Monsanto Company v. E.I. Dupont De Nemours and Company et al

Filing 1483

MEMORANDUM AND ORDER. (see order for details) IT IS HEREBY ORDERED that evidence that Defendants no longer plan to commercialize RR/OGAT soybeans is inadmissible. Signed by Honorable E. Richard Webber on 07/11/2012. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

MONSANTO COMPANY and
MONSANTO TECHNOLOGY LLC,
Plaintiffs,
vs.
E.I. DU PONT DE NEMOURS AND
COMPANY and PIONEER HI-BRED
INTERNATIONAL,
Defendants.

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Case No. 4:09CV00686 ERW

MEMORANDUM AND ORDER
In the Court’s Order dated June 29, 2012 [ECF No. 1447], the Court ordered the following:
“Defendants shall neither argue nor present any evidence in opening statement or at any other time
throughout the proceedings that Defendants no longer plan to commercialize RR/OGAT soybeans
without first seeking the Court’s permission to advance said arguments.” ECF No.1447 at 8-9.
Before beginning their opening arguments, Defendants properly inquired on whether they may
address the issue of their plans to commercialize RR/OGAT. The issue was whether Defendants’
current lack of intent to commercialize RR/OGAT is relevant to Monsanto’s request for infringement
damages. The Court heard arguments from both parties and ruled that in light of fundamental
fairness, Defendants would be allowed to argue during opening statements that they had no intention
to sell RR/OGAT soybeans. After further examination of the law and the transcript from yesterday’s
oral argument, the Court believes that this ruling is erroneous.
“Upon finding for the claimant the court shall award the claimant damages adequate to
compensate for the infringement, but in no event less than a reasonable royalty for the use made of
the invention by the infringer, together with interest and costs as fixed by the court.” 35 U.S.C. §
284. A reasonable royalty can be calculated from an established royalty, the infringer’s profit

projections for infringing sales, or a hypothetical negotiation between the patentee and infringer
based on the factors in Georgia–Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120
(S.D.N.Y. 1970). Lucent Techs. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009); Minks v.
Polaris Indus., 546 F.3d 1364, 1372 (Fed. Cir. 2008). Monsanto has elected to receive a reasonable
royalty. “[A] reasonable royalty is often determined on the basis of a hypothetical negotiation,
occurring between the parties at the time that infringement began.” Uniloc USA, Inc. v. Microsoft
Corp., 632 F.3d 1292, 1312 (Fed. Cir. 2011) (emphasis added). The hypothetical negotiation
“attempts to ascertain the royalty upon which the parties would have agreed had they successfully
negotiated an agreement just before infringement began[.]” Wordtech Sys., Inc v. Integrated
Networks Solutions, Inc., 609 F.3d 1308, 1319 (Fed. Cir. 2010) (quoting Lucent, 580 F.3d at
1324–25) (emphasis added).

“A reasonable royalty determination for purposes of making a

damages evaluation must relate to the time infringement occurred, and not be an after-the-fact
assessment.” Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1238 (Fed. Cir. 2011) (citing Riles
v. Shell Exploration & Prod. Co., 298 F.3d 1302, 1313 (Fed. Cir. 2002)).
The Federal Circuit has clearly stated that the applicable time frame for the hypothetical
negotiation is the time of infringement. Therefore, Defendants’ present intentions concerning
commercialization of RR/OGAT soybeans are irrelevant and inadmissible under Federal Rule of
Evidence 402. Moreover, the Court finds that any remote probative value of this evidence is greatly
outweighed by the danger of confusing the jury, wasting time, and unfairly prejudicing Monsanto
and would be excluded under Federal Rule of Evidence 403. Therefore, this evidence will be
excluded. The Court, however, will allow Defendants to present evidence that to date, no sale of
RR/OGAT seed has occurred.

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Accordingly,
IT IS HEREBY ORDERED that evidence that Defendants no longer plan to commercialize
RR/OGAT soybeans is inadmissible.
Dated this 11th day of July, 2012.

E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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