bayer cropscience ag v. dow agrosciences, llc, c.a. no. 12-256 (rmb/js) (d. del. mar. 13, 2015)

8/9/2019 Bayer CropScience AG v. Dow Agrosciences, LLC, C.A. No. 12-256 (RMB/JS) (D. Del. Mar. 13, 2015)

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NOT FOR PUBLI CATI ON [ Docket Nos. 317, 374 & 384]

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

BAYER CROPSCI ENCE AG, et al . ,P l a i n t i f f s ,

v.

DOW AGROSCI ENCES LLC,

Def endant .

Ci vi l No. 12- 256 ( RMB/ J S)

OPINION

Appear ances:

Rober t J . KochStephani e R. AmorosoEdward J . Mayl eMi l bank, Tweed, Hadl ey &McCl oy LLP

1850 K St r eet NW, Ste. 1100Washi ngton, DC 20006

Fredr i ck M. Zul l owChr i st opher J . GasparMi l bank, Tweed, Hadl ey &McCl oy LLP

1 Chase Manhat t an Pl azaNew Yor k, New Your 10005

Freder i ck L. Cot t rel l , I I I J ef f r ey L. Moyer Tr avi s S. Hunt erRi char ds, Layton & Fi ner , P. A.One Rodney Squar e 920 Nor t h

Ki ng St r eetWi l mi ngt on, DE 19801

Pet er A. Bi cks J ames L. StengelAl ex V. ChachkesOr r i ck, Her r i ngt on &Sut cl i f f e LLP

51 West 52nd StreetNew Yor k, New Yor k 10019

El i zabeth A. HowardOr r i ck, Her r i ngt on &Sut cl i f f e LLP

1000 Mar sh Road

Menl o Par k, Cal i f orni a 94025

St even J . Bal i ckLaur en E. Magui r eAndr ew C. MayoAshby & Geddes500 Del aware Avenue, 8t h Fl oorP. O. Box 1150Wi l mi ngt on, DE 19899

At t orneys f or Def endantAt t orneys f or Pl ai nt i f f s

Bumb, J . ( by desi gnat i on) :

Thi s mat t er i s bef or e t he Cour t upon a Repor t and

Recommendat i on i ssued by t he Honorabl e J oel Schnei der , Uni t ed

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St at es Magi st r at e J udge [ Docket Nos. 374, and 384 ( Amended) ]

( “Repor t and Recommendat i on”) r el at i ng t o Def endant Dow

Agr osci ences, LLC’ s ( “Dow”) Mot i on f or Fees and Cost s as

Pr evai l i ng Par t y [ Docket No. 317] agai nst Pl ai nt i f f s Bayer

Cr opsci ence AG, et al . ( “Bayer ”) . Bayer has f i l ed i t s

Obj ect i ons t o t he Repor t and Recommendat i on [ Docket No. 388]

( “Bayer Obj . ”) . J udge Schnei der f ound t hat based on t he

t ot al i t y of t he ci r cumst ances, Bayer ’ s Compl ai nt was “so pl ai nl y

non- mer i t or i ous t hat no r easonabl e par t y or at t or ney coul d

r eal i st i cal l y expect success. Bayer ’ s compl ai nt shoul d not have

been f i l ed. The except i onal natur e of t he case i s compounded by

t he l ack of pre- sui t due di l i gence. ” Repor t and Recommendat i on,

at 19. For t he r easons t hat f ol l ow, t he Cour t adopt s J udge

Schnei der ’ s Repor t and Recommendat i on and wi l l awar d f ees t o

Dow. The Cour t r eser ves on t he amount t o be awar ded.

I .

Pr ocedur al Hi st or y

On J une 29, 2012, Bayer f i l ed t he wi t hi n pat ent

i nf r i ngement sui t agai nst Dow. The Compl ai nt al l eged

i nf r i ngement by Dow of seven pat ent s owned by Bayer i nvol vi ng

cer t ai n soybean t echnol ogy, speci f i cal l y t he dmmg gene t hat

conf er s r esi st ance t o t he her bi ci de gl yphosat e. The Compl ai nt

sought t o enj oi n Dow f r om sel l i ng i t s Enl i st E3 soybean seeds

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t hat cont ai n a “Tr i pl e Gene Event ” whi ch i ncl udes t he dmmg gene. 1

On Oct ober 17, 2013, t hi s Cour t grant ed summar y j udgment i n

f avor of Dow. Bayer appeal ed, and t he Cour t of Appeal s f or t he

Feder al Ci r cui t af f i r med wi t hout opi ni on.

A.

