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Dow Can’t Shake $456M Plant Patent Arbitration Loss

U.S. District Judge Raymond A. Jackson confirmed that Dow broke a license agreement over four patents for genetically modified cotton and soybean crop products, awarding Bayer Cropscience AG $455.5 million plus interest.

Bayer initially sued Dow in January 2012, contending that Dow violated its intellectual property by selling vectors used to make plants and seeds containing a genetic modification that inhibits the effects of the herbicide Bialaphos.

Dow claimed it never breached the agreement and that because the deal was not terminated correctly, it remained in effect.  Dow also claimed that because the four patents at issue were either invalid or not infringed, it did not require a license for them.

Dow had argued the arbitration was “fundamentally flawed,” saying it wrongly determined Bayer’s patents were valid, that Bayer properly closed out its agreement with Dow, that Dow infringed the patents and that Bayer should receive the award as compensation.

Bayer shot back in November that Dow was merely trying to use the district court venue as a way to take a second bite at the apple, fighting out the issues again.

Judge Jackson found no evidence to sustain Dow’s “very heavy burden” to vacate the award, and that Dow’s contention that it should be vacated on public policy grounds was also unpersuasive.

Judge Jackson said, “a motion to vacate an arbitration award is not an appropriate avenue to relitigate the entire case,” Judge Jackson wrote. “After reviewing the voluminous submissions of the parties and the extensive record in this case … the court finds absolutely zero basis to vacate the award.”

“Ultimately, the most pressing public policy concern at this point in this matter is the public policy in favor of the arbitration process,” Judge Jackson wrote. “The policy supporting fair, competent and judicially respected arbitration proceedings is about as strong and compelling a public policy that our federal courts embrace.”

“To vacate the award on this record would be fundamentally inapposite to our nation’s public policy,” he added.

For more information, see Law360.

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