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Supreme Court seeks government view in Monsanto - Bayer corn tussle

(Tuesday, Nov. 19, 2002 -- CropChoice news) -- Mark H. Anderson, Dow Jones, 11/18/02: The U.S. Supreme Court asked the U.S. Solicitor General to comment on one of two appeals that has reached its doorstep in a tussle between Monsanto Co. and Bayer AG subsidiaries over herbicide resistant corn technology.

The dispute between the companies stems from the development of a corn called Roundup Ready that isn't hurt by Round Up, a widely-used herbicide sold by Monsanto. The product allows farmers to use the herbicide to kill weeds without harming the corn.

The herbicide resistant technology was developed through collaboration between Rhone-Poulenc Agro, now a Bayer agricultural technology unit, and DeKalb Genetics Corp., which is now owned by Monsanto.

The Bayer unit first sued Monsanto and DeKalb in 1997, alleging that DeKalb has fraudulently convinced it in 1994 to release rights to genetic technologies being used to develop the new corn.

Two trials were held in the case and a North Carolina jury in U.S. District Court agreed DeKalb had committed fraud and misappropriated trade secrets.

The federal U.S. Circuit Court of appeals decision ultimately upheld the lower court decisions, including a $65 million judgment against the DeKalb.

Monsanto challenged the federal appeals court decision that the company had no right to use the technology because the DeKalb unit had illegally obtained it.

Monsanto argued it should be allowed to use the corn technology because it had purchased rights to it through DeKalb transactions without knowledge of any fraud. The company also said the decision opens up other companies to patent fraud suits that aren't brought until a company develops a valuable commercial product.

The Bayer unit argued that the appeals panel decision was proper, however, in that it protects the owners of a patent.