UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
BOARD OF REGENTS OF THE
UNIVERSITY OF NEBRASKA,
Case No. 4:04 CV 3356 RGK/DLP
Plaintiff,
INTERVENING DEFENDANT
SYNGENTA CROP PROTECTION
INC.’S TRIAL BRIEF
v.
BASF CORPORATION,
Defendant,
and
MONSANTO COMPANY,
Intervening
Plaintiff,
and
SYNGENTA CROP PROTECTION,
INC.,
Intervening
Defendant.
INTRODUCTION
While the underlying technology in this case is complicated, the basic issue is not:
A deal is a deal. Sandoz Agro, Inc. (“Sandoz”), now Syngenta, and the University of
Nebraska-Lincoln (“UNL”) made a deal that they would work together to develop the
technology at issue in this case. Sandoz lived up to its obligations. The University did
not. Instead, encouraged by profit motive, it disavowed it obligations to Sandoz and,
instead, the University twice auctioned the fruits of the parties’ joint labor off to the
highest bidder—first UAP and then later Monsanto. As a result, the University has
enjoyed a windfall while Sandoz was denied the benefits of its bargain.
Syngenta intervened in this action to protect its non-exclusive license rights under
the contract between Sandoz and UNL (the “Contract”), and its ownership rights to the
dicamba-resistance technology under the Contract and under the patent laws. Under the
patent law, Syngenta is entitled to joint ownership of the patents at issue if its employees
substantially contributed to the development of those patents.
These rights are
independent of any contractual obligation, but as a joint inventor, Syngenta is entitled to
sole ownership of those patents under the terms of the Contract.
By contrast, the
Contract provides broader ownership rights for inventions jointly made by Sandoz and
UNL, even if they do not rise to the level of “joint inventorship” under the patent law.
Under either theory or both theories, Syngenta is the owner. Syngenta requests that the
Court require UNL to abide by the terms of the Contract and the patent laws, and provide
Syngenta with the fruits of the Contract.
ARGUMENT
I. UNDER THE UNDISPUTED TERMS OF THE SANDOZ/UNL CONTRACT,
SANDOZ IS THE OWNER OF THE TECHNOLOGY DEVELOPED UNDER
THE CONTRACT
That UNL made a deal with Sandoz is uncontroverted. Nor is there a dispute as to
the basic terms of that deal. UNL entered into a contract under which Sandoz funded Dr.
Weeks’ lab in exchange for a non-exclusive license to the technology as well as
ownership of that technology under two scenarios: (1) If Sandoz and UNL were joint
inventors on any patents arising out of their work, then Sandoz would own those patents;
2
and (2) if Sandoz and UNL scientists jointly made inventions (not limited to patents)
through their collaboration then Sandoz would own those inventions.
The evidence will show that by the time the Contract expired in March 1997, UNL
and Sandoz had made significant progress toward the goal of producing dicambaresistant plants. In fact, some of Sandoz’s progress and contributions to this goal, as
discussed in greater detail below, are reflected in what became the claims in the Weeks
patents held by UNL. By late 1996, Sandoz divested its U.S. and Canadian dicamba
business by selling specified assets to BASF under an Asset Purchase Agreement. 1 At
the same time, however, Sandoz retained robust post-expiration rights under the Contract,
including the ownership rights it acquired as a joint inventor, as a joint developer, and as
a non-exclusive licensee to the technology.
When UNL learned that Sandoz did not intend to renew its funding, it began to
shop around its technology. In 1997, it opened the bidding to UAP and BASF, taking the
highest bid from UAP.2 At approximately the same time, UNL began to seek patent
protection for the technology it had developed with Sandoz.
Weeks immediately
recognized that, under the terms of the Contract, UNL had a duty to provide Sandoz with
copies of the materials relevant to its patent applications. The undisputed evidence will
show that Dr. Weeks acknowledged, in an internal memorandum sent to Vice Chancellor
1
2
Because BASF’s crossclaims against Syngenta relating to rights under the Asset
Purchase Agreement have now been dismissed with prejudice, BASF has waived any
claims that were or could have been encompassed within its crossclaims, including
any claims as to ownership or license rights of dicamba resistance technology under
the Asset Purchase Agreement.
