AgroPages-Dow asks review of $455 mn patent dispute with Bayer-Agricultural news

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US court upheld Dow’s $455 million award to Bayer affirmed in patent lawsuit

Dow AgroSciences LLC asked the full Federal Circuit to review a decision upholding a $455 million arbitration award to Bayer CropScience NV in a dispute over weed control patents, arguing that the award flouted public policy.

A Federal Circuit panel held in March that judicial review of arbitration awards is “very limited” and that ordinary legal or factual error is not a ground for disturbing a decision. But Dow argued in its petition for en banc rehearing that the panel’s approach failed to give the award meaningful review.

Dow maintained that the panel should have addressed whether the arbitration decision violated U.S. public policy. It argued the arbitrators did that by awarding Bayer damages on patents Dow said are invalid for double-patenting, as the U.S. Patent and Trademark Office has found in reexaminations of the patents.

“A panel of this court sustained the award because it reviewed the award through a lens so narrow that it would sustain most any award, no matter how offensive to U.S. public policy,” Dow said, adding that the en banc court should “adopt a standard that appropriately protects fundamental patent policy.”

Bayer owns five patents on weed control technology, which Dow's predecessor licensed in 1992. Dow later sublicensed the patents to a company called MS Technologies LLC, and Bayer terminated the agreement and sued Dow for infringement, arguing that the sublicense violated the agreement.

The case went to arbitration before the International Chamber of Commerce International Court of Arbitration, which ruled in favor of Bayer in 2015, finding that Dow breached the agreement and infringed Bayer's patents by using them in its products. It awarded Bayer $455 million in damages.

A district judge confirmed the award and the Federal Circuit upheld that decision, rejecting Dow's argument that the patents were invalid for double-patenting based on similar patents owned by a different Bayer unit.

While the USPTO has found the patents invalid for double-patenting in a reexamination, the court said that those decisions did not affect the outcome because the USPTO proceedings remain pending. It added that under the strict standard for reviewing arbitration awards, it cannot say whether the award is contrary to public policy.

In its rehearing petition, Dow argued that under U.S. Supreme Court precedent, international arbitrators can resolve cases outside of the U.S. judicial system only because courts have meaningful power to protect U.S. public policy.

The panel, however, "never even addressed whether enforcing the award would violate U.S. public policy" by awarding damages on invalid patents, Dow said. Other circuits have imposed a high bar for reviewing arbitration awards, but have determined for themselves whether the award violates public policy, the company added.

A representative of Dow repeated the statement the company issued after the panel decision, in which it said that it “continues to believe that it had a valid license to the technology at issue, that Bayer's underlying patents are invalid for multiple reasons, and that the damages awarded by the arbitration panel are grossly excessive."

Click here to read the original article in LAW 360.