Regents of the University of California v. Monsanto Company

Analysis Group was retained by counsel for Monsanto Co. in this matter involving issues regarding possible infringement and validity of recombinant DNA patent rights. The case concerned the production of bovine somatotropin, which is sold under the brand name POSILAC and is used to enhance milk production in cows. Monsanto Co. and the Regents of the University of California agreed to a settlement to resolve the matter.

Analysis Group provided litigation and strategic support to Monsanto's counsel during the legal proceedings leading up to the settlement, and Analysis Group Managing Principal Jeffrey H. Kinrich served as the economic expert witness for Monsanto. Mr. Kinrich conducted a reasonable royalty analysis and presented rebuttal evidence and a critique of the opposing expert's application of economic efficiency and bargaining theory concepts.

The case was unusual in that the Regents' patent was prosecuted in the Patent and Trademark Office for over 20 years, during which time Monsanto independently developed and commercialized POSILAC. The product had been selling, without infringing, for almost 10 years before the patent issued. In addition, even though there is a potential design-around to the Regents' patent, several years of FDA testing and approval would still be required before the alternative product could be marketed and sold.

The total settlement was considerably lower than the nearly $600 million in damages sought by the Regents. In addition, the plaintiffs were seeking treble damages for alleged willfulness on the part of Monsanto, which, if granted, could have resulted in a total claim of $1.8 billion. Settlement terms included a $100 million initial payment for an exclusive license to the technology and an ongoing royalty of 15 cents for each dose of POSILAC sold in the future. This resolution allowed Monsanto to continue receiving the benefits of its POSILAC product and ensured that supply is available to dairy producers without interruption.

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