UNL repeated this process again in 2004, this time the bidders were BASF and
Monsanto. Monsanto’s bid substantially exceeded BASF’s and UNL selected it.
3
Don Hellmuth, that the University was obligated to provide Sandoz a complete written
disclosure of its invention. Yet, no disclosure was ever made to Sandoz or BASF. UNL,
apparently seduced by the prospect of huge profits flowing to the University, decided to
say nothing.
The evidence will show that neither before nor after the divestitutre did Sandoz
know that UNL was applying for patents on work that had been performed by Sandoz
and only Sandoz. Had Sandoz known what was in these applications, it could have
addressed that issue at the time in front of the Patent Office under a preponderance of the
evidence standard, rather than before the Court under a clear and convincing standard.
Aware of that fact, the clear conclusion is that UNL remained silent because it did not
want to risk losing its unjustified windfall.
Yet, at the same time UNL seeks to avoid its contractual obligations, it contends
that it is entitled to continue making use of DI-6 bacterium, which Sandoz had permitted
UNL to use during the term of the Contract. The use of DI-6 is covered by a Sandoz
patent. UNL and Monsanto cannot have it both ways. They cannot disavow the Contract
while simultaneously seeking shelter in its provisions.
II. SANDOZ AND DR. WEEKS/UNL COLLABORATED EXTENSIVELY OVER
THE YEARS TO JOINTLY DEVELOP AND INVENT THE SUBJECT
MATTER OF THE CLAIMS OF THE ‘896 PATENT
But that is precisely what Plaintiffs Monsanto and UNL are attempting to do in
this case. Plaintiffs want to renege on the deal by taking the litigation-induced position
that all of Sandoz’s contributions to the development of the dicamba-resistance
technology should be ignored either because: (1) they predate the Contract between the
4
parties and were not, therefore, made pursuant to the Contract; (2) they came after
conception of the claimed inventions; (3) to the extent they came before conception,
because they were “routine” or publicly known; or (4) that Sandoz scientists are not joint
inventors because they did not complete conception. These post hoc rationalizations
focus on hypertechnical—and incorrect—legal assertions to justify UNL’s behavior, but
the real proof comes from what Dr. Weeks, UNL, Sandoz and the Patent Office did and
said long before this lawsuit came to fruition.
The evidence will show: that Dr. Weeks and UNL relied heavily on Sandoz’s prior
work with DI-6; that there was extensive collaboration and communication between UNL
and Sandoz during the term of the Contract and its extensions; and that Sandoz was the
first to achieve the results required by many of the claims of the ‘896 Patent.
A. Sandoz Conducted the Foundational Work on Dicamba Resistance During the
1980s While Dr. Weeks Was at Sandoz
A party may rebut the presumption that the named inventors are the true and only
inventors by providing clear and convincing evidence that it should be a named inventor.
Checkpoint Systems, Inc. v. All-Tag Sec. S.A., 412 F.3d 1331, 1338 (Fed. Cir. 2005).
“Conception is the touchstone for determining inventorship,” Fina Oil, 123 F.3d at 1473,
which requires a definite and permanent idea of how to solve a particular problem.
Burroughs Wellcome, 40 F.3d at 1228. A joint invention is “simply the product of a
collaboration between two or more persons working together to solve the problem
addressed.” Fina Oil, 123 F.3d at 1473. The contribution to that collaboration can be
experimental, Id., and can be to as little as a single limitation of a single claim. Eli Lilly
5
and Co. v. Aradigm Corp., 376 F.3d 1352, 1361-62 (Fed. Cir. 2004); Stern v. Trustee of
Columbia University, 434 F.3d 1375, 1378 (Fed. Cir. 2006). Collaboration need not be
extensive but requires a minimal quantum of awareness of each other’s work. KimberlyClark Corp. v. Proctor & Gamble Distrib., 973 F.2d 911, 917 (Fed. Cir. 1992).
