DuPont sues Monsanto over soybean technology

DuPont has filed a lawsuit against Monsanto Co., claiming the rival failed to pay royalties over gene-gun technology used to develop herbicide-resistant soybeans.

The lawsuit, filed in the Delaware Court of Chancery, seeks to enforce a 2012 arbitration panel decision requiring Monsanto to pay royalties on the technology known as Biolistic. DuPont claimed Monsanto made two initial payments totaling roughly $33.3 million, but then failed to meet additional royalty obligations.

"Monsanto has failed, and despite, repeated demands, refused to satisfy its royalty obligation in accordance with the panel's final award and the biolistic agreement," wrote DuPont attorney Peter J. Walsh Jr. of Potter Anderson & Corroon. "Accordingly, DuPont seeks by this action to enforce the Final Award and the terms of the Biolistic agreement, and to obtain such other relief as is appropriate."

Although DuPont did not specify how much Monsanto allegedly owed under the agreement, Walsh said in legal filings it would was "several million dollars."

"We are surprised and puzzled that DuPont would chose to sue over the arbitration case, which involves royalties of less than $7 million and over a dispute that has been silent for two years," said Sarah Miller, a Monsanto spokeswoman, in an email response to the News Journal.
DuPont spokesman Dan Turner said the company had no comment.

In December 1992, DuPont and Monsanto entered into a commercial agreement for the Biolistic delivery technology, according to the lawsuit. The companies began disputing Monsanto's royalty obligations under the agreement in 2008. Monsanto claimed it no longer owed DuPont any money under the agreement because several of DuPont's gene gun patents expired in July 2007.

Monsanto initiated binding arbitration to resolve the dispute and, in 2012, an arbitration panel ordered Monsanto to pay DuPont through the end of that year, according to legal documents. DuPont claimed in the lawsuit it has not received the final payments for the product's use on South American crops.
Monsanto alleged that it was not obligated to pay DuPont for Biolistic South American use because it occurred after its agreement with DuPont had expired.

DuPont said the Biolistic process is important because it propels genetic material into living cells by accelerating tiny particles coated with the genetic material through a gene gun. The expected result is for plants to incorporate the desired gene into the target cell and reproduce that trait in successive generations.

The biolistic technology implants herbicide resistant genes into the soybean's genetic material. Soybean seed sales are a several billion dollar industry, according to agriculture industry reports.

In addition to seeking an enforcement of the arbitration award, DuPont has also asked the court to reimburse its attorney fees and offer any other relief the court deems necessary. The case has not yet been assigned to a Chancery Court judge.