The University of California announced yesterday that it has finally settled its lawsuit against Monsanto Co., a biotechnology product developer, for allegedly infringing upon University patent rights.
According to a UC press release, the UC filed suit against Monsanto in Feb. 2004 alleging that the company violated patent laws while developing the dairy cow growth hormone somatotropin in its POSILAC product. The settlement includes $100 million in upfront royalties as well as an ongoing $0.15 per dose of POSILAC with a minimum annual royalty of $5 million.
Purchasers give dairy cows the somatotropin product to enhance milk production by about 10 to 20 percent.
In the press release, UC General Counsel James E. Holst said he was content with the conditions of the settlement.
“The settlement represents a positive outcome for both parties, by protecting the university’s patent rights and providing Monsanto with the opportunity to market and distribute this important product,” Holst said.
In addition, the settlement gives Monsanto exclusive license to use the UC-patented recombinant DNA that produces somatotropin, while preventing the UC from making any additional lawsuits.
In a press release from the company, Monsanto’s Executive Vice President for North America Commercial Operations Carl Casale said he was also satisfied with the settlement terms.
“We’re pleased that we’ve come to an agreement that will allow our dairy-producer customers to continue to use POSILAC bovine somatotropin,” Casale said. “This agreement illustrates that we are willing to work jointly to resolve disputes, and it allows us to avoid the expense and inconvenience of protracted litigation.”
The University press release said UC San Francisco (UCSF) scientists Walter L. Miller, Joseph A. Martial and John D. Baxter discovered the recombinant DNA to make the growth hormone.
UC spokesman Trey Davis said the research began in 1979 and the patent application was submitted in Aug. 1980. However, he said the official patent was not issued until Feb. 2004.
“Groundbreaking patents like these take a long time to be reviewed,” Davis said. “This was also during the height of the bio-tech era, so there was a lot of activity to review.”
UCSF dept. of pediatrics professor Dr. Walter L. Miller said he thought Monsanto released its POSILAC product around the year 1994. He said the settlement mostly regarded licensing rights as opposed to actual patent infringement.
“Clearly the UC cannot allege patent rights before 2004,” Miller said. “The settlement was for purchasing an exclusive license to the patent and to pay the UC a certain amount in damages.”
Miller said the hormone made from the recombinant DNA allows dairy farmers to be more efficient by producing more milk with less cows – a benefit that can help increase food supplies to starving nations. It also has significant implications for medicine.
“Since 1960, growth hormones have been used in human beings to help children with a lack of [growth hormones] to grow normally,” Miller said. “This is not the purpose used in cattle. It is used commercially in adult dairy cows to increase dairy products. It increases production by 10 to 20 percent.”
Monsanto Co. is based in St. Louis, Mo. and specializes in both seed and agricultural products, according to the company’s website.
According to the UC press release, the patent for the recombinant DNA expires in 2021, but a patent for somatotropin would run until 2023. The settlement includes licensing fees and royalties to the 2023 expiration date of the UC’s patent rights.
Miller said his past research was federally funded through departments in the National Institutes of Health. He said he was relieved to see the settlement and patent rights finalized.
“I’m glad it’s settled,” Miller said “It’s only been 26 years.”