In the mid-1980s, Sandoz scientists Krueger, Butz and Atallah discovered and
characterized a strain of bacteria known as DI-6, which has the ability to metabolize the
broad-leaf herbicide dicamba. Dr. Weeks, the lead named inventor of the ‘896 Patent,
became involved in the DI-6 project at Sandoz. Sandoz’s initial work on DI-6, including
work by Dr. Weeks as an employee of Sandoz, continued for several years. During this
time, the Sandoz team made the critical breakthroughs suggesting the feasibility that the
DI-6 bacteria could be used to transform higher plants to impart dicamba resistance. The
Sandoz team proceeded to map out a strategy for how it would isolate the genes
responsible for degrading dicamba and transform plants to make them resistant to the
herbicide.
Funding for the dicamba project at Sandoz dried up in the late eighties, and Dr.
Weeks left Sandoz to join the faculty at UNL in late 1989. The evidence will show that
when he left, Dr. Weeks took many of the confidential, internal research reports related to
Sandoz’s work on dicamba-resistance, including the documents outlining the strategy for
imparting dicamba-resistance in plants. The evidence will show that Dr. Weeks used
those materials to continue work on the dicamba project at UNL.
The work of Sandoz during the 1980s significantly contributed to the subject
matter of the claims that later issued in the ‘896 Patent. Plaintiffs argue that Sandoz’s
6
contributions during the 1980s should not count for purposes of determining whether
Sandoz is a joint inventor or developer of the ‘896 Patent3 because those contributions
pre-date the Sandoz-UNL Contract. This argument is flawed for at least two reasons.
First, statutory joint inventorship rights exist independent of any contractual rights. 35
U.S.C. § 116. Nothing in the statute requires that two or more persons are joint inventors
only if their inventive contributions were made pursuant to a contract.
Indeed,
contributions that differ in kind, scope or time can all be sufficient to qualify as
contributions to joint inventorship. Monsanto Co. v. Kamp, 269 F.Supp. 818, 824 (D.
D.C. 1967). Second, nothing in the contract limits the possibility that each of the parties
would bring pre-existing information that would facilitate further inventions made during
the term of the agreement. Indeed, it was Sandoz’s pre-existing knowledge relating to
dicamba that Dr. Weeks sought when he asked to partner with them.
Plaintiffs further argue that Sandoz’s work in the 1980s should not count because
it later became public.
This is both factually and legally incorrect.
Sandoz’s
contributions were not limited to the information that was publicly disclosed, but
included the knowledge and experience necessary to achieve the objective of developing
dicamba-resistant plants. If all of Sandoz’s knowledge had been in the public domain,
UNL would not have needed the substantial technical assistance that Sandoz provided.
Furthermore, it is legally wrong. A co-inventor’s contribution is not negated by
3
For purposes of this brief, Syngenta solely refers to the ‘896 Patent. The same
arguments apply equally, however, to the ‘724 Patent and the PCT applications
flowing from the same disclosure in that those documents explicitly call out
constructs for the expression of oxygenase in host cells and plants—constructs that
Sandoz designed and prepared.
7
public disclosure of that information. Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed.
Cir. 1998).
B. Dr. Weeks Sought and Obtained Funding and Research Assistance from
Sandoz
1. Sandoz Substantially Contributed to the Conception of the DI-6
Oxygenase DNA Sequence
In addition to the monetary support, Sandoz provided specific, technical
contributions to the conception of claims 1, 2 and 5 of the ‘896 Patent both during the
1980s (as described above) and also under the Contract. For instance, the evidence will
show that prior to conception, Sandoz contributed to the isolation and sequencing of the
oxygenase gene by advising UNL on protein purification. In addition, Patricia Herman,
who was the individual in Dr. Weeks’ lab responsible for identifying the oxygenase
sequence, did not have a definite and permanent idea—that is, conception—of the final
gene sequence until April 30, 1996. Prior to that time, Sandoz provided assistance to Dr.
Herman by identifying errors in the nucleotide sequence for the oxygenase gene. In
particular, Sandoz performed restriction digests in preparation for building expression
constructs for the oxygenase gene. It then performed in vitro experiments to establish
that the cloned gene fragment not only produced a protein, but a protein of the anticipated
length. This work encouraged UNL to continue further sequencing the gene fragment
and to ultimately obtain the full sequence.
