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Damages for Research and Development
Posted in Litigation, Patents

In an August 6, 2012 order, Judge Webber of the Eastern District of Missouri confirmed the jury verdict, including the reasonable royalty damage award of $1 billion in Monsanto Co. v. E.I. DuPont de Nemours & Co., Civil Action No. 09-CV-686 (E.D. Missouri August 6, 2012) (Webber, D.J.). The award is the fourth largest jury award in a patent trial in U.S. history, and is especially surprising given that DuPont’s accused product had never been made available to the public.

DuPont’s use of Monsanto’s patent was for research purposes to develop DuPont’s own commercial product. Thus, Monsanto did not seek lost profits, but instead demanded a reasonable royalty for the unlicensed research. While 35 U.S.C. §271(e) provides a limited research exemption to patent infringement, the exemption was not applicable because DuPont’s research was not solely for uses reasonably related to the development and submission of information under Federal regulatory law.

The reasoning leading to this unprecedented award in a research situation seems important, but is unfortunately part of a sealed record. DuPont has stated that they will appeal this verdict, and perhaps the appeal will shed more light. In the meantime, researchers should review the §271 exemption to ensure that their research either falls within those bounds or ensure that all the necessary licenses are in order. Simply because an infringing use would not involve selling, offering to sell, or importing a patented invention, it cannot be assumed that damages would be minimal.

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