Syngenta Seeds, Inc. v. Delta Cotton Co-Op., Inc.

• Decision Date: 28 July 2006
• Docket Number: No. 05-1507.,05-1507.
• Citation: 457 F.3d 1269
• Parties: SYNGENTA SEEDS, INC., and Syngenta Participations AG, Plaintiffs-Appellees, v. DELTA COTTON CO-OPERATIVE, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

457 F.3d 1269

SYNGENTA SEEDS, INC., and Syngenta Participations AG, Plaintiffs-Appellees, v. DELTA COTTON CO-OPERATIVE, INC., Defendant-Appellant.

No. 05-1507.

United States Court of Appeals, Federal Circuit.

July 28, 2006.

Mark Murphey Henry, Henry Law Firm, of Fayetteville, Arkansas, argued for plaintiffs-appellees. With him on the brief was Nathan P. Chaney.

William H. Bode, Bode & Grenier, LLP, of Washington, DC, argued for defendant-appellant. Of counsel on the brief was Hunter J. Hanshaw, of Jonesboro, Arkansas.

Before RADER, SCHALL, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

On April 28, 2005, following a jury trial, the United States District Court for the Eastern District of Arkansas entered a judgment against defendant-appellant Delta Cotton Co-Operative, Inc., awarding damages to plaintiffs-appellees Syngenta Seeds, Inc., and Syngenta Participations AG (collectively "Syngenta Seeds" or "Syngenta") for infringement of Syngenta's rights under the Plant Variety Protection Act and the Lanham Act. On July 5, 2005, the district court entered an order denying Delta Cotton's motions for judgment notwithstanding the verdict, new trial, and remittitur, and granting Syngenta's motions for permanent injunction and costs. Syngenta Seeds, Inc., v. Delta Cotton Co-Op., Inc., No. 3:02-CV-00309 (E.D.Ark. July 5, 2005) ("Order"). Delta Cotton timely filed a notice of appeal on July 29, 2005. The district court had jurisdiction pursuant to 28 U.S.C. § 1338(a), and this court has jurisdiction over the appeal pursuant to 28 U.S.C. § 1295(a)(1). For the reasons set forth herein, we reverse.

BACKGROUND

Syngenta Seeds is an international agribusiness that produces, among other agricultural products, commercial crop seeds. At the heart of this litigation is a Syngenta Seeds product known as "Coker 9663" — a soft red winter wheat variety sold by Syngenta through a network of independent distributors throughout the United States. The Coker 9663 variety is certified pursuant to, and subject to the protections of, the Plant Variety Protection Act ("PVPA"), discussed in detail below. As a certified PVPA seed, Coker 9663 is sold exclusively in approved packaging that sets forth the variety name and the required PVPA marking notice, which reads "Unauthorized Propagation Prohibited" or "Unauthorized Seed Multiplication Prohibited." Syngenta is also the holder of the federally registered trademark "COKER."

Delta Cotton operates a grain elevator in Greene County, Arkansas. Like most grain elevator operators, Delta engages in at least three separate businesses. First, it acts as a broker or middleman for local farmers' grain sales. Farmers ship grain to the facility for testing, grading, and storage. The elevator then finds buyers for the grain and takes a sales commission on the highest available price.

Second, the elevator also makes outright purchases of local farmers' harvested crops, including wheat. Purchased crops are stored in bins that are sorted by commodity, such that wheat is stored separately from corn, corn from soybeans, and so on. The facility receives and stores approximately 50,000 bushels of wheat per year. Although the facility receives wheat from many sources, all wheat received is placed in the same storage bin. As a sideline of its grain-storage business, Delta Cotton sells bags of stored wheat as "feed wheat," intended not to be propagated as crops but to be fed to farm animals. Feed wheat is sold in 50-pound bags that are generally labeled "Delta Co-Op feed."

Finally, Delta Cotton also operates as a retailer of protected variety seed, in which capacity it sells — among many other varieties — Syngenta's protected Coker 9663 seed.

At issue in this case is the sale by Delta Cotton of three 60-pound bags labeled "feed wheat" that allegedly contained protected Coker 9663 seed. In 2001, a man hired by Syngenta Seeds' law firm entered Delta Cotton's facility and asked whether Delta had "any wheat I can plant for deer plots." The store provided him with three bags for $3.50 each. The bags were labeled "Delta Cotton Co-Operative" and "Feed Wheat." Order at 3; J.A. at 2880. The bags were then provided to Dr. Brent Turnipseed, an agronomist, for identification testing. Dr. Turnipseed testified that analysis indicated that the specimen provided to him, and alleged to have been drawn from those bags, contained 90% protected Coker 9663 seed.