Plaintiffs argue that Sandoz is not a joint inventor of the ‘896 Patent because no
one from Sandoz was present when the final, complete gene sequence was isolated.
Plaintiffs’ argument is legally flawed. Plaintiffs mistakenly read the law which states that
8
conception of a DNA sequence is not complete until it has been fully isolated and
identified with the notion that the only contribution of import is the moment that the final
sequence is isolated. This is wrong. Just because a contribution occurs prior to the
moment of conception does not mean that an inventor loses his status as a joint inventor.
Rhone-Poulenc Agro v. Monsanto Co., 445 F. Supp.2d 531, 547 (M.D.N.C. 2006); Fina
Oil & Chem. v. Ewen, 123 F.3d 1466, 1474 (Fed. Cir. 1997). Sandoz’s work in providing
a road map of how to isolate the gene sequence through protein purification and in
assisting with the identification of the DI-6 oxygenase gene sequence were substantial
contributions that should not be negated merely because Sandoz inventors were not
present when Dr. Herman obtained the final oxygenase sequence.
2. Sandoz Substantially Contributed to the Conception of the Claims
Pertaining to the Expression of Oxygenase in Transgenic Host Cells and
Plants
Sandoz also made significant contributions to the remaining claims of the ‘896
Patent. Claims 3, 4, 6 and 7 of the ‘896 Patent claim priority to the provisional
application filed by UNL. They are directed to the detection of oxygenase expression in
host cells. Prior to the filing of the provisional application of the ‘896 Patent, on April 4,
1997, UNL had not detected expression of the oxygenase gene in host cells.
The
evidence will show that after it filed the ‘896 Patent application, UNL was unable to
detect the expression of oxygenase in host cells even though Sandoz had succeeded in
achieving the results required by claims 3, 4, 6 and 7 and communicated the results of its
work to UNL a year before UNL filed its patent applications.
9
Without any
acknowledgement of Sandoz’s contribution, UNL claimed credit for this work in the
Patent Office.
The same is true of the claims directed to plants.
As of the filing of the
provisional application, UNL had not: (1) transformed a single plant with the oxygenase
gene as required by claims 9 and 10; (2) prepared constructs to express the oxygenase
gene in plants as required by claims 8, 11 and 12; or (3) selected for plant cells by either
using a medium containing dicamba as required in claim 13. The evidence will show that
Sandoz had either accomplished or removed major obstacles to accomplishment of these
milestones prior to the time UNL filed its patent applications in April 1997.
Plaintiffs do not dispute that Sandoz achieved these milestones prior to the time
that it filed the ‘896 provisional application. Rather, Plaintiffs contend that Sandoz’s
myriad contributions, which were explicitly claimed as inventions by UNL in the ‘896
Patent, should not count because the only real “inventive” activity was obtaining the
sequence for the oxygenase gene.
To wit, Plaintiffs contend that conception was
complete once UNL had the DNA sequence and that all of the contributions made by
Sandoz after the sequence was identified were “routine” and therefore not worthy of joint
inventorship.
The evidence will also show that the patent examiner who was involved in the
prosecution of the ‘896 Patent was reluctant to allow the claims of the patent because the
field of genetic engineering is unpredictable and, therefore, conception requires the
results required by the claims. Amgen, Inc. v. Chugai Pharmaceutical Co., Ltd., 927
F.2d 1200, 1206 (Fed. Cir. 1991). Indeed, Dr. Herman admitted that, short of actually
10
inserting a bacterial gene into a plant, there can be no definite and firm idea of how to
achieve the results required by the claims.
In order to overcome the patent examiner’s concerns, the evidence will show that
UNL was required to provide proof of the same kind of work that Sandoz had
completed—but had not been disclosed to the Patent Office—prior to filing. UNL knew
that the claimed results could be achieved precisely because Sandoz had already
demonstrated such success.
Although Plaintiffs now claim that the DNA sequence—by itself—was sufficient
to enable a person of ordinary skill in the art to reduce to practice the remaining claimed
inventions, and hence evidence conception, the contemporaneous facts belie that
assertion.
