Monsanto Patent Ruled Invalid by Federal District Court

Novartis Press Release 30jun98

WILMINGTON, Del. -- Today's verdict of a federal jury means that Novartis Seeds, Inc. is free to sell NK Brand Bt corn seed with KnockOut (Bt 176).

Novartis Seeds, Inc. will not be required to pay royalties to Monsanto (NYSE: MTC) for KnockOut corn sales. "Today's jury verdict clarifies that Monsanto has not been issued any patents which can stop the Novartis KnockOut Bt technology," said Edward T. Shonsey, president and CEO of Novartis Seeds. The verdict also presents Novartis with the opportunity to license its KnockOut insect protection technology to other seed companies.

The Novartis Seeds, Inc. Bt corn with KnockOut was the first insect- resistant technology to the marketplace in 1995. "The jury's finding vindicates the important work Novartis scientists do to provide better products to farmers," Shonsey added.

The jury invalidated Monsanto's patent claiming certain modifications to Bt genes, which allow the genes to function better in insect-resistant plants. The jury determined that Monsanto was not the first company to make such modifications. Consequently, the jury refused Monsanto's demand for $12 per bag in damages from Novartis and Mycogen Corporation (Nasdaq: MYCO), a co- defendant in the suit.

The lawsuit, filed by Monsanto against the former Ciba-Geigy and Agrigenetics (now Mycogen), alleged that certain corn seed products containing the Novartis proprietary KnockOut Bt corn technology infringed Monsanto's U.S. patent.

Only four of the 12 claims in the patent were presented to the jury. Last week, in order to avoid a jury verdict regarding the validity of the remaining eight claims, Monsanto promised not to sue Novartis, Mycogen or their customers for any product concerning these claims ever again.

This agreement was confirmed in an order by the trial judge. "It's unfortunate that two research-oriented companies must squander resources on litigation," Shonsey said. "Novartis would prefer to settle legal differences with our competitors out of the courtroom."

Still pending before the judge in the case are charges by Novartis that Monsanto withheld crucial information from the U.S. Patent and Trademark office about a previous invention. Novartis contends that another group of researchers invented the genes claimed in Monsanto's patent before Monsanto.