United States Court of Appeals for the Federal Circuit 2007-1104 MONSANTO COMPANY, Plaintiff-Appellee, and MONSANTO TECHNOLOGY LLC, Plaintiff-Appellee, v. LOREN DAVID, Defendant-Appellant. Sambhav N. Sankar, Wilmer Cutler Pickering Hale and Dorr LLP, of Washington, DC, argued for plaintiffs-appellees. With him on the brief were Seth P. Waxman, and Paul R.Q. Wolfson. Bruce E. Johnson, Cutler Law Firm, P.C., of West Des Moines, Iowa, argued for defendant-appellant. Appealed from: United States District Court for the Eastern District of Missouri Judge Henry E. AutreyUnited States Court of Appeals for the Federal Circuit 2007-1104 MONSANTO COMPANY Plaintiff-Appellee, and MONSANTO TECHNOLOGY LLC, Plaintiff-Appellee, v. LOREN DAVID, Defendant-Appellant. Appeal from the United States District Court for the Eastern District of Missouri in case no. 4:04-CV-425, Judge Henry E. Autrey. ____________________ DECIDED: February 5, 2008 ____________________ Before LOURIE, BRYSON, and MOORE, Circuit Judges. LOURIE, Circuit Judge. Loren David appeals from the final judgment of the United States District Court for the Eastern District of Missouri. On April 20, 2006, the court held that David knowingly infringed U.S. Patent 5,352,605 (the “’605 patent”), and awarded Monsanto Company and Monsanto Technology LLC (collectively “Monsanto”) compensatory damages in the amount of $226,214.00. Monsanto Co. v. David, 448 F. Supp. 2d 1088,1094 (E.D. Mo. 2006). On July 25, 2006, the court awarded Monsanto attorney fees, prejudgment interest, and costs, bringing the total damages award to $786,989.43. Monsanto Co. v. David, 448 F. Supp. 2d 1095, 1102-03 (E.D. Mo. 2006). Because we hold that the district court correctly held that the ’605 patent was infringed, but find that portions of the damages award were clearly erroneous, we affirm in part, vacate in part, and remand. BACKGROUND One of the many products that Monsanto sells is Roundup® brand herbicide. Glyphosate-based herbicides, such as Roundup®, kill vegetation by inhibiting the metabolic activity of a particular enzyme, common in plants, that is necessary for the conversion of sugars into amino acids. Herbicides that have glyphosate as the active ingredient are non-selective; that is, they kill all types of plants whether the plant is a weed or a crop. In addition to developing and selling herbicides, Monsanto sells other products made using biotechnology. Monsanto has developed Roundup Ready® Technology, which involves inserting a chimeric gene into a seed that allows the plant to advantageously continue to break down sugars in the presence of glyphosate. Crops grown from such seeds are resistant to Roundup® and other glyphosate-based herbicides. When Roundup Ready® seeds are planted and used in conjunction with a glyphosate-based herbicide, Roundup Ready® plants will survive, while weeds and other plants lacking the Roundup Ready® gene will be killed. Monsanto has claimed this technology in the ’605 patent. Roundup Ready® genes have been introduced into numerous agricultural 2007-1104 2products, including soybeans, the subject of the present case. Monsanto licenses seed companies to incorporate the Roundup Ready® genes into their plants and to sell soybean seeds containing the Roundup Ready® gene. All purchasers of such seeds are required to enter into a Technology Agreement that grants them the right to use the seeds. The Technology Agreement stipulates that buyers may use the seeds for the planting of only a single commercial crop, but that no seeds from that crop may be saved for future harvests. The Technology Agreement assures Monsanto that farmers must purchase new Roundup Ready® seeds each harvesting season, rather than simply saving seeds from the prior year’s harvest, as they normally would with conventional soybean seeds. Monsanto also charges a Technology Fee for each unit of Roundup Ready® soybean seeds sold.1 The Technology Agreement also contains a clause granting Monsanto the full amount of its legal fees and other costs that may have to be expended in enforcing the agreement. David is a commercial farmer who owns soybean fields in North and South Dakota. On May 3, 1999, David executed a Monsanto Technology Agreement. In 2003, David planted the contested soybeans at issue in this case.2 Monsanto claims that the seeds that David planted were Roundup Ready® soybeans improperly saved from the previous year’s harvest, but David claims he did not save any Roundup Ready® seed. It is undisputed that, prior to planting his soybean fields in 2003, David 1 The Technology Fee for soybean seeds in 2003 was $7.75 per unit. 2 The 1999 Monsanto Technology Agreement states “this agreement remains in effect until you or Monsanto choose to terminate the Agreement.” Neither party in this appeal contends that the 1999 Agreement was not in effect when David planted his fields in 2003. 2007-1104 3purchased 645 units3 of Roundup Ready® soybean seeds and it is also undisputed that that amount of seeds alone would have been insufficient to completely plant David’s soybean fields in 2003. Also undisputed is the fact that David purchased over 1,000 gallons of glyphosate-based herbicides in 2003, herbicide that would destroy any plants that did not contain the Roundup Ready® gene, and would therefore have destroyed any conventional soybean seeds David planted. At some time in 2003, Monsanto began to suspect that David had saved soybean seed from his previous year’s harvest in violation of the Technology Agreement. In April 2004, after David’s 2003 crop had already been harvested and sold, Monsanto obtained samples of the soybean plant material remaining from some of David’s fields. On the basis of those tests, on April 12, 2004, Monsanto filed suit for patent infringement, breach of contract, unjust enrichment, and conversion, alleging that David had illicitly saved and planted Roundup Ready® seeds. A bench trial was held in February 2006 during which Monsanto presented crop insurance records with planting dates provided by David. In those records, David claimed to have planted nearly all of his soybean fields as of May 6, 2003. Monsanto also presented an invoice from Red River Grain for David’s purchase of 993 units of Roundup Ready® soybean seed on May 31, 2003, nearly a month after David claimed to have planted
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