Proof of conception requires “a definite and permanent reflection of the
complete idea as it will be used in practice.” Burroughs Wellcome Co. v. Bar Labs., Inc.,
40 F.3d 1223, 1228 (Fed. Cir. 1994); Invitrogen v. Clontech Labs., Inc., 429 F.3d 1052,
1064 n.8 (Fed. Cir. 2005).
The facts will show that even after Sandoz had achieved success in obtaining
expression of oxygenase in transgenic host cells before UNL filed, UNL was unable to
obtain expression of the oxygenase gene when they prepared their own expression
construct after the filing of the ‘896 Patent application. It is disingenuous for Plaintiffs to
now argue that the contributions provided by Sandoz were “routine” when Dr. Weeks and
UNL could not reduce those claims to practice without significant experimentation. (“A
conception is not complete if the subsequent course of experimentation, especially
experimental failures, reveals uncertainty that so undermines the specificity of the
11
inventor’s idea that it is not yet a definite and permanent reflection of the complete idea
as it will be used in practice.” Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052,
1064 (Fed. Cir. 2005) (quoting Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d
1223, 1229 (Fed. Cir. 1994).
Plaintiffs now contend that Sandoz’s contributions were “routine,” but have not
provided a shred of evidence to corroborate a date of conception by UNL that pre-dates
the contributions by Sandoz scientists.
Lacking any evidence to corroborate that
conception was complete prior to the time it filed its patent applications, UNL’s claim
that it is the true and sole inventor of the ‘896 Patent fails. Price v. Symsek, 988 F.2d
1187, 1194-95 (Fed. Cir. 1993); Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1171
(Fed. Cir. 2006). It is only now, in litigation, that Plaintiffs contend that Sandoz’s
contributions were “routine.”
C. Sandoz Jointly Made the Inventions Disclosed in the ‘896 Patent Under the
Terms of the Sandoz Agro-UNL Contract Regardless of Whether it is a Joint
Inventor under Patent law
The operative language of the Sandoz-Agro-UNL Contract provides that, “Title to
inventions including know-how or resulting patents made jointly by UNIVERSITY and
SPONSOR personnel shall be assigned to SPONSOR . . .” Contract § 10. State law
governs the interpretation of contracts relating to the ownership of patent rights. Jim
Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997); Consolidated
World Housewares, Inc. v. Finkle, 831 F.2d 261, 265 (Fed. Cir. 1987).. Nebraska law
requires that a court first determine whether a contract is ambiguous. Eagle Run Square
II, L.L.C. v. Lamar’s Donuts Intern., Inc., 740 N.W.2d 43, 48-49 (Neb. Ct. App. 2007).
12
If the contract is clear on its face, “then the intentions of the parties must be determined
from the contract itself.” Id.
Regardless of whether Sandoz is a joint inventor for purposes of patent law,
Sandoz and UNL entered into a contract that provides that all inventions made jointly,
including but not limited to patents, were to be disclosed and assigned to Sandoz. The
contract in this case is clear that the scope of assignment under the contract is broader
than the language of the patent statute. That is, because the inventions set forth in the
contract are broader than just patented inventions, there is no reason to assume that the
parties meant to be limited to the definition of joint inventorship under the Patent Act.
Indeed, the courts have repeatedly affirmed that parties may contract to a lower standard
for assignment of inventions beneath what is required for the Patent Office to identify a
party as a joint inventor. See, e.g., Sunbeam Products, Inc. v. Wing Shing Products (BVI)
Lts, 311 B.R. 378, 392-93 (S.D.N.Y. 2004); American Tel. and Tel. Co. v. Integrated
Network Corp., 972 F.3d 1321, 1324 (Fed. Cir. 1992).
The evidence will show that, at a minimum, Sandoz jointly made the inventions
that were patented in the ‘896 Patent. Plaintiffs’ attempts to suggest that Sandoz was not
at least a co-developer of the patented inventions are merely post-hoc rationalizations to
justify its own failure to notify Sandoz of its decision to exclude Sandoz personnel as
inventors in filing the patent. The Court should reject Plaintiffs arguments for what they
are—litigation-induced necessities. A deal is a deal. Sandoz substantially contributed to
the invention of the ‘896 Patent. As such, it is entitled to the statutory and contractual
benefits of its labor.
