Monsanto Co. v. Scruggs, No. Civ.A.3:00 CV 161 P-A.

• Decision Date: 06 July 2004
• Docket Number: No. Civ.A.3:00 CV 161 P-A.
• Citation: 342 F.Supp.2d 584
• Parties: MONSANTO COMPANY Plaintiff v. Mitchell SCRUGGS, Eddie Scruggs, and Scruggs Family Farm Supply Defendants.
• Court: U.S. District Court — Northern District of Mississippi

342 F.Supp.2d 584

MONSANTO COMPANY Plaintiff v. Mitchell SCRUGGS, Eddie Scruggs, and Scruggs Family Farm Supply Defendants.

No. Civ.A.3:00 CV 161 P-A.

United States District Court, N.D. Mississippi, Western Division.

July 6, 2004.

COPYRIGHT MATERIAL OMITTED

Michael Noel Watts, Robert Bradley Best, Oxford, MS, Frank S. Thackston, Jr., Lake Tindall, LLPP, Greenville, MS, Charles Victor McTeer, Kimberly Georgette Jones, McTeer & Associates, Greenville, MS, Glennon P. Fogarty, Dutro E. Campbell, Michele L. Taylor, S. Christian Mullgardt, II, Adam E. Miller, Husch & Eppenberger, LLC, St. Louis, MO, Kenneth A. Letzler, Jonathan I. Gleklen, Michael D. Yeh, Arnold & Porter, Washington, DC, Susan K. Knoll, Howrey Simon Arnold & White, for Plaintiff.

Jim D. Waide, III, Waide & Associates, PA, Tupelo, MS, James L. Robertson, Wise, Carter, Child & Caraway, Lisa Scruggs Rohman, Lisa Scruggs Rohman, Attorney, Tupelo, MS, Dennis C. Sweet, III, Sweet & Freese, Jackson, MS, Gary Myers, Gary Myers, Attorney, Oxford, MS, Michael Noel Watts, Robert Bradley Best, Holcomb Dunbar, Oxford, MS, Matthew T. Schelp Glennon P. Fogarty, Husch & Eppenberger, LLC, St. Louis, MO, Glennon P. Fogarty, Dutro E. Campbell, S. Christian Mullgardt, II, Husch & Eppenberger, LLC, St. Louis, MO, Paul Eldridge Barnes, Wise, Carter, Child & Caraway, Jackson, MS, for Defendants.

MEMORANDUM OPINION

PEPPER, District Judge.

This cause is before the Court on Monsanto's Motion for Summary Judgment on Counts Two, Three, Four, Five and Eight of Plaintiff's Complaint (Monsanto's Patent Infringement Claims) [399-1] and the Defendants' Motion for Summary Judgment on Monsanto Company's Counts Two, Three, Four and Five of Plaintiff's Third Amended Complaint [517-1]. The Court, having reviewed the motion, the response, the briefs of the parties, the authorities cited and being otherwise fully advised in the premises, finds as follows, to-wit:

FACTUAL BACKGROUND

Monsanto began research in the field of plant genetics in the early 1980's. During the course of that research, Monsanto scientists Robert Fralcy, Robert Horsch, and Stephen Rogers discovered it was possible to insert a foreign gene into a plant, get the plant to regenerate and to express the foreign gene. As a part of that discovery, they learned what DNA parts were essential to the creation of a transformed plant which incorporated the foreign DNA. Simply put, the synthetic gene required a promoter, a protein sequence of interest and a stop signal — all of which came from different sources. That invention is one of the subjects of the 5,352,605 patent (hereafter '605 patent).

Thereafter, Monsanto licensed the use of the 35S cauliflower mosaic virus (hereafter CaMV 35S) promoter disclosed in the '605 patent to numerous universities. Pursuant to such a license, Dr. Joan McPherson, a researcher with the University of British Columbia, undertook additional study of the CaMV 35S promoter. As a result of her work with the 35S promoter, she applied for and obtained patents numbered 5,164,316, 5,196,525 and 5,322,938 (hereafter the McPherson patents). The McPherson patents extended the art disclosed in the '605 patent in several ways; but for purposes of this case, one of its most important inventions was an enhanced 35S promoter. Monsanto subsequently purchased the McPherson patents and used their teachings in developing agricultural products for commercial sale.

