A $1 Billion Parable
90 Denver University Law Review Online 185, 2013
7 Pages Posted: 27 Nov 2014
Date Written: July 23, 2013
In August 2012, the jury awarded Monsanto a whopping one billion dollars in its patent infringement lawsuit against DuPont. That’s real money even for today’s high stakes patent disputes. Although many observers were shocked by the sheer magnitude of the award, it’s really the damages theory that should provoke concern. Unlike most patent lawsuits, which are based on selling infringing products, Monsanto recovered damages even though the defendant, DuPont, hadn’t sold any of its infringing genetically modified soybean seeds. Let’s be perfectly clear: DuPont had made no money for any sales of infringing seeds and Monsanto had lost no sales of its seeds because of DuPont’s infringement. Nevertheless, the jury awarded one billion dollars in damages to Monsanto.
But even though the parties have now settled their dispute, such an astonishing result deserves a deeper look. When this award is examined more closely, it’s clear that it is far too high. Although Monsanto's damages theory appears to be a straightforward application of the way patent awards reasonably royalties, Monsanto did not suffer a one billion dollar injury. The award was the result of an uncritical application of the black letter law. This case illustrates how even courts, and in the largest and most complex cases, may fail to see the forest for trees. Hopefully, lawyers can learn from this case and avoid committing the same mistakes in the future.
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