Monsanto Company v. Mcfarling

363 F.3d 1336 (2004)

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Nature of the Case

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Facts

D executed P's Technology Agreement in connection with the license of 1,000 bags of ROUNDUP READY (R) soybean seed. P requires that seed companies execute licenses, rather than conduct unconditional sales, with their farmer customers. The license allowed D to use P's gene technologies for planting a commercial crop only in a single season. It also required him to not supply any of this seed to any other person or entity for planting and to not save any crop produced from this seed for replanting, or supply saved seed to anyone for replanting. The Technology Agreement also contains a clause specifying damages in the event of breach by the farmer: In the event that the Grower saves, supplies, sells or acquires seed for replant in violation of this Agreement and license restriction, in addition to other remedies available to the technology provider(s), the Grower agrees that damages will include a claim for liquidated damages, which will be based on 120 times the applicable Technology Fee, which was $6.50 per 50-pound bag of seed. D executed P's Technology Agreement in connection with the license of 1,000 bags of ROUNDUP READY (R) soybean seed. D concedes that he saved 1500 bushels of seed from his 1998 crop, enough to plant approximately 1500 acres and that he replanted them in 1999. He subsequently saved 3075 bags of soybeans from his 1999 crop, replanting them in 2000. When D sent his seeds saved from the 1998 season to a third party for cleaning, P had some samples taken, had the genetic makeup of the seeds tested at Mississippi State University, and thus learned that D was saving ROUNDUP READY (R) seeds. P sued D for infringement of the '435 and '605 patents and breach of the Technology Agreement and seeking a preliminary injunction. D did not challenge the validity of P's patents. In part, D raised objections to damages as calculated under the 120-multiplier in the Technology Agreement. The district court granted summary judgment in favor of P on all of D's defenses, it left the damages issue regarding infringement of the '605 patent for trial. It held the liquidated damages clause in the Technology Agreement to be valid and enforceable. After D stipulated that he purchased 1000 bags of ROUNDUP READY (R) soybean seed in 1998, the district court entered final judgment in the amount of $780,000.00 (120 x $6.50 x 1000). D appealed.