13
III.
SYNGENTA HAS NON-EXCLUSIVE LICENSE RIGHTS UNDER
THE CONTRACT
In addition to the ownership interests discussed above, Syngenta is entitled to a
declaration that it has an irrevocable, world-wide, fully paid up, unrestricted, nonexclusive license, with the full right to sublicense, the dicamba-resistance technology.
A.
The Contract Grants Non-Exclusive License Rights
Section 10 of the Contract provides:
In return for the significant funding provided, UNIVERSITY hereby grants
to SPONSOR an irrevocable, world-wide, fully paid up, unrestricted, nonexclusive license with the full right to sublicense to make, have made, use
or sell any invention including know-how and resulting patents in the field
of crops resistant to dicamba and all genetic material related to deriving
dicamba resistance to which UNIVERSITY has any right, title and/or
interest in accordance with this CONTRACT.
(hereinafter, the “Sandoz Agro/UNL License”). SPONSOR was defined in the Contract
as Sandoz Agro, Inc., and its “Affiliated companies.” Thus, pursuant to the Contract,
Sandoz Agro and its Affiliated companies are entitled to a world-wide, non-exclusive
license to the dicamba-resistance technology.
B.
Syngenta is an “Affiliated company” of Sandoz Agro
Syngenta is entitled to the same world-wide, non-exclusive license to the dicambaresistance technology because Syngenta is an affiliate of Sandoz Agro. The evidence will
show that Syngenta became an affiliate of Sandoz Agro in December 1996, when they
both became wholly owned by the same parent. Sandoz Agro had funded the Contract
through March 1, 1997. Accordingly, Syngenta became an affiliate of Sandoz Agro
while the Contract was still being funded by Sandoz Agro.
14
C.
The Contract Applies to After-Created Affiliates
The Court has held that the term “Affiliated companies” is ambiguous as to
whether the Contract was intended to apply to Sandoz Agro affiliates that did not exist on
the date the Contract was executed. (November 6, 2007, Order, Doc. #343). UNL would
have the Court revise the Contract to add the words “in existence at the time of the
execution of this Contract” after the words “Affiliated companies.” The Court may not
rewrite the Contract, of course, and there is nothing on the face of the Contract -- which
was apparently drafted by UNL—that would suggest that the parties intended, but forgot,
to include the limiting language UNL now seeks to impose.
Other courts, faced with the same issue, look to the terms of the contract and
determine whether or not the contract was an ongoing contract that would have future
benefits to the parties and thus should apply to future affiliated companies.
See
Insurance Company of North America v. Raymond E. Kelley, Inc., No. 6878/91, slip op.
(Sup. Ct. N.Y. County Nov. 12, 1991) (Attached as Exhibit A); Seaboard Surety
Company v. Crane and Company, Inc., 1999 WL 58675 (S.D.N.Y. Feb. 5, 1999)
(Attached as Exhibit B); and GTE Wireless, Inc. v. Cellexis International, Inc., 341 F.3d
1 (1st Cir. 2003).
In this case, as in Raymond E. Kelley and Seaboard, the Contract is an ongoing
contract that would have future benefits to the parties, and the Contract specifically
contemplated future actions from both parties. UNL and Sandoz Agro agreed to perform
research into dicamba resistant crop plants in the future and Sandoz Agro was going to
pay specified sums to UNL through March 1, 1997, and an additional $100,000 upon first
15
market introduction of a dicamba resistant crop seed. Thus, it is appropriate to read the
Contract as contemplating and encompassing future “Affiliated companies” of Sandoz
Agro since Sandoz Agro was going to perform research in the future and was required to
make payments in the future.
Further, at the time the Contract was entered into, there were no immediate
benefits for Sandoz Agro. The dicamba-resistance technology was still being developed.
