Roundup Ready is lawsuit ready

Monsanto Co. v. Syngenta Seeds, Inc., 2006 WL 2247094 (D. Del.)

Syngenta sued Monsanto for antitrust violations, specifically monopolization of the markets for glyphosate-tolerant corn (GA21 corn) traits and European corn borer-tolerant corn (Bt-Xtra) traits, and attempted monopolization of the foundation corn seed market. Monsanto counterclaimed that Syngenta misappropriated Monsanto’s GA21 event (“event” is apparently the term of art here). GA21 corn is commercially known as Roundup Ready corn, familiar to patent types; it tolerates a leading non-selective herbicide, allowing growers to spray that herbicide over the entire crop without damaging it.

Monsanto licensed a number of seed companies, including Garst and Golden Harvest, to develop corn hybrids from crossing a GA21 corn line with another line. In 2004, Syngenta acquired Garst and Golden Harvest, including their inbred corn lines containing the GA21 event. In 2005, Syngenta offered GA21 hybrid corn seeds under the name Agrisure GT.

Monsanto counterclaimed for reverse passing off and false advertising under the Lanham Act, as well as violations of the Deleware Deceptive Trade Practices Act. The issue is whether Syngenta made false or misleading statements of fact about the origin of its “product,” and therefore what that product is, the seed (which is not produced by Monsanto) or the GA21 trait (which has its origin in Monsanto). As you might expect, after Dastar the answer is fairly clear: the product is the seed, and thus Syngenta hasn’t engaged in reverse passing off.

Dastar left open the prospect of false advertising claims based on intellectual “origins.” Monsanto alleged various false statements of fact, including statements about Syngenta’s rights to the GA21 event, Monsanto’s authorization of Syngenta, and Syngenta’s independent creation of Agrisure GT. The court refused, however, to let Monsanto merely plead around Dastar. If Syngenta were to give the impression to consumers that its seed was “quite different” from Monsanto’s seed, there would be a valid false advertising claim. Monsanto’s allegations here, however, merely relate to statements regarding the origin of the seed or of the GA21 event, not the “nature, characteristics [or] qualities” of the corn seed. The statement that Syngenta is the origin of the seed isn’t false, and it follows from Dastar that Syngenta doesn’t have to give credit to Monsanto. Since Monsanto’s claims all boil down to reverse passing off, they’re not valid false advertising claims.

This is an aggressive but not unusual interpretation of Dastar. Dastar could have been read to allow pleading around more easily, as long as there were allegations of materiality (usually the missing component in pre-Dastar claims based on insufficient credit) and perhaps explicit, rather than implicit, claims. But by and large, lower courts have read Dastar expansively.

Interestingly enough, some of Monsanto’s state law claims survived. The passing off/likely confusion claims were dismissed because Delaware law follows the same substantive standards as the Lanham Act (pre-Dastar precedent, but allowing divergence would have created ugly preemption issues). However, the court declined to dismiss Monsanto’s allegations that Syngenta falsely represented that its goods or services were of a particular standard, quality, grade or model. Here, the different wording of the state law seems to have saved Monsanto’s false advertising allegation.