Capping a string of trial victories involving one the world's largest life sciences group, lawyers at Connolly Bove Lodge & Hutz in Wilmington have wrapped up a major intellectual property dispute centered around genetically modified Roundup Ready corn.
The three separate trials involving genetically modified crops - a business just four years old - were followed by companies in the biotechnology industry, including the DuPont Co. and Zeneca Ag Products of Wilmington, said company spokesmen and lawyers involved in the case.
"Three out of three ain't bad," said George Pazuniak, lead trial attorney with Connolly Bove, after winning the third jury trial on Sept. 1 for Aventis CropScience against DeKalb Genetics Corp., a seed company owned by the Monsanto Co.
Francis DiGiovanni, an associate with Connolly Bove, joined Pazuniak in the case. Aventis CropScience of Research Triangle Park, N.C., is a unit of Aventis SA, a Franco-German business created by the merger of France's Rhone-Poulenc SA and Germany's Hoechst AG.
After a two-week trial in August in U.S. District Court in Greensboro, N.C., a jury found that five scientists at the former Rhone-Poulenc had contributed significantly to the development of corn seed that is resistant to glyphosate, and that their names should be added to the patent. Glyphosate is the active ingredient Roundup, one of the most successful herbicides ever developed.
Previously, only researchers from DeKalb seed company had been named on the patents covering technology for the Roundup Ready corn, although Rhone-Poulenc researchers had developed and supplied the genetic material that led to its development. With the addition of former Rhone-Poulenc scientists to the patents, Aventis is free to produce its own herbicide-resistant corn seeds.
"We are extremely pleased with this decision and are proud of our inventors as well as the trial team which achieved this result," said Alain Godard, chief executive of Aventis Crop Science. "We are very excited about the possibilities of developing glyphosate-tolerant corn and are actively considering our options."
Genetically-modified corn, both herbicide- and insect-tolerant varieties, represent about 25 percent of total corn acreage in the United States, said Lori J. Fisher, spokeswoman of Monsanto in St. Louis, which acquired DeKalb as a fully owned subsidiary in 1998.
The verdict ended three years of litigation brought by Aventis against DeKalb and Monsanto, which became a subsidiary of Pharmacia Corp. of Peapack, N.J., in April.
Disappointed & Confident
"We're disappointed with this decision, but confident we'll prevail when all the facts are brought forward," said David F. Snively, assistant general counsel-litigation with Monsanto.
Snively said the case would have no bearing on the current or future Roundup Ready corn products offered by 200 regional seed companies.
The case illustrates potential dangers companies could face in collaborating on research in the emerging biotechnology industry, which is roughly 30 years old. The first genetically modified crops were introduced in 1996.
"This is just the sort of thing that happens when everybody's working together and something becomes successful," said David S. Weir, director of the Delaware Biotechnology Institute in Newark and former vice president of DuPont.
Edgar Ready, manager of environmental affairs for Zeneca Ag Products, said cases such as Aventis v. DeKalb and Monsanto could have future implications for biotechnology agrochemical and seed companies in terms of both intellectual property and trade law.
"You just didn't see this kind of dispute five years ago," said Fisher.
According to court records, Rhone-Poulenc and DeKalb began collaborating in 1991 on the development of glyphosate-resistant corn. Rhone-Poulenc did the initial genetic work by creating various genetic constructs, which were handed over to DeKalb to place into corn cells.
"Neither party had the capability to perform the other party's role in this collaboration, and both roles were necessary in order to produce glyphosate resistant corn," reads an opinion by chief Justice N. Carlton Tilley of the Middle District of North Carolina.
DeKalb had agreed to share the results of its testing with Rhone-Poulenc. After a particularly successful field test in Hawaii in the summer of 1994, the report showed that corn plants containing Rhone-Poulenc's mutated corn gene were resistant to four times the normal level of Roundup herbicide. However, the results were not sent to Rhone-Poulenc.
Right to Sublicense
What's more, Rhone-Poulenc, unaware of the test results, then granted DeKalb the "world-wide, paid-up right to use" the gene in the development of corn in 1994. The agreement also gave DeKalb the right to sublicense the technology.
DeKalb eventually developed the glyphosate-tolerant corn in collaboration with Monsanto and brought it to market as Roundup Ready in November 1997 with the first crop year in 1998. Rhone-Poulenc brought suit in October 1997.
The court separated the case into three trials.
In the first trial in April 1999, the jury found that DeKalb had fraudulently induced Aventis to sign its license agreement in 1994 by withholding test results involving the glyphosate resistant genes. The jury awarded Aventis $65 million, of which $50 million were punitive damages. The court also rescinded the agreement.
Two months later, a second jury determined that DeKalb had infringed on Aventis' patents and misappropriated trade secrets. Tilley upheld both verdicts in February. All trials were held in North Carolina because Aventis has its primary U.S. operations in that state.
In the most recent trial, Aventis argued successfully for co-ownership of two DeKalb patents.
Monsanto said it would ask the trial judge to set aside the decision,
"If necessary we will appeal to the Federal Circuit," said Fisher.