All of the fruits of the Contract for Sandoz Agro and its “Affiliated companies” would
ripen in the future, upon the first market introduction of a dicamba-resistant crop seed.
This was not a one-time payment contract with no future obligations or benefits such that
the term “Affiliated companies” could fairly be read by either party to be limited to those
affiliates existing at the time the Contract was executed. In addition, nearly all of the
Contract provisions, as in Raymond E. Kelley and Seaboard, are broadly worded and not
limited to Sandoz Agro affiliates that existed in 1993. There are simply no terms in the
Contract that can be read to limit Sandoz Agro’s “Affiliated companies” to affiliates that
existed on the date the Contract was executed. The Contract was for future research with
future payments from Sandoz Agro resulting in future non-exclusive license and potential
ownership rights.
IV.
SYNGENTA OBTAINED NON-EXCLUSIVE LICENSE RIGHTS IN
THE 2008 LICENSE AGREEMENT BETWEEN SYNGENTA
SEEDS, INC. AND SYNGENTA CROP PROTECTION, INC
Syngenta recently obtained the same non-exclusive license rights discussed above
via a sublicense from Syngenta Seeds, Inc., an affiliate of Sandoz Agro that existed and
was known to UNL in 1993 when the Contract was executed. Thus, the Court may and
16
should find that Syngenta has non-exclusive license rights even if the Court accepts
UNL’s tortured interpretation of the term “Affiliated companies” to include only those
companies that were affiliated with Sandoz Agro on the date the Contract was executed.
In 1993, Syngenta Seeds, Inc. was called Northup King Company. Northrup King
and Sandoz Agro were sister, or sibling corporations, both wholly owned by the same
parent – Sandoz Corporation. Thus, even under UNL’s restrictive interpretation of the
Contract, Northrup King would have the same rights as Sandoz Agro. The evidence will
show that Syngenta Seeds Inc. and Northup King Company are one and the same, the
only change being one of name. Accordingly, Northrup King/Syngenta Seeds Inc. is still
entitled to all of the rights under the Contract as an “Affiliated company” of Sandoz Agro
that existed at the time the Contract was executed, including the right to a world-wide,
non-exclusive license with the full right to sublicense. The evidence will also show that
UNL knew about the existence of Northrup King at the time the Contract was signed in
1993 and before.
On October 21, 2008, Syngenta Seeds, Inc. and Syngenta Crop Protection, Inc.
entered into a License Agreement. In the License Agreement, Syngenta Seeds licensed
all rights it owns pursuant to the Contract and sublicensed all of its licensed rights under
the Contract to Syngenta Crop Protection, Inc. Thus, in addition to its own rights as an
Affiliated company of Sandoz Agro, Syngenta has the world-wide, non-exclusive license
rights identified in Section 10 of the Contract via its License Agreement with Northrup
King, a Sandoz Agro affiliate that existed and was an affiliate of Sandoz Agro in 1993.
The 2008 License Agreement between Syngenta Seeds and Syngenta moots UNL’s
17
argument that Syngenta cannot have non-exclusive license rights under the Contract
because Syngenta was not an affiliate of Sandoz Agro in 1993.
The October 2008 License Agreement should be received and considered by the
Court as the License Agreement was timely produced to all parties.
The License
Agreement was executed on October 21, 2008 and it was produced to the parties the very
next day—on October 22, 2008. The License Agreement could not have been produced
to the parties any sooner than it was.
V.
MONSANTO HAS NO RIGHTS UNDER ITS CONTRACT IF
SYNGENTA OWNS THE PATENTS
Syngenta seeks a declaration that Monsanto has no rights under its contract with
UNL if the Court determines that Syngenta owns the dicamba-resistance U.S. patents and
foreign counterparts. Monsanto’s argument that it would retain its exclusive license
because it is a bona fide purchase for value without notice has no merit. Monsanto had
notice that claims were being made and Monsanto knew that UNL had previously entered
into a Contract with Sandoz Agro for the same technology. This issue is still ripe for trial
as the Court denied Monsanto’s motion as to Syngenta.
