assertion that the reasonable royalty found by the jury was the sum of the
established royalty for AGS 2000, $1.25 per bag, multiplied by 100, the jury’s reasonable
royalty finding was supported by Mr. Davis’ calculation of a reasonable royalty in a
hypothetical negotiation in light of the Georgia-Pacific factors. The $1.25 per bag royalty
is the royalty charged by Plaintiffs when all of their terms and conditions are met.
Here, Defendant admitted that the seeds sold as AGS 2000 to Zelotis Wofford were not
100% AGS 2000. Also, the evidence suggested that the bags of AGS 2000 sold by
Defendant were not properly marked, and did not otherwise conform to the
requirements imposed by Plaintiffs as owners of AGS 2000. Mr. Davis’ hypothetical
negotiation was premised on the actual conditions under which Defendant sold the
brownbag AGS 2000, not the typical conditions that result in a royalty of $1.25 per bag.
Because the Court may only grant a renewed motion for judgment as a matter of law in
instances where there is “no legally sufficient evidentiary basis for a reasonable jury to
find for that party on that issue,” and Mr. Davis’ testimony provides such legally
sufficient evidentiary basis, the Court concludes that the jury’s damages award was not
For the foregoing reasons, Defendant’s Post-Trial Motion for Judgment as a
Matter of Law (Doc. 204) is DENIED.
SO ORDERED, this 20th day of May 2014.
/s/ W. Louis Sands
W. LOUIS SANDS, JUDGE
UNITED STATES DISTRICT COURT
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?