In a 17-year-old patent case, a North Carolina federal judge has awarded two Dow Chemical Co. affiliates $5.3 million in attorney fees and costs for inequitable conduct by a Bayer A.G. subsidiary. 

On September 28, Judge William Osteen Jr. of the Middle District of North Carolina deemed Plant Genetic Systems N.V. v. Mycogen Plant Science Inc. an exceptional case and granted the defendants’ motion for fees and costs.

Due to acquisitions, the plaintiff is now Bayer Bioscience N.V. and the defendants are Dow units Mycogen and Agrigenetics Inc.

In related cases about the same group of insect-resistant crop patents, Bayer was ordered to pay $4.9 million of Dow’s attorney fees and costs in 2010 and $8.4 million in Monsanto Co.’s attorney fees and $139,000 in its costs in 2007.

Osteen based his ruling on the findings of inequitable conduct, essentially fraud on the U.S. Patent and Trademark Office (PTO), in the related Monsanto case: “This [Plant Genetic] case marked Plaintiff’s first attempt to enforce rights under a patent obtained by inequitable conduct. This court sees no justification for departing from the reasoned analysis utilized by other courts to grant an award of attorneys’ fees in related litigation.”

Plant Genetic initially filed its lawsuit in October 1995 in the Middle District of North Carolina — the first of several by the parties and related companies concerning the patents.

It was stayed in December 1998 pending resolution of a District of Delaware case that involved the same two patents. In 2002, the plaintiff amended the North Carolina complaint to drop the infringement claim for one of the patents.

After the Delaware case was dismissed, the North Carolina case was stayed again in January 2003. That’s because related litigation filed in December 2000 in the Eastern District of Missouri, Monsanto Co. v. Bayer BioScience, was on appeal to the U.S. Court of Appeals for the Federal Circuit.

The plaintiff filed a separate related patent infringement case in May 2000 in the Middle District of North Carolina, Aventis Crop Project v. Pioneer Hi-Bred International, and later added Dow as a defendant

Osteen cited the Missouri litigation in his recent fee ruling. In that case, Monsanto sought a declaratory judgment that its insect resistant seeds didn’t violate four Bayer patents. Monsanto also asked to court to declare all of Bayer’s patents invalid and unenforceable because of Bayer’s false affidavits to the PTO about the patents. Bayer’s counterclaim alleged that Monsanto infringed the four patents.

The Missouri court granted summary judgment to Monsanto in December 2002 on the inequitable conduct issue.

The Federal Circuit reversed and remanded the case because of factual issues.

Bayer then dismissed its infringement counterclaims for three patents, and a jury ruled for Monsanto on the fourth.

Following a bench trial, the court held all four Bayer patents invalid and unenforceable because of inequitable conduct. In April 2007, that court awarded Monsanto $8.4 million in attorney fees and about $139,000 in costs. The Federal Circuit affirmed that award in 2008.

In the Aventis North Carolina case, the court ordered Bayer to pay $4.9 million of Dow’s attorney fees and costs in June 2010.

Dow’s lawyers at Orrick, Herrington & Sutcliffe and Jonathan Berkelhammer, a Greensboro, N.C., attorney at Smith Moore Leatherwood, referred questions to Dow AgroSciences.

In a press release, Dow AgroSciences vice president and general counsel William Wales stated, “We are pleased with the ruling, which supports Dow AgroSciences and its Affiliates providing important insect protection products to U.S. farmers.”

John Morrow Jr., a Winston-Salem, N.C., lawyer who heads Womble Carlyle Sandridge & Rice’s intellectual property litigation group, filed Bayer’s response to Dow’s fee motion. He declined to comment. Bayer did not respond to requests for comment.

Sheri Qualters can be contacted at squalters@alm.com.