On September 16, 2002, Syngenta Seeds filed suit against Delta Cotton in the Eastern District of Arkansas for, inter alia, infringement of the PVPA and the Lanham Act, seeking permanent injunctive relief, treble damages, disgorgement of profits, and costs. A three-day trial was held before a jury from April 25-27, 2005, after which the jury rendered a verdict for Syngenta Seeds. The court entered judgment against Delta Cotton of damages of $67,500 on the PVPA claim, $67,500 on the Lanham Act claim, plus interest. On July 5, 2005, following briefing, the court also granted Syngenta Seeds' motions for a permanent injunction and costs, and denied Delta Cotton's motions for new trial, judgment notwithstanding the verdict, and remittitur. Order at 8-9. Delta Cotton filed its notice of appeal of the court's order on July 29, 2005. We have exclusive jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

On appeal, Delta Cotton raises a host of challenges to the trial court's denial of its post-trial motions. First, it asserts that Syngenta "failed to present any credible evidence on the threshold element of infringement" under the PVPA and the Lanham Act: "that the wheat bagged and sold by Defendant was the Coker 9663 Protected Variety." Second, it asserts that because "uncontested evidence showed that the identified sales were made ... for feed purposes and not for propagation," Syngenta Seeds could not have established the element of scienter, which Delta Cotton asserts is required for a finding of PVPA infringement. Third, it alleges that the trial court abused its discretion by excluding evidence of Delta Cotton's lack of knowledge of the source of the wheat, preventing Delta Cotton "from establishing a defense to damages under § 2567" of the PVPA. Fourth, it alleges that Syngenta failed to present evidence sufficient to state a cause of action under the Lanham Act. Finally, it claims that the damages awarded to Syngenta were duplicative and "grossly exceeded the damages permitted for infringement" under both the PVPA and the Lanham Act.

STANDARD OF REVIEW

In reviewing a trial court's denial of a motion for judgment as a matter of law¹ in Lanham Act cases, this court applies the law of the relevant regional circuit — here, the Eighth. See, e.g., Thompson v. Haynes, 305 F.3d 1369, 1374 (Fed. Cir.2002). In the patent context — to which the PVPA claims raised here are analogous — we have reviewed such denials using both regional circuit law and our own law. Compare NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1324 (Fed. Cir.2005), cert. denied, ___ U.S. ___, 126 S.Ct. 1174, 163 L.Ed.2d 1141 (2006) (applying regional circuit law), with Honeywell Int'l, Inc. v. Hamilton Sundstrand Corp., 370 F.3d 1131, 1139 (Fed.Cir.2004) (en banc) (applying Federal Circuit law). This inconsistency is insignificant in this case, because the standards applied by this court and by the Eighth Circuit are essentially similar. Both circuits review a district court's denial of a motion for judgment as a matter of law following a jury verdict de novo, drawing all reasonable inferences in favor of the non-moving party and assuming that the jury resolved all factual conflicts in that party's favor. See, e.g., Honeywell Int'l, Inc., 370 F.3d at 1139 (stating that this court reviews denial of a motion for judgment as a matter of law without deference, viewing all evidence and drawing all inferences favorably to the non-moving party); Walsh v. Nat'l Comp. Sys., Inc., 332 F.3d 1150, 1158 (8th Cir. 2003) (same). We must not set aside a jury verdict unless there is a "complete absence of probative facts to support the verdict." Walsh, 332 F.3d at 1158. Federal Rule of Civil Procedure 50(a)(1) provides that a court may grant a motion for judgment as a matter of law only where "there is no legally sufficient evidentiary basis for a reasonable jury to find for [the non-movant]." Fed.R.Civ.P. 50(a)(1).

DISCUSSION

I. Waiver and Scope of Appellate Review

At the close of Syngenta's case, Delta Cotton moved for a directed verdict on the grounds that Syngenta had failed to carry its burden of proof on both PVPA infringement and Lanham Act infringement. The trial court denied that motion from the bench. Following entry of the jury's verdict, Delta Cotton filed motions for new trial, judgment notwithstanding the verdict, and order of remittitur, all of which the district court denied in its order of July 5, 2005.

Under Eighth Circuit law, a post-verdict motion for judgment as a matter of law may not raise issues not previously raised in a pre-verdict motion. Walsh, 332 F.3d at 1158. Here, Delta Cotton's pre-verdict motion raised only sufficiency of the evidence as grounds, asserting that Syngenta had failed to prove PVPA infringement and had failed to prove confusion or injury under the Lanham Act. The trial court therefore limited its consideration of Delta Cotton's motions to those issues, and — except with respect to Delta Cotton's argument under § 2567 of the PVPA, discussed below — we are constrained to do the same. The sole issues before us on appeal, therefore, are (1) whether the jury's verdicts of infringement under the PVPA and confusion or injury under the Lanham Act were supported by evidence sufficient to sustain the verdicts, and (2) whether the district court correctly applied § 2567 of the PVPA.

II. PVPA Claims

A. Infringement

The PVPA provides patent protection to breeders of certain plant varieties, who may acquire "the right ... to exclude others from selling the variety, or...