Monsanto used the art taught in the '605 patent to develop genetically modified soybeans which are resistant to glyphosate herbicide.¹² The genetically modified soybeans are commercially marketed as Roundup Ready soybeans. The soybeans are resistant to Roundup because the plants produce a specific enzyme called 5-enolpyruvylshikimate-3-phosphate synthasc (hereafter EPSPS). Monsanto used the same art to develop genetically modified cotton which is resistant to glyphosate herbicide. The genetically modified cotton is commercially marketed as Roundup Ready cotton. Monsanto utilized the teachings of both the '605 patent and the McPherson patents to develop a stacked trait cotton. This stacked trait cotton is not only glyphosate resistant, but it is also resistant to certain insects because the cotton plants produce a protein called bacillus thurengiensis (hereafter Bt) which is toxic to certain insects and other pests. The stacked trait cotton containing the Bt protein and the EPSPS protein is commercially marketed as Bollgard/Roundup ready cotton.

After developing the biotechnology described above and demonstrating its usefulness in agronomic production, Monsanto began licensing its technology to seed companies. However, it did not do so unconditionally. Instead, Monsanto imposed two provisos on the seed companies to which it licensed its Roundup Ready and Bollgard technology. First, Monsanto forbade seed companies from selling seed which contained Monsanto's biotechnology to growers unless the grower first signed one of Monsanto's technology license agreements. Second, seed so sold could only be used by growers to grow a single commercial crop, e.g., growers could not save seed produced from a harvested crop for replanting during the following growing season.

In 1996, Roundup Ready soybeans became available to commercial growers. Although he never signed a license agreement,³ Mitchell Scruggs purchased a small quantity of Roundup Ready 5601 Asgrow soybeans from Seeds, Inc. in Memphis. The seed was sufficient to plant approximately ten acres of soybeans. After the fall harvest, Mr. Scruggs retained the soybean seed from those ten acres; he cleaned it and saved it for planting during the 1997 crop season. He did likewise with the Roundup Ready soybean seed for all subsequent crop seasons up to the year 2000. By 2000, Scruggs had enough saved Roundup Ready soybean seed to plant more than 8,000 acres.

Bollgard/Roundup Ready cotton became available to growers in 1998. Again, Scruggs purchased only a small quantity of Delta & Pine Land Paymaster cotton seed containing the Bollgard and Roundup Ready traits — enough to plant no more than a few acres.⁴ However, as with the soybean seed, Mr. Scruggs retained the cotton seed from the fields he planted with Bollgard/Roundup Ready seed. He sent it to a facility in Missouri for cleaning and delinting; he then replanted the saved seed during the 1999 growing season. He did likewise for the 2000 growing season. By 2000, Scruggs had saved enough Bollgard/Roundup Ready cotton seed to plant in excess of 2000 acres.

After conducting an investigation into Mr. Scruggs' activities during the spring and summer of 2000, Monsanto filed the instant lawsuit, seeking recovery for the acts of Mitchell Scruggs and his affiliates, acts which, according to Monsanto, amounted to infringement of its rights under the '605 and McPherson patents.⁵ The Scruggs defendants filed responsive pleadings denying infringement. The defendants also sought a declaration of invalidity with regard to the '605 and McPherson patents. After ample opportunity for discovery, Monsanto filed its Motion for Summary Judgment on Counts Two-Five of its Third Amended Complaint. The Scruggses not only responded in opposition to Monsanto's motion; they filed a cross-motion for summary judgment. The motions have been fully briefed and are ripe for decision.

STANDARD OF REVIEW

Rule 56(c) of the Federal Rules of Civil Procedure authorizes summary judgment where "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corporation v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The existence of a material question of fact is itself a question of law that the district court is bound to consider before granting summary judgment. John v. State of La. (Bd. of T, for State C. & U.), 757 F.2d 698, 712 (5th Cir.1985).

A judge's function at the summary judgment stage is not himself to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Although Rule 56 is peculiarly adapted to the disposition of legal questions, it is not limited to that role. Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218, 222 (5th Cir.1986). "The mere existence of a disputed factual issue, therefore, does not foreclose summary judgment. The dispute must be genuine, and the facts must be material." Id. "With regard to `materiality', only those disputes over facts that might affect the outcome of the lawsuit under the governing substantive law will preclude summary judgment." Phillips Oil Company, v. OKC Corporation, 812 F.2d 265, 272 (5th Cir.1987). Where "the summary judgment evidence establishes that one of the essential elements of the plaintiff's cause of action does not exist as a matter of law, ... all other contested issues of fact are rendered immaterial." See Celotex, 477 U.S. at 323, 106 S.Ct. at 2552. Topalian v. Ehrman, 954 F.2d 1125, 1138 (5th Cir.1992).

In making its determinations of fact on a motion for summary judgment, the Court must view the evidence submitted by the parties in a light most favorable to the non-moving party. McPherson v. Rankin, 736 F.2d 175, 178 (5th Cir.1984).

The moving party has the duty to demonstrate the lack of a genuine issue of material fact and the appropriateness of judgment as a matter of law to prevail on his motion. Union Planters Nat. Leasing v. Woods, 687 F.2d 117 (5th Cir.1982). The movant accomplishes this...