Appellate Court Reaches Decision in Osgata Matter

Chambers of the United States Court of Appeals for the Federal Circuit in Washington D.C.

After years of litigation the Appeals Court for the Federal Circuit has reached a decision in the¬†Osgata matter. Although the ruling affirmed the lower court’s decision (a dismissal of the farmer’s case), it did so after specifically binding the company to its word.

The Court found that while Monsanto has been unwilling to¬†give plaintiff-farmers a covenant not to sue, the company’s explicit statements not to take legal action against growers whose crops might inadvertently¬†contain traces of Monsanto biotech genes was nonetheless legally binding.

“We¬†conclude that Monsanto has disclaimed any intent to¬†sue inadvertent users or sellers of seeds that are inadvertently contaminated with up to one percent of seeds¬†carrying Monsanto‚Äôs patented traits.”

Before the company breaks out the celebratory champagne it’s important to recognize that the ruling not a total loss for plaintiff-farmers. The Court, in essence, has said that the protections farmers seek they obtained from the company.

“While Monsanto‚Äôs representations are not a covenant¬†not to sue, they have a similar effect.” Moreover, the Court warned Monsanto about trying to renege on that promise. “It is well established that a party who successfully argues one¬†position is [prevented] from later adopting a contrary position in a case involving the same patent.”

The Court was also quick to point out that “[a]t oral argument,¬†Monsanto‚Äôs counsel wisely acknowledged that ‘if the court¬†writes an opinion that relies on the representations that I¬†made in my letter, in response to [farmers'] letter, then I think¬†it would be binding as a matter of judicial estoppel.’” In reaching its decision, the Court did, in fact, rely on counsel’s representations in the letter, at oral argument and other public statements made by Monsanto.

The case began in March 29, 2011 when farmers, organic and conventional seed growers and agricultural organizations brought a suit in Southern District Court of New York seeking legal protection from accusations of patent infringement by the agri-giant Monsanto should their fields become contaminated by Monsanto’s GMO seed. See our entire coverage of the lawsuit and the claims raised by plaintiff-farmers here.

In April, plaintiff-farmers, through their counsel, asked Monsanto to give them a written covenant not to sue. Monsanto instead referred plaintiff-farmers to its¬†comments¬†on the company website. The company’s lawyer also wrote a letter¬†stating, among other things, that “Monsanto [...] does not assert and has no¬†intention of asserting patent-infringement claims¬†against your clients.” Plaintiff-farmers felt that a more legally binding promise was needed and continued with the lawsuit.

The Court’s binding of the company to its promise, however, extends only as far as the promise itself, which partly explains why plaintiff-farmers were seeking judicial protection.¬†Monsanto claimed in the case that it has not previously sued¬†“inadvertent infringers.”¬†At oral argument, the Court noted that Monsanto “made clear that its¬†view of what constitutes an ‘inadvertent infringer’ is quite narrow.” From the company’s perspective, an inadvertent infringer does not include those growers whose crops become accidentally contaminated, and who do not treat¬†their fields with Roundup, but who, knowing of the contamination, harvest and replant or sell the seeds.

Even after the Court pressed the company during the hearing, Monsanto resisted the Court’s efforts to clarify whether the company would¬†assert its patents against a conventional grower who¬†inadvertently uses or sells greater than trace amounts (less than one percent)¬†of¬†modified seed, but who, for example, does not make use of¬†the Roundup Ready trait by spraying the plants with¬†glyphosate.

“Thus, we cannot conclude that Monsanto has¬†disclaimed any intent to sue a conventional grower who¬†never buys modified seed, but accumulates greater than¬†trace amounts of modified seed by using or selling contaminated seed from his fields.”

That will probably be litigation for another day. For now, the Court legally bound¬†Monsanto to its representations not to sue and therefore affirmed the lower court’s dismissal because the risk of suit against the farmer-plaintiff as users or sellers¬†of trace amounts (less than one percent) of modified seed has been removed.

According to Osgata’s press release, plaintiff-farmers are considering whether to appeal the case to the Supreme Court.