Friday, March 30, 2012

District Court Sees through Misleading Allegations in PubPat Lawsuit against Monsanto

In a recent post, I pointed out similarities between "fabrications" regarding conditions at factories in China manufacturing Apple products, and the misinformation being promulgated regarding gene patents and agricultural biotechnology. Some prime examples of this sort of misleading information are evident, I think, in the lawsuit filed last year by the Public Patent Foundation against Monsanto. In a post on the case, I pointed out that the plaintiffs in the case seemed to lack standing, and that there seemed to be no basis for PubPat’s allegation that Monsanto had sued involuntary/inadvertent infringers, or that there was any reasonable likelihood that the plaintiffs (organic farmers and the like) would be sued for infringing Monsanto patents on recombinant crops.


Fortunately, the district court saw through the exaggerated allegations raised by the Public Patent Foundation in the lawsuit against Monsanto, and dismissed the case last February. The court's decision specifically addresses some of these unfounded assertions.

For example, the complaint alleges that certain plaintiff farmers and seed distributors were afraid that their crops and seeds would be contaminated by recombinant Monsanto products. In rejecting this argument, the court pointed out that none of the plaintiffs claimed that contamination had actually occurred in any of the crops they had grown or seeds they have sold.

The complaint further alleged that organic farmers risked losing their organic certification if their fields became contaminated by recombinant product, but the court found “no evidence in the record that any farmer has ever been decertified as organic by the U.S. Department of Agriculture National Organic Program (the “NOP”) because of seed contamination.” In fact, according to the NOP, “[o]rganic certification is process based, and as a result, “[i]f all aspects of the organic production or handling process were followed correctly, the presence of a detectable residues from a genetically modified organism alone does not constitute a violation of this regulation.”

The complaint also alleged that the plaintiff farmers risk being sued for patent infringement based on inadvertent growth of crops with Monsanto's patented traits. However, the court found that Monsanto had never filed a patent infringement suit against a certified organic farm or handling operation over the presence of patented traits in its operations. In fact, during oral arguments Monsanto stated that they had never sued the party who did not “want to make use of the traits that are manifested in [defendants’] transgenic products.” The court noted that Monsanto had expressly declared that it is not their policy “to exercise [their] patent rights where trace amounts of our seed or traits are present in [a] farmer’s fields as a result of inadvertent means.” The court went on to find that although the complaint “alleges without specification that defendants have accused certain non-intentional users of Monsanto’s seed of patent infringement and threatened them with [litigation, no] plaintiffs claim to have been so threatened.”

The complaint alleged that the organic farmers feel threatened by the fact that between 1997 and 2010 Monsanto filed 144 patent infringement lawsuits against farmers. However, the court found that plaintiffs had overstated the magnitude of Monsanto's patent enforcement, since this "average of roughly 13 lawsuits per year is hardly significant when compared to the number of farms in the United States, approximately two million."

The plaintiffs alleged that Monsanto had filed patent infringement lawsuits against other farmers who did not want to grow patented crops, citing specific examples where this had allegedly occurred, but the court found that this assertion was:

“belied by the decisions in the suits against the referenced individuals. See Monsanto Co. v. Parr, 545 F. Supp. 2d 836, 842-44 (N.D. Ind. 2008) (defendant intentionally induced others to infringe Monsanto’s patents); Monsanto Co. v. Nelson, No. 4:00-CV-1636, 2001 U.S. Dist. LEXIS 25132, at *2 (E.D. Mo. Sept. 10, 2001) (Monsanto alleged that defendants had intentionally saved and replanted second generation seed with patented traits in violation of their licensing agreement); Monsanto Can. Inc. v. Schmeiser, 2001 FCT 256 [120] (Can.) (finding that the defendant saved and planted seed “he knew or ought to have known was Roundup tolerant”).”

I found it particularly gratifying that the court addressed the widely held misperception that Percy Schmeiser, a Canadian farmer who took Monsanto to the Canadian Supreme Court (and lost) and became somewhat of a folk hero in the process, was an innocent victim whose fields were contaminated by Monsanto product. If you actually read the decisions from the Canadian courts, it is very clear that the court was convinced that Schmeiser had actively selected for and cultivated Monsanto Roundup ready seeds on his property without authorization and without paying any licensing fee (see my previous post).

The court was particularly critical of the Public Patent Foundation’s characterization of an attempt by Monsanto to reassure organic farmers that they would not be sued for inadvertent infringement as an "implicit threat" by Monsanto. The Public Patent Foundation had written a letter to Monsanto basically asking for a blanket immunity for all the plaintiffs against ever being sued for patent infringement, even if they did intentionally engage in infringing activity. Monsanto responded with a statement of its policy, which it had previously published in other venues:

“It has never been, nor will it be[,] Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in [a] farmer’s fields as a result of inadvertent means.”

Amazingly, the Public Patent Foundation characterized Monsanto's statement as an implicit threat, and as such the basis for declaratory judgment action.

The court totally rejected this flawed logic, declaring it "objectively unreasonable for plaintiffs to read [the language of Monsanto statement] as a threat." The court also stated that,

"[i]ndeed, plaintiffs’ letter to defendants seems to have been nothing more than an attempt to create a controversy where none exists. This effort to convert a statement that defendants have no intention of bringing suit into grounds for maintaining a case, if accepted, would disincentivize patentees from ever attempting to provide comfort to those whom they do not intend to sue, behavior which should be countenanced and encouraged. In contrast, plaintiffs’ argument is baseless and their tactics not to be tolerated.”
It bears noting that critics of Myriad Genetics have repeatedly complained that Myriad should make an explicit statement that the company promises not to sue entities that infringe its BRCA patents in the context of research or non-commercial testing. But I've always maintained that Myriad is rightly concerned that such a statement could be used against them. Here we see a perfect example of this, with the Public Patent Foundation using Monsanto's attempt to reassure inadvertent infringers that they will not be sued as a weapon against Monsanto.

The district court in this case, fortunately, rejected the argument, and noted that public policy dictates that companies such as Monsanto should be encouraged to provide such reassurance, not punished, and that the Public Patent Foundation's tactic of using the statement against Monsanto is "not to be tolerated." But with all the advocacy groups out there gunning for Myriad, is it any wonder the company would be reluctant to open itself up to the negative unintended consequences of an explicit statement of immunity for some infringers?

8 comments:

Anonymous said...

As a citizen concerned about the health, environmental, ethical, and socio-economic hazards of Genetically Modified Organisms (GMOs) and industrial-scale factory farms or CAFOs (Confined Animal Feeding Operations), I feel strongly that consumers have an inalienable right to know whether the food we are purchasing likely contains GM ingredients or comes from animals confined in CAFOs.

Up to 90% of U.S. soybeans, corn, cotton, canola, and sugar beets are now genetically engineered and routinely inserted into human and animal foods with no labels or safety testing.

Approximately 80% of current grocery food items contain GMOs; while according to U.S. Department of Agriculture statistics, the majority of beef, pork, poultry, dairy, and eggs come from CAFOs.

Considering the growing concern over GMOs and CAFOs, all food packaging should clearly identify all non-organic ingredients containing soy, corn, cottonseed oil, canola, sugar beets, alfalfa or GM growth hormones with a label or shelf sign that says "May Contain GMOs" and identify all meat, dairy, and eggs that come from CAFOs with a label or shelf sign that says "CAFO."

Sincerely,

Chris Holman
Phoenix, AZ

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