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Reasonable Royalty for Saving Infringing Seed Exceeds Established Technology Fee

By William F. Heinze

In Monsanto v. David (February 5, 2008), the Federal Circuit rejected an argument that the $7.75 "technology fee" (for each sack of genetically-altered soybeans purchased) was an established reasonable royalty for the infringing act of saving seed:

At trial, Monsanto?s expert testified that after applying the multi-factor Georgia Pacific test he calculated a reasonable royalty for David?s infringement at $66 per bag. The district court, however, relying on this court?s decision in Ralph, awarded a $55.04 royalty instead. David, 448 F. Supp. 2d at 1093; see Ralph 382 F.3d at 1383. David?s argument that the court should have adopted the technology fee paid on each purchase of Roundup Ready® soybean has come before this court previously in both Ralph and McFarling III. As in those cases, we reject the argument here. Ralph held that the Technology Fee is "not an established royalty for planting . . . saved seed." Ralph, 382 F.3d at 1384. David argues that his case is distinguishable from Ralph due to the fact that there is no evidence that David, unlike Ralph, transferred seed to others. Regardless of any perceived difference in the relative levels of culpability between David and Ralph, our decision in Ralph stands for the fact that the technology Fee is not an established royalty for the infringing act of saving seed. As for the specifics of this case, the district court was within its discretion to rely on the only reasonable testimony presented to it, that of Monsanto?s expert. Furthermore, we do not see how the court?s reduction of the royalty from $66.00 to $55.04 implicates the doctrine of collateral estoppel. We therefore uphold the district court?s finding of a royalty of $55.04 per unit.

Full post as published by I/P Updates on February 13, 2008 (boomark / email).