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 Autrey 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 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 2 products 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 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 2 2007 1104 3 purchased 645 units 3 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 the vast majority of his soybean crop for the year Monsanto argued that that purchase was merely David s attempt to convince Monsanto that he had purchased enough Roundup Ready seed to plant his crops and that he had not saved any seed 3 Roundup Ready soybeans are typically sold in fifty pound units while conventional seeds typically are sold in sixty pound bushels
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