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St. Louis, Missouri
March 21, 2001
U.S. District Judge Donald J. Stohr ruled here yesterday that a
license held by DuPont to sell seeds containing Monsanto's Roundup herbicide-tolerant technology was terminated by the
1999 merger between E.I. duPont de Nemours and Company and Pioneer Hi-Bred International Inc.
This decision means that all sales of Roundup Ready soybean and Roundup Ready canola seeds by DuPont's subsidiary
Pioneer since the Oct. 1, 1999, merger were unauthorized, thereby exposing DuPont to a significant damage claim by
Monsanto. A date for the damage trial has not yet been determined. The court noted that "the potential liability of the new
Pioneer is that of a stranger to Monsanto, either for patent infringement or misappropriation of trade secrets."
Pioneer also will need a new license to continue selling Roundup Ready soybeans and Roundup Ready canola, two popular
products within the seed industry because of their widespread adoption by farmers who value their economic and
environmental benefits.
"We hope Pioneer will quickly come to a reasonable arrangement so farmers can continue to have the option of choosing
Roundup Ready technology in Pioneer-brand seeds," said Hendrik A. Verfaillie, Monsanto's chief executive officer and
president.
"This court decision affirms the protection of our valuable intellectual property used in Roundup Ready soybean and canola
products," said Verfaillie. "While we regret that we could not resolve this matter without litigation, we're pleased that the
court agreed that the $8 billion merger of Pioneer with DuPont terminated our original agreement, and that all future sales of
our technology by DuPont and its new Pioneer subsidiary are prohibited."
This ruling affects only Pioneer and DuPont. Other seed companies, including Monsanto's own brands and authorized
licensees, will continue to make Roundup Ready seed technology available to farmers.
Pioneer is expected to appeal the ruling. "Monsanto is confident the carefully written decision by the District Court will be
upheld in any appeal," said David F. Snively, associate general counsel for Monsanto. "The court's ruling simply prohibits
the unauthorized transfer of valuable intellectual property -- a principle that is well-established under patent law."
The court's ruling held that a patent license, like the one held by Pioneer, cannot be transferred without consent. In the
merger proceedings, DuPont extinguished the former Pioneer Hi-Bred International Inc. and formed a new legal Pioneer
entity. The federal court explained in its ruling that "a non-assignable license to a corporation or partnership expires with the
legal death of the corporation or partnership without any successor."
Monsanto Company (NYSE: MON) is a leading global provider of technology- based solutions and agricultural products that
improve farm productivity. For more information on Monsanto, see:
www.monsanto.com.
Company news release
N3398 |