See November 16, 2007,
Memorandum and Order (Doc. #343) at 34 (“…(2) Monsanto’s 2005 exclusive patent
license from the University cannot be voided by BASF (GRANTED) and Syngenta’s
(DENIED) later-asserted ownership claims because Monsanto’s exclusive license was
acquired for valuable consideration with no notice of those claims.”).
18
VI.
UNL BREACHED THE CONTRACT AND SYNGENTA IS
ENTITLED TO ROYALTIES PAID BY MONSANTO TO UNL
IN THE PAST AND IN THE FUTURE
If the Court, for all the reasons discussed above, determines that Syngenta has an
ownership interest in the dicamba-resistance technology, then necessarily, UNL has
breached the Contract. As set forth in Syngenta’s First Amended Counterclaim, UNL
breached its Contract with Sandoz Agro by granting a license to Monsanto which it had
no right to provide. In addition, UNL necessarily breached the Contract when UNL
failed to assign the issued ‘896 and ‘724 patents, as well as any foreign counterparts, to
Syngenta pursuant to Section 10 of the Contract. As damages for UNL’s breach of the
Contract, Syngenta seeks all payments that Monsanto has made to UNL for the dicamba
resistant technology; and, if the Court finds that Monsanto’s license agreement with UNL
remains in force (for whatever reason), all future license or royalty payments by
Monsanto to UNL.4
In a breach of contract case, the ultimate objective of a damages award is to put
the injured party in the same position the injured party would have occupied if the
contract had been performed, that is, to make the injured party whole. Aon Consulting,
Inc. v. Midlands Financial Benefits, Inc., 748 N.W.2d 626, 655 (Neb. 2008); MBH, Inc.
v. John Otte Oil & Propane, 727 N.W.2d 238, 247 (2007). In a case involving a breach
of contract, the proper measure of damages is an amount which will compensate the
injured party for loss which fulfillment of the contract would have prevented or breach of
4
Syngenta’s disclosure that it sought these damages are set forth in the damages report of
its damages expert, Timothy Nantell.
19
it has entailed. MBH, Inc., 727 N.W.2d at 247. In this case, had the Contract not been
breached by UNL, then Syngenta would have been free to enter into the Contract with
Monsanto and receive the same compensation and royalties. Thus, Syngenta requests
that the Court simply put Syngenta into UNL’s shoes and allow it to receive, as its
damages, the royalties and revenues from the UNL/Monsanto Contract, including any
future royalties if the Court leaves the Monsanto/UNL License Agreement intact.
VII.
SYNGENTA HAS RIGHTS UNDER THE 1995 OPTION
Syngenta is entitled to a declaration that the 1995 Option is valid and that
Syngenta has an “option to a corresponding worldwide exclusive royalty bearing license
to the same subject matter outside the field of dicamba resistant crop plants.”
VIII. PLAINTIFFS AFFIRMATIVE DEFENSES ARE INAPPLICABLE OR
UNSUPPORTED
Plaintiffs allege that Syngenta’s joint inventorship claims are barred by the statute
of limitations, laches, estoppel, and waiver. These defenses are either inapplicable,
unsupported by admissible evidence, or both. Plaintiffs’ arguments on these issues must
fail, as discussed in detail in Syngenta’s Brief in Response to Plaintiffs’ Motions for
Summary Judgment (Doc. #440 at 136-147), and in Syngenta’s Reply Brief in Support of
its Motion for Summary Judgment (Doc. #452 at 22-31).
CONCLUSION
For the foregoing reasons, Syngenta respectfully requests that the Court grant
Syngenta the relief requested in Syngenta’s Answer and Counterclaims in Intervention.
20
Dated: November 10, 2008
SYNGENTA CROP PROTECTION, INC.,
Intervening Defendant
By: ____________________________
John P. Passarelli #16018
James M. Sulentic #19610
KUTAK ROCK LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102-2186
(402) 346-6000
DORSEY & WHITNEY LLP
Steven J. Wells
Ronald J. Brown
Christopher M. Ryan
Suite 1500, 50 South Sixth Street
Minneapolis, MN 55402-1498
Telephone: (612) 340-2600
Attorneys for Intervening Defendant
Syngenta Crop Protection, Inc.
21