Pre- Compl ai nt Conduct

I n t he ear l i er f i l ed Bayer I , see n. 1, Bayer f i l ed a mot i on

f or l eave t o add i nf r i ngement cl ai ms r el at i ng t o the seven

pat ent s cover i ng t he dmmg gene. The par t i es spent mont hs

br i ef i ng t he mot i on, but f our days bef or e t he hear i ng on t he

mot i on, Bayer wi t hdr ew i t . Bayer t her eaf t er f i l ed a separ at e

l awsui t ( t hi s one) whi ch was assi gned to t he Honor abl e Ri char d

G. Andr ews. The case was event ual l y r eassi gned t o t hi s Cour t

1 As t he name i mpl i es, t he Tr i pl e Gene Event compr i ses t hr eeher bi ci de- r esi st ant genes. ( The gene’ s i nt egr at i on i nt o t hepl ant cel l ’ s chr omosome i s cal l ed an “event . ”) The f i r st gene,“aad-12, ” conf er s r esi st ance t o t he her bi ci de “2,4-D. ” Bayerhad sued Dow f or i nf r i ngement of i t s pat ent cover i ng t hi s genei n Bayer Cr opsci ence Ag v. Dow AgroSci ences LLC, Docket No. 10-1045 ( RMB) ( D. Del . ) bef or e t hi s Cour t ( “Bayer I ”) . Thi s Cour tf ound non- i nf r i ngement , and t he Feder al Ci r cui t af f i r med. Thesecond gene, “ pat, ” conf er s r esi st ance t o t he her bi ci de“gl uf osi nat e. ” Bayer has asser t ed i nf r i ngement of f our of i t spat ent s cover i ng t hi s gene agai nst Dow i n t he East er n Di st r i ctof Vi r gi ni a. See Bayer Cr opSci ence Ag v. Dow Agr oSci ences LLC,No. 12- 47 ( RAJ ) ( E. D. Va. ) ( Bayer I I I ) . Wi t hi n days of t hef i l i ng of t he Compl ai nt her e, t he Cour t i n t he East er n Di st r i ctof Vi r gi ni a gr ant ed Dow’ s mot i on t o st ay t he case pendi ngar bi t r at i on under t he par t i es’ l i cense agr eement . The t hi r dgene, “dmmg , ” i s t he subj ect of t he wi t hi n sui t i nvol vi ng sevenof Bayer ’ s pat ent s r el at ed t o t hi s gene.

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who had al r eady become f ami l i ar wi t h t he subj ect mat t er as a

r esul t of Bayer I . 2

B. Compl ai nt : Mot i on t o Di smi ss

Shor t l y af t er t he Compl ai nt was f i l ed, Dow f i l ed a Mot i on

t o Di smi ss t he Compl ai nt bef ore J udge Andr ews. [ Docket No. 8] .

J ust as i t had ar gued i n i t s opposi t i on t o Bayer ’ s Mot i on t o

Amend t he Compl ai nt i n Bayer I , Dow ar gued t hat i t had a 2008

subl i cense t hat aut hor i zed i t t o mar ket i t s E3 pr oduct . Thus,

i t di d not i nf r i nge. Mor e speci f i cal l y, Dow ar gued t hat i t had

a subl i cense r el at ed t o Bayer ’ s pat ent s t o wor k wi t h MS

Technol ogi es, LLC ( “MS Tech”) t o devel op a new soybean pr oduct .

Dow ci t ed a May 28, 2004, Agr eement wherei n Bayer gr ant ed MS

Tech a br oad l i cense under i t s seven dmmg pat ent s t o make and

commer ci al i ze soybean pr oduct s havi ng t he gl yphosat e t ol er ance

gene as wel l as an equal l y br oad r i ght t o subl i cense such r i ght s

( t he “Agr eement ”) . Under a der i vat i ve 2008 subl i censi ng

agr eement bet ween MS Tech and Dow, Dow devel oped t he Tr i pl e Gene

Event ( E3 soybeans) on behal f of MS Tech, wi t h MS Tech pr ovi di ng

t he dmmg gene and Dow provi di ng t he aad-12 and pat genes.

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Dow does not base i t s mot i on f or at t orney’ s f ees based ont hi s pr e- compl ai nt conduct nor di d J udge Schnei der base hi sr ecommendat i on on such conduct . Thi s Cour t , t oo, does not awardany f ees r el at i ng t o such conduct but i t cannot hel p butquest i on Bayer ’ s deci si on t o l i t i gat e agai nst one def endant ,Dow, f or i t s al l eged i nf r i ngement of t hr ee di f f er ent t r ai t s i nt he E3 pr oduct – 2,4-D, gl yphosat e, and gl uf osi nat e – i n t woseparat e f orums.

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Bayer opposed t he Mot i on t o Di smi ss bef ore J udge Andr ews,

r ai si ng sever al poi nt s. I n r el evant par t , Bayer ar gued t hat

pur suant t o i t s r el at ed agr eement wi t h St i ne Seed Far m, I nc.

( “St i ne”) , onl y St i ne, not MS Tech, coul d mar ket seeds under

Bayer ’ s pat ent s. Speci f i cal l y, Bayer ar gued:

Bayer gr ant ed to MS Tech excl usi ve r i ght s t o creat e( and t o subcont r act t o t hi r d par t i es t o cr eat e)soybean event s usi ng Bayer ’ s t echnol ogy. MS Tech hasaddi t i onal r i ght s t o “expl oi t ” t he t echnol ogy, whi chi ncl ude act i vi t i es such as br eedi ng or usi ng pl ant si ncor por at i ng t he t echnol ogy, f or exampl e, t o obt ai nr egul at or y appr oval s or f or ot her exper i ment alpur poses. However , r i ght s i nci dent t o t he commer ci alsal e of soybean seeds i ncor por at i ng Bayer ’ s t echnol ogywere not gi ven di r ect l y t o MS Tech. Those r i ght s wer egi ven onl y to St i ne but cannot be sublicensed .

[ Docket No. 11, at 6] ( emphasi s added) .

Bayer accused Dow of a “gr oss mi sunderst andi ng of t he

l i censi ng ar r angement among Bayer , MS Tech and St i ne. ” [ I d. at

8] . Bayer di d not mi nce words:

These cont r act ual pr ovi si ons unambi guousl y r ef l ectBayer ’ s del i ber at e choi ce t o al l ow St i ne - - and onl ySt i ne - - t o mar ket and sel l t r ansgeni c soybean seedst hat use Bayer t echnol ogy under a St i ne br and or abr and of a St i ne af f i l i at e. The “wi t h t he except i onof t he r i ght s . . . gr ant ed t o St i ne by separ at eagr eement ” cl ause shoul d have al er t ed [ Dow] , atmi ni mum, t hat MS Tech’ s l i cense f r om Bayer was notunr est r i cted.

