Article

by Carey Gillam

Opening arguments were underway Tuesday in a potentially pivotal legal battle between agricultural giants Monsanto and DuPont over Monsanto's control of a popular seed technology worth billions of dollars.

The rivals have been fighting for years and the trial in federal court in St. Louis represents only part of an ongoing argument over the use of lucrative seed technology that makes soybeans, corn and other crops tolerant of glyphosate-based herbicide, letting farmers spray the weed killer directly over the crops.

In the trial in St. Louis, expected to last about three weeks, Monsanto is arguing that DuPont (DD.N) through its Pioneer Hi-Bred International unit has violated a 2002 licensing agreement giving DuPont the right to use Monsanto's glyphosate-tolerant Roundup Ready soybean trait. DuPont counters that Monsanto (MON.N) acted fraudulently in obtaining the patent.

"Over the course of this trial, DuPont will demonstrate to the jury that the Monsanto Roundup Ready soybean patent in the suit... is invalid and unenforceable because Monsanto intentionally deceived the United States Patent and Trademark Office on several occasions as it procured the patent," DuPont attorney Thomas Sager said in a statement to Reuters.

"We will also demonstrate that Monsanto sought to enforce the RE 39,247 patent against farmers and against DuPont even though Monsanto and its lawyers knew the patent was invalid."

Monsanto spokesman Lee Quarles said: "They're attempting to distract from what is really on trial here, which is their willful infringement of our patent.".

"This suit will highlight that DuPont/Pioneer's unauthorized use of Monsanto's patented Roundup Ready technology was done without authorization under any license and without payment," said Quarles. "This trial will now establish the accountability and financial liability for DuPont/Pioneer's improper use of the Roundup Ready technology."

Quarles said Monsanto has been open to discussions about collaborative commercialization, but DuPont has focused instead on attacking Monsanto.

Both companies have strong positions in the U.S. seed industry and have been racing each other and other competitors to develop higher-yielding crops through genetic modifications and other means. Roundup Ready soybeans and other crops have become wildly popular with farmers, and have become the base for other 'stacks' of genetic traits developed for crops.

Thus control and use of the technology is a critical issue.

Monsanto zealously guards it patented technology, and sued DuPont in May 2009 for what it said was unauthorized use of the Roundup Ready herbicide tolerant product. Monsanto said DuPont's Optimum Gat soybean seed was a failure as a competitor to Roundup Ready, leading DuPont to include the licensed Roundup Ready trait in combination with its own glyphosate-resistant genetic trait.

The U.S. District Court in St. Louis ruled in 2010 that the Roundup Ready license agreements between DuPont and Monsanto contain an unwritten "implied" term that prohibited DuPont from stacking its Optimum GAT trait with Monsanto's Roundup Ready trait in soybeans or corn.

But the court said its ruling was narrow, and said that DuPont's separate antitrust and patent fraud claims were not impacted by that ruling and could proceed.

The case is in Re: Monsanto Co vs E.I. Dupont De Nemours, U.S. District Court, Eastern District of Missouri, No. 09-00686.

(Reporting by Carey Gillam in Kansas City; Editing by Tim Dobbyn)