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Monsanto Co. v. McFarling

United States Court of Appeals for the Federal Circuit
363 F.3d 1336 (2004)


Facts

Homan McFarling (defendant) purchased 1,000 bags of soybean seed that contained genetic-modification technology patented by the Monsanto Company (Monsanto) (plaintiff). Under an agreement with Monsanto, McFarling agreed not to save any seed for replanting or supply saved seed to any third party. Under the agreement, if McFarling saved, supplied, sold, or acquired seed in violation of the agreement, then the liquidated damages would be based on 120 times the applicable fee, which was $6.50 per 50-pound bag of seed. McFarling saved and replanted 1,500 bushels of seed from his 1998 crop and 3,075 bushels of seed from his 1999 crop. Monsanto sued McFarling for breach of contract. Monsanto acknowledged that whether a grower saves seed for himself or transfers seed to other growers significantly impacts the harm incurred by Monsanto. The district court granted summary judgment in Monsanto’s favor and entered a judgment for $780,000, representing 120 times the $6.50 fee for each of the 1,000 bags of seed that McFarling initially purchased from Monsanto. McFarling appealed.

Rule of Law

Issue

Holding and Reasoning (Clevenger, J.)

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