THE two biggest players in the global seed and trait business agreed last week to a series of licensing agreements involving soybean technologies, settling suits against one another claiming various patent and antitrust issues.
Among the largest implications of the settlement is that it will set aside a $1 billion verdict a jury awarded Monsanto last August in the company's claim that DuPont infringed upon its patented Roundup Ready technology (Feedstuffs, Aug. 6, 2012).
Under terms of the settlement, DuPont will pay a minimum of $1.75 billion in royalty payments to Monsanto for the use of its technology.
Through a multiyear, royalty-bearing license, DuPont will be able to offer Monsanto's Geunity Roundup Ready 2 Yield soybean technology in the U.S. and Canada as early as 2014 and Genuity Roundup Ready 2 Xtend glyphosate- and dicamba-tolerant soybeans as soon as 2015. The company will also have regulatory data rights to soybean and corn traits previously licensed from Monsanto, allowing DuPont to create a broad array of stacked-trait seed products using traits and genetics from DuPont Pioneer or other technology licensers.
In addition to royalty payments, Monsanto will receive access to certain DuPont Pioneer patents covering traits for disease resistance and corn defoliation.
DuPont Pioneer president Paul Schickler said the agreement was a good move for his company.
"This technology exchange helps both companies expand the range of innovative solutions we can offer farmers and to do so faster than either of us could alone," he explained. "The agreements broaden the Pioneer soybean lineup. Importantly, they give us greater flexibility in developing combinations of genetics and traits to help feed an increasingly crowded planet."
According to the terms of the agreements, DuPont will make a series of four annual upfront royalty payments totaling $802 million, starting in 2014. These payments are related to trait technology, associated data and soybean lines to support commercial introduction.
Beginning in 2018, the company will pay variable royalty payments on a per-unit basis of Genuity Roundup Ready 2 Yield and Genuity Roundup 2 Xtend for continued technology access. The payments will continue for the life of the agreements, subject to annual minimum payments through 2023 totaling $950 million.
The jury verdict from last August had found that DuPont had "willfully infringed" upon Monsanto's patents, which DuPont strongly contested. It had filed a separate antitrust case against Monsanto. Both sides agreed to drop their respective suits as part of the current settlement.