In a decision that addressed, inter alia, issues of antitrust, patent misuse and the eBay injunction test, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s judgment in favor of Monsanto, but remanded the lower court’s decision granting Monsanto a permanent injunction in light of eBay Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006). Monsanto Co. v. Scruggs, Case Nos. 04-1520, 05-1120, -1121 (Fed. Cir., Aug. 16, 2006) (Mayer, C.J.).
The Monsanto patents at issue related to Roundup Ready and Bollgard/Roundup Ready soybeans and cotton, which are resistant to glyphosate herbicide and certain insects. Monsanto licensed its technology to seed sellers. Although the licenses allowed seed growers to incorporate the Monsanto technology in their germplasm, they also imposed various restrictions on seed sellers as well restrictions on seed growers, including a no-replant policy. Scruggs purchased the seeds from seed companies but did not sign a license agreement. It planted the seeds and, after harvesting the soybeans and cotton, retained the new generation of seeds from which it planted subsequent crops. Monsanto filed suit for patent infringement and the trial court issued a preliminary injunction. Scruggs asserted, inter alia, antitrust and patent misuse defenses. Monsanto filed for, and the trial court granted, summary judgment on infringement and the antirust and patent misuse defenses. The trial court also issued a permanent injunction in favor of Monsanto. Scruggs appealed.
The Federal Circuit affirmed the lower court’s grant of summary judgment but reversed the grant of a permanent injunction. With regard to the antitrust and patent misuse issues, Scruggs argued that Monsanto’s grower license agreements, which included an exclusivity provision, a no-replant policy, a no-research policy and the payment of a technology fee, were illegal anticompetitive practices. The Federal Circuit rejected Scruggs’ argument, finding that Monsanto’s practice was a valid exercise of its rights under the patent laws and that Scruggs did not point to any activities falling outside of Monsanto’s patent. With regard to the issuance of a permanent injunction, the Federal Circuit vacated and remanded the decision, stating that eBay required courts to consider the standard four-part test for a permanent injunction in patent cases.
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