[ I d. at 7] ( emphasi s added) .

Af t er conduct i ng oral argument , J udge Andr ews hel d t hat

Dow’ s subl i cense def ense was a “f actual ” one t hat pr event ed t he

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Cour t f r om goi ng beyond t he pl eadi ngs at t he mot i on t o di smi ss

st age. [ Docket No. 26] .

C. Mot i on f or Pr el i mi nar y I nj unct i on

J udge Andr ews t hereaf t er enter ed a schedul i ng or der

[ Docket No. 39] t hat est abl i shed Febr uar y 28, 2014, as t he

di scovery deadl i ne. However , wi t hi n one mont h of t he schedul i ng

or der , and i n t he mi dst of di scover y, Bayer f i l ed a mot i on f or a

pr el i mi nar y i nj unct i on. [ Docket No. 51] . Bayer di d so, knowi ng

t hat J udge Andr ews had set t he di scover y deadl i ne f or Dow’ s

subl i censi ng def ense f or Apr i l 4, 2013, and t he par t i es wer e i n

t he mi dst of ext ensi ve di scover y ( i ncl udi ng di scover y di sput es) .

Dow argued t hat Bayer ’ s mot i on “t hr eaten[ ed] t o unr avel t he

di scover y. ” [ Docket No. 61] . Bayer r esponded, however , t hat

Dow di d “not need any di scover y beyond what Bayer has al r eady

pr ovi ded t o addr ess Bayer ’ s l i kel i hood of success on t he

mer i t s. ” [ Docket No. 65] .

D. Summar y J udgment

Dur i ng t he pendency of t he pr el i mi nar y i nj unct i on mot i on,

t he case was t r ansf er r ed t o t hi s Cour t . The Cour t est abl i shed

new deadl i nes and per mi t t ed the f i l i ng of a mot i on f or summary

j udgment by Dow based on i t s l i censi ng agr eement def ense. On

May 9, 2013, Dow f i l ed a mot i on f or summar y j udgment . The Cour t

conduct ed a t wo- day hear i ng on J une 13- 14, 2013. On Oct ober 7,

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2013, t he Cour t grant ed Dow' s mot i on f or summar y j udgment .

[ Docket Nos. 268 ( Opi ni on ( “Op. ”) and 269 ( Or der ) ] .

I n i t s summary j udgment Opi ni on, t hi s Cour t agr eed t hat Dow

had a val i d subl i cense f r om MS Tech t o devel op and sel l E3. The

Cour t f ound t hat t her e wer e no mat er i al f act s i n di sput e. Op.

at 16. The Cour t al so f ound t hat t he ar gument s Bayer had made

wer e j ust t hat , ar gument s: “t hi s Cour t has por ed over t he r ecor d

f or obj ecti ve evi dence t o suppor t Pl ai nt i f f ’ s ar gument s . . . i t

has f ound none. ” Op. at 18, n. 10. The Cour t hel d t hat t he

Agr eement ’ s l i cense pr ovi si on was “subj ect t o onl y one

r easonabl e i nt er pr et at i on [ - Dow’ s] ” and that Dow’ s

i nt er pr et at i on was t he onl y one “consi st ent wi t h t he f act ual

mat r i x and t he [ Agr eement ’ s] busi ness pur pose. ” See Op. at 16

n. 6 and 22. The Cour t f ur t her set f or t h seven r easons why

Bayer ’ s posi t i on on t he l i cense f ai l ed under Engl i sh l aw, whi ch

t he par t i es agr eed gover ned. I n sum, t he Cour t f ound t hat

Bayer ’ s posi t i on was cont r ar y t o the pl ai n l anguage and busi ness

pur pose of t he Agr eement , and t hat Bayer ’ s argument s r est ed on

cont or t ed t heor i es t hat amount ed t o not hi ng more t han

di s t r act i on.

E.

Mot i on f or At t or ney’ s Fees

On May 19, 2014, af t er t he Feder al Ci r cui t ’ s af f i r mance of

t hi s Cour t ’ s Opi ni on and t he Supr eme Cour t ’ s deci si on i n Oct ane

Fi t ness, LLC v. I CON Heal t h & Fi t ness, I nc. , 134 S. Ct . 1749

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[ D] i st r i ct [ J ] udge i n t hi s sense: no pr esumpt i on of val i di t y

appl i es t o t he [ M] agi st r at e' s f i ndi ngs or r ecommendat i ons. ”

Gr eene v. WCI Hol di ngs Corp. , 956 F. Supp. 509, 514 ( S. D. N. Y.

1997) ( quot i ng 7. 2 J ames Wm. Moor e, Moor e' s Feder al Pract i ce, 1

72. 04[ 10. –2] , at 72–96 (1995) .

B.

“Except i onal Case”

Pur suant t o 35 U. S. C. § 285, “[ t ] he cour t i n except i onal

cases may award r easonabl e at t orney f ees t o the pr evai l i ng

par t y. ”3 Whet her a case i s except i onal i s t o be det er mi ned on a

case- by- case basi s, consi der i ng t he t ot al i t y of t he

ci r cumst ances. Oct ane Fi t ness, LLC v. I CON Heal t h & Fi t ness,

I nc. , 134 S. Ct . 1749 ( 2014) . Ther e i s “no pr eci se r ul e or

f ormul a f or maki ng” a det er mi nat i on as t o whet her a case i s

except i onal . Bi ax Corp. v. Nvi di a Corp. , 2015 WL 755940, *2

( Fed. Ci r . Febr uar y 24, 2015) ( ci t i ng Oct ane Fi t ness) . An

except i onal case i s one t hat “st ands out f r om ot her s wi t h

r espect t o t he subst ant i ve st r engt h of a par t y' s l i t i gat i ng

posi t i on . . . or t he unr easonabl e manner i n whi ch t he case was

l i t i gat ed. ” I d. ci t i ng Octane Fi t ness, 134 S. Ct . at 1756) .

The Supr eme Cour t has ci t ed a number of nonexcl usi ve

f act or s di st r i ct cour t s may consi der , i ncl udi ng “f r i vol ousness,

mot i vat i on, obj ect i ve unr easonabl eness ( bot h i n t he f act ual and

l egal component s of t he case) and t he need i n par t i cul ar

3 Ther e i s no di sput e t hat Dow i s t he pr evai l i ng par t y here.

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ci r cumst ances t o advance consi derat i ons of compensat i on and

det er r ence. ” I d. at 1756 n. 6. Fur t her , “[ d] i st r i ct cour t s may

det er mi ne whet her a case i s except i onal i n case- by- case

exer ci ses of t hei r di scr et i on, consi der i ng t he t ot al i t y of t he

ci r cumst ances. ” I d. at 1756. Because t he except i onal case

desi gnat i on i s gui ded by t he di st r i ct cour t ’ s “bet t er

posi t i on[ ] ” t o deci de t he i ssue, t he f i ndi ng i s commi t t ed t o t he

sound di scret i on of t he di st r i ct cour t . Hi shmak I nc. v. Al l car e

Heal t h Management Syst em, I nc. , 134 S. Ct . 1744, 1748 (2014) .

Pat ent l i t i gant s ar e onl y requi r ed t o est abl i sh t hei r

ent i t l ement t o f ees by a pr eponder ance of t he evi dence. Oct ane

Fi t ness, 134 S. Ct . at 1749, 1756.

Among t he most commonl y ci t ed ways t o est abl i sh

except i onal i t y ar e: ( 1) establ i shi ng t hat t he pl ai nt i f f f ai l ed

t o conduct an adequat e pr e- f i l i ng i nvest i gat i on or t o exer ci se

due di l i gence bef or e f i l i ng sui t ( see, e. g. , Yuf a v. TSI I nc. ,

No. 09- 01315, 2014 WL 4071902, at *3 ( N. D. Cal . Aug. 14, 2014) ) ;

( 2) showi ng t he pl ai nt i f f shoul d have known i t s cl ai m was

mer i t l ess and/ or l acked subst ant i ve st r engt h ( i d. ) ; ( 3)

evi denci ng t he pl ai nt i f f i ni t i at ed l i t i gat i on t o ext r act

set t l ement s f r om def endant s who want t o avoi d cost l y l i t i gat i on

( Summi t Dat a Sys. , LLC v. EMC Cor p. , No. 10- 749, 2014 WL

4955689, at *3- 4 ( D. Del . Sept . 25, 2014) ) ; ( 4) showi ng a par t y

pr oceeded i n bad f ai t h ( Pur e Fi shi ng, I nc. v. Nor mar k Cor p. ,

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No. 10- 2140, 2014 WL 5474589, at *4 ( D. S. C. Oct . 28, 2014)

( not i ng t hat bad f ai t h i s no l onger r equi r ed t o suppor t an awar d

of f ees but f i ndi ng t he pl ai nt i f f ’ s posi t i on was not

r easonabl e) ) ; and ( 5) l i t i gat i on mi sconduct ( Logi c Devi ces, I nc.

v. Appl e I nc. , No. 13- 02943, 2014 WL 6844821, at *4 ( N. D. Cal .

Dec. 4, 2014) ) .

C. Di scussi on

1. Obj ect i ons t o Award

Bayer f i r st obj ect s t o the Repor t and Recommendat i on on t he

gr ounds t hat “onl y by exagger at i on of an ot her wi se beni gn r ecord

coul d t hi s case be deemed except i onal . ” Bayer Obj . at 2. The

Cour t f l at l y r ej ect s Bayer ’ s nonpeni t ent vi ew. Thi s Cour t

conduct ed a t wo- day hear i ng on t he mot i on f or summar y j udgment .

Bayer opposed summar y j udgment on sever al grounds. Bayer ’ s

case, however , became mor e anemi c upon revi ew of each pi ece of

evi dence. Bayer ’ s own wi t nesses as wel l as key document s

cont r adi ct ed Bayer ’ s cont or t ed r eadi ng of t he cont r act .

Second, Bayer cont ends t hat both t hi s Cour t and t he Feder al

Ci r cui t wer e wr ong and ar gues t hat Bayer di d, i n f act , r et ai n

i t s pat ent s. As such, i t ar gues, t hi s evi dence suppor t s Bayer ’ s

underst andi ng t hat MS Tech’ s commerci al i zat i on wi t h Dow

i nf r i nged i t s r et ai ned pat ent s. Bayer pet t i f ogs. Thi s ar gument

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i s a red- her r i ng and must be put t o r est . 4 Fi r st , thi s Cour t

r ul ed i n i t s Opi ni on t hat t he recor d was cl ear and undi sput ed

t hat i n 2003 Bayer had made t he deci si on t o get out of t he

soybean busi ness. I n connect i on t her ewi t h, Bayer sol d t he

gl yphosat e soybean event s and the I P r i ght s t hat came associ ated

wi t h t hem. Yet , i n t he f ace of such evi dence, Bayer cont i nues

t o ar gue ot her wi se, t hat MS Tech coul d not sel l t he pr oduct

because Bayer r etai ned t he pat ent s. But even assumi ng Bayer di d

r et ai n such r i ght s - an ar gument t hat appear s t o have onl y f i r st

appear ed on appeal – i t i s not mat er i al : t he r ecor d was

undi sput ed t hat Bayer gr ant ed MS Tech an excl usi ve l i cense t o

sel l t he pr oduct associ at ed wi t h t hose pat ent s. I n ot her wor ds,

t hat Bayer r et ai ned owner shi p of t he pat ent s associ at ed wi t h t he

dmmg t echnol ogy i s i mmater i al t o whet her Bayer nonet hel ess

gr ant ed an excl usi ve l i cense t o MS Tech t o commer ci al i ze pr oduct

under t hose pat ent s.

Bayer ’ s own wi t nesses conf i r med such concl usi on whi ch t hi s

Cour t f ound was consi st ent wi t h t he pl ai n text of t he Agr eement .

Fi r st , Mar gar et Keat i ng, Bayer ’ s i n- house counsel , conf i r med

t hi s under st andi ng at her deposi t i on. 5 Second, Davi d Mor gan,

4 Bayer unsuccessf ul l y ar gued t hi s poi nt bef or e the Feder alCi r cui t as wel l .

5 Q. Goi ng back t o what was on your mi nd i n 2003, 2004,

di d Bayer car e how MS Tech and St i ne di vi ded up theasset s and I P that i t was acqui r i ng?

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Q. And as - - and as one of t he key busi ness peopl er esponsi bl e f or t hi s di vest i t ur e, i s i t your vi ew t hatt hat ki nd of l i censi ng t hat you di scussed wasper mi ssi bl e under t hese t r ansact i ons?

A. Yes. I mean I - - I t hi nk i t was rel at i vel y bl ackand whi t e cer t ai nl y i n my mi nd that we wer e di vest i ngt hese asset s. [ MS Tech/ St i ne] was acqui r i ng t heseassets and, of cour se, t he val ue of t hese asset s f or[ MS Tech/ St i ne] was i n [ t he] abi l i t y t o make f ul l useof t hem.

Docket No. 320- 7, at 61- 62 ( emphasi s added) .

Morgan cont i nued:

[ I ] n t he di vest ment of par t i cul ar l y t he . . .gl yphosat e event t hat was . . . sol d t o Mr . St i ne,t hat he woul d t her eby have t he r i ght s t o use t hat i nt he f ut ur e devel opment of hi s busi ness however he sawt hat appr opr i at e t o evol ve . . . .Q. And as t he busi ness per son who was i n char ge oft hi s t r ansact i on, was that your under st andi ng andi nt ent ?A. Yes, i t was. I t seems i ncongr uous t hat we woul dsel l an asset t o somebody, r ecei ve r emuner at i on f ort he sal e, and t hen somehow pr event t he acqui r er f r om

maki ng use of t he asset he j ust acqui r ed.

I d. at 91 ( emphasi s added) . 7

Docket No. 320- 7, at pages 33, 34.

7 I t i s cl ear t hat Morgan spoke of St i ne and MS Techi nt er changeabl y.

“Sor r y. I used t he wor d St i ne col l ect i vel y as t hecompani es t hat const i t ut e t he St i ne gr oup ofcompani es, so t hat does absol ut el y i ncl ude MS Tech andMer t ec on - - on t hat si de of t he St i ne busi ness. . .So we under . . . we underst ood or we underst ood t hatMS Tech and Mer t ec wer e l egal ent i t i es wi t hi n t heSt i ne gr oup who woul d be si gnator i es t o t heset r ansact i ons as appr opr i at e.

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The evi dence was f ur t her undi sput ed t hat upon si gni ng t he

deal , Mor gan wr ot e a congr at ul at or y e- mai l t o St i ne on J une 4,

2014. [ Docket No. 321- 1, page 2] ( “We wi sh you every success i ncapt ur i ng t he i nt r i nsi c val ue t hat t hese asset s pr omi se. We

wer e di sappoi nt ed t hat Bayer was unabl e to conver t t hat

pot ent i al gi ven our ( l ack of ) mar ket pr esence, but we ar e

convi nced t hat i n your capabl e hands t hese ‘ pr oduct s’ wi l l f i nd

t hei r t r ue wor t h i n t he mar ket ”) ( emphasi s added) . Cf . , Vi ncent

Tur r i es, Bi oSci ence Management and Di vest ment Team [ Docket No.

321- 1, page 3] ( “The cl osi ng i s now done and t he seeds have been

sent . ”) ( emphasi s added) .

Thus, t he r ecor d was cl ear t hat Bayer had conveyed t he

event s and I P associ at ed wi t h t hose event s t o St i ne and MS Tech

f or t he pur pose of put t i ng pr oduct i nt o t he mar ket . The

argument now asser t ed by Bayer , t hat because i t r et ai ned t he

pat ent r i ght s i t was j ust i f i ed i n br i ngi ng an i nf r i ngement case

agai nst Dow, i s f al l acy. Even assumi ng i t di d r et ai n such

patent r i ght s, t her e was no di sput e t hat when Bayer sol d t he

event s i t al so conveyed t he I P r i ght s t o make use of t he event s.

The t r ansact i on made no busi ness sense, ot herwi se. As Mor gan

expl ai ned:

So her e’ s a physi cal har d asset . I n or der f or you t o

I d. at 92.

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make use of t hi s hard asset , we of cour se woul d needt o gi ve you t he r i ght s under our i nt el l ect ual pr oper t yest at e f or you t o make use of t hese asset s.

I d. at 12- 22.

Moreover , as J udge Schnei der cor r ect l y f ound, Bayer ’ s

argument s wer e i mpl ausi bl e gi ven t he si gni f i cant amount s of

money pai d. I t made no commer ci al sense f or MS Tech t o pay

one mi l l i on dol l ar s onl y f or devel opment r i ght s. And as

t hi s Cour t f ound, i t made l i t t l e sense t o def i ne “expl oi t ”

br oadl y i f t he par t i es’ i nt ent was f or MS Tech t o have much

mor e l i mi t ed r i ght s.

Wi t nesses, other t han Bayer ’ s wi t nesses, shar ed t he same

vi ew of t he Agr eement . J oseph Sal ur i , MS Tech’ s corporate

counsel at t he t i me t he agr eement was negot i at ed, t est i f i ed at

hi s deposi t i on t hat t he par t i es under st ood MS Tech coul d market

t he soybean product . 8

8 Q. And i f you ment i on t her e’ s an except i on, what i st hat i n 3. 1. 2?A. So, as we saw on t hat di vest ment schedul e, t heear l i er exhi bi t , t hat St i ne Seed Far m had pai d apor t i on of t he t ot al of di vest ment dol l ar s f or a r i ghtt o i ncrease, mar ket , di st r i but e f or sal e, of f er f orsal e. And i t ’ s a di f f er ent def i ni t i on of “expl oi t , ”but t hey ar e r i ght s grant ed t o St i ne by a separ at eagr eement t hat was executed as par t of t he 14 or soagr eement s si gned at t he concl usi on of t he di vest ment .Q. So i f somebody t ol d you t hat t hi s except i on t oSt i ne l i mi t ed MS Tech’ s r i ght s i n any way, how woul dyou r espond?A. That t hat ’ s r i di cul ous.Q. Why i s t hat t he case?A. Because t hat was cl ear l y not t he i nt ent .

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Mor eover , Edward Mansf i el d, now a si t t i ng I owa Supr eme

Cour t J ust i ce, and t hen a cont r act l aw pr of essor who worked on

t he deal and deal t di r ect l y wi t h Keat i ng, t est i f i ed at hi s

deposi t i on t hat i t was ver y cl ear t o al l par t i es i nvol ved i n

2004 that MS Tech had t he r i ght t o commerci al i ze: 9

Q. I t says, “an except i on. ” Except i on t o what ?A.

I t ’ s an except i on t o t he excl usi vi t y. St i ne hadnegot i at ed a r i ght t o sel l and mar ket pr oduct s t hatwoul d have been t aken f or war d by MS Technol ogi es under

t hi s exhi bi t her e.Q. And t hen i n t he agr eement wi t h St i ne, t he l i censewi t h St i ne f r om Bayer , St i ne has t o go t o MS Tech andget a l i cense, and t hen t hey coul d mar ket , di st r i but eand sel l , but t hey have no r i ght t o subl i cense, t heyhave no r i ght t o br eed, t hey have no r i ght t o do someof t he ot her br oad al l owances under t he def i ni t i on of“expl oi t ” i n t hi s Exhi bi t 502.Q. Okay. I f someone t ol d you t he l i cense i n 3. 1. 2 i st o event s but not seeds, and i t excl udes seeds, whatwoul d you say t o that ?

A.

I woul d say t hat t hat i s pr obabl y bi ol ogi cal l yi mpossi bl e and nonsensi cal .Q. Why i s t hat?A. Because soybean event s ar e necessar i l y seed.

Si gwor t h Decl ar at i on, Sal ur i Dep. , at 41- 43.

9 Q. Al l r i ght . I s t her e any quest i on i n your mi nd t hatMS Tech had t he r i ght t o subl i cense t o t hei r par t i es,i ncl udi ng our cl i ent , Dow Agr oSci ences, t he r i ght t ocommer ci al i ze t hi s Gl yphosat e- Tol er ant Technol ogyt hat ’ s t al ked about i n t hi s agr eement ?A.

No, I di d not have a quest i on.Q. And you’ r e bot h an exper i enced l awyer and al so a j udge; you know t hat t here’ s some cases where you si tt her e and you say, “Thi s i s a cl ose cal l , ” and t her ear e ot hers where you say, “Come on. Thi s i s what t heagr eement says on i t s f ace. ” Wi t hi n t hat spect r um ofr eal di sput es ver sus ones t hat seem t o be ki nd ofcover ed by t he pl ai nt i f f - -

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Fi nal l y, Har r y St i ne, an of f i cer of St i ne Seed and busi ness

par t ner i n t he deal , t est i f i ed at hi s deposi t i on:

Q. So j ust t o sum i t al l up, t el l me how you f eelabout Bayer ’ s posi t i on t hat 3. 1. 2 al l ows MS Tech t oexpl oi t MS Soybean Event s, meani ng event s, but notseeds.A. From my per spect i ve, t hat ’ s an absol ut el yr i di cul ous, unr easonabl e, and never consi der eddef i ni t i on t her e.

Docket No. 321- 5, at 51- 52 ( St i ne Dep. )

Q. And what do you t hi nk of Bayer ’ s posi t i on t hat non-excl usi ve her e means t hat Bayer kept r i ght s?A.

That was never ever di scussed and never ever agreedt o and never ever br ought up dur i ng t he al most 10year s s i nce we have si gned t hi s.Q. Woul d t hat have made commer ci al sense?A. No.

I d. at 60.

Q. - - i n t er ms of t he agr eement , can you t el l uswher e you t hi nk t he quest i on f i t s i n?

A.

I t hi nk t hi s was ver y cl ear i n 2004 t hat MS Techhad t hose r i ght s.Q. Di d anybody at Bayer , dur i ng t hat f our - mont h per i odof t i me that you wer e i nvol ved, ever say t o you i nwor ds or subst ance t hat MS Tech coul d not subl i censet he r i ght t o commer ci al i ze t hi s t echnol ogy?A. No.Q. Was t he r i ght t o subl i cense the commer ci al i zat i onpr ospect f or t hi s t echnol ogy f or MS Tech a si gni f i cantpar t of t hi s deal ?A. Yes.

Q. And can you expl ai n t o us why?A. Wel l , f or one t hi ng, MS Technol ogi es, as Iunder st ood i t , was not a huge company. And t her ecoul d wel l be a desi r e t o work wi t h ot her compani es i nor der t o br i ng t hese gl yphosat e- r esi st ant t r ai t s t omarket .

Docket No. 322- 1, Ex. T. Mansf i el d Dep. at pages 41- 43.

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I n sum, Bayer ’ s ar gument t hat i t r et ai ned t he pat ent s and

t her ef or e was j ust i f i ed i n pur sui ng i t s case agai nst Dow i s a

f al l aci ous one. Ther e was not one pi ece of evi dence t o suppor t

Bayer ’ s posi t i on t hat even i f i t r et ai ned t he pat ent s, MS Tech

coul d not make use of t hem i n i t s commer ci al i zat i on ef f or t s.

The busi ness deal made no sense ot herwi se. Bayer ’ s

commerci al i zat i on ar gument was and cont i nues t o be mere

obf uscat i on.

I n yet anot her unf ounded argument , Bayer asked t hi s Cour t

t o i nf er t hat i t mat t er ed t o Har r y St i ne whet her or not MS Tech

commer ci al i zed because: “Har r y St i ne onl y get s 19 per cent ver sus

i f MS Tech doesn’ t sel l t he seed and onl y St i ne sel l s t he seed,

t hen Har r y St i ne get s 100 per cent , so the i nf er ence i s Har r y

St i ne does car e about MS Tech. ” [ 6/ 14/ 13 Hear i ng Tr . 323: 15-

23] . Thi s i nf er ence was mer el y cont r i ved l awyer ar gument . As

t he evi dence demonst r ated, St i ne under st ood t hat t he natur e of

t he rel at i onshi p was t hat MS Tech woul d be abl e t o

commer ci al i ze.

Q. So i f someone tol d t he cour t t hat when you r ead3. 1. 1 t hat t hat meant t hat MS Tech coul dn’ tcommerci al i ze Bayer Soybean Event s and St i ne coul d,

woul d t hat be cor r ect ?A. That woul d be i ncor r ect .

St i ne Dep. 32: 9- 13. St i ne’ s unequi vocal acknowl edgement t hat

MS Tech coul d commerci al i ze obl i t erat ed Bayer ’ s manuf act ur ed

i nf er ence t hat because MS Tech pai d l ess, i t was not gr ant ed

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commer ci al i zat i on r i ght s. Mor eover , t he evi dence showed t hat

Bayer di d not car e how t he asset s were di vi ded bet ween MS Tech

and St i ne. The r ecor d was uncont r over t ed on t hi s poi nt . As

such, Bayer ’ s ef f or t s t o def eat summary j udgment – on t he

gr ounds t hat t he St i ne- MS Tech r el at i onshi p l ef t mat er i al

di sput es of f act - was obj ect i vel y unr easonabl e.

Fur t her , Bayer ’ s ef f or t s i n t hi s l i t i gat i on t o cr eat e an

i ssue as t o MS Tech’ s owner shi p of E3 and t o pr ecl ude summar y

j udgment wer e speci ous f or t he r easons t hi s Cour t pr evi ousl y

ar t i cul at ed. As t hi s Cour t f ound, Bayer ’ s cr eat i ve l awyer i ng

di d “not t r ump t he r eal i t y of t he cl ear under st andi ng bet ween

t he par t i es t o t he MS Tech and Dow cont r act t hat , ul t i mat el y, E3

was made” f or “MS Tech. ” [ Opi ni on, Docket No. 268, at 26] .

Bayer ’ s own wi t nesses conf i r med t hat E3 was made f or MS Tech.

Thi s Cour t i s t r oubl ed by t he cur r ent evi dence bef or e i t

t hat , cont r ary t o t he ar gument s made bef ore thi s Cour t and the

Feder al Ci r cui t , t her e was a “di sput e” as t o whet her E3 was made

by or f or MS Tech, Bayer t ol d t he ar bi t r at i on t r i bunal i n Bayer

I I I , supr a n. 1, t hat “MS Tech has al ways owned t he Enl i st E3

event , ” and t hat t hi s was “undi sput ed. ” See Docket No. 318,

Exhi bi t P, ¶ 178. Thi s Cour t spent consi der abl e t i me addr essi ng

Bayer ’ s ar gument s at t he summar y j udgment st age wher ei n Bayer

di sput ed t he f act t hat E3 was made f or MS Tech. See Opi ni on at

24- 28. That Bayer l at er admi t t ed t hat MS Tech al ways owned E3

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I n sum, Bayer ’ s conduct i n l i t i gat i ng t hi s case i n t he f ace

of evi dence t hat cont r adi ct ed i t s cont or t ed r eadi ng of t he

Agr eement was obj ect i vel y unr easonabl e. The par t i es agr eed t hat

Engl i sh l aw gover ned t he Agreement . That means, bot h t he

nat ur al and or di nary meani ng of t he l anguage and t he backgr ound

or sur r oundi ng ci r cumst ance of t he cont r act – t he so- cal l ed

“f act ual mat r i x” – ar e consi der ed. Op. at 11. Thus, gi ven

Bayer ’ s acknowl edgment t hat Engl i sh l aw governed, Bayer had an

obl i gat i on t o i nqui r e i nt o t he backgr ound or sur r oundi ng

ci r cumst ances of t he Agr eement . I t shoul d have obj ect i vel y

assessed what t he Agreement conveyed t o a “r easonabl e per son

havi ng al l t he backgr ound knowl edge whi ch woul d have r easonabl y

been avai l abl e t o t he par t i es i n t he si t uat i on i n whi ch t hey

wer e at t he t i me of t he cont r act . ” Op. at 12. I t di d not .

Added t o the f act t hat no wi t ness suppor t ed Bayer ’ s const r uct i on

of t he Agr eement , and t hat Bayer ’ s const r uct i on made no

commer ci al sense, Bayer ’ s ( cont i nued) i nt er pr et at i on was

obj ect i vel y unr easonabl e. 10

10 Bayer ’ s cont ent i on t hat i t s own exper t t est i f i ed t hat Bayer ’ s

const r uct i on was cor r ect i s wr ong. I t was cl ear t o t hi s Cour tt hr ough the cr oss- exami nat i on of Lor d Lawr ence Col l i ns t hat hewas unawar e of t he f act ual mat r i x ( “The Cour t : Ri ght . So you’ ve- - you’ ve gi ven an opi ni on but I don’ t get t he sense t hat , youknow, you’ r e so conf i dent i n t hat opi ni on wi t hout r eal l y knowi ngwhat t he f act s ar e because you made a l ot of assumpt i ons. TheWi t ness: I t hi nk t hat ’ s t he pr obl em wi t h an exper t wi t nessgi vi ng a vi ew on t he f acts . . . . ”) S. J . Hear i ng Tr . at 206.

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Bayer def ends i t sel f by cl ai mi ng t hat i t was “unawar e” t hat

Dow had a l i cense unt i l Dow opposed Bayer ’ s mot i on to amend t he

Bayer I Compl ai nt . I f t hat wer e t he case, by Bayer ’ s own

admi ssi on, Bayer had a dut y t o i nvest i gat e such l i cense def ense

bef or e f i l i ng anot her l awsui t . Had Bayer done any due

di l i gence, i t woul d have l ear ned t hat no wi t ness suppor t ed

Bayer ’ s const r uct i on of t he Agr eement and thi s case woul d shoul d

never have been f i l ed. At a mi ni mum, under Bayer ’ s l ogi c, i t

shoul d have di smi ssed t he Compl ai nt when Dow produced t he

amendment on November 20, 2012, mont hs wi t hi n t he f i l i ng of t he

Compl ai nt . [ See Docket No. 21, at Ex. 1] .

Even by t he t i me that Dow had f i l ed i t s Mot i on t o Di smi ss,

Bayer had not i nvest i gat ed Dow’ s l i censi ng cl ai m. 11 Bayer ’ s

l anguage bef or e J udge Andr ews was undul y har sh:

“When t hi s busi ness ar r angement among Bayer and MS Tech and St i ne i s pr oper l y underst ood, al l of DAS’ sargument s unr avel . ”

. . .

“[ Dow has a] gr oss mi sunder st andi ng of t he l i censi ngar r angement among Bayer , MS Tech and St i ne . . . . ”

. . .

“[ R] i ght s i nci dent t o t he commer ci al sal e of soybeans

i ncor por at i ng Bayer ’ s t echnol ogy wer e not gi vendi r ect l y t o MS Tech. Those r i ght s wer e gi ven onl y t oSt i ne but cannot be subl i censed. ”

11 Bayer ’ s r el i ance on J udge Andr ews’ deni al of t he Mot i on t o

Di smi ss i s whol l y mi spl aced. No deci si on on t he mer i t s wasr eached by J udge Andr ews.

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Docket No. 11 at 3, 6 and 8.

However , Bayer ’ s own News Rel ease, dated November 26, 2007,

announci ng t he busi ness ar r angement di r ect l y cont r adi ct ed t he

cl ai ms Bayer asser t ed i n t hi s case. The News Rel ease announced

a “l ong t er m col l abor at i on agr eement [ wi t h MS Tech] t o j oi nt l y

devel op and commer ci al i ze sever al i nnovat i ve t r ai t t echnol ogy

pr oduct s i n soybeans. ” Docket No. 9- 5 ( emphasi s added) . The

News Rel ease quoted St i ne, as t he Di r ect or of MS Tech,

“We ar e exci t ed by t he pot ent i al benef i t s t hi scol l abor at i on wi t h Bayer Cr opSci ence of f er s t o gr ower sand t he i ndust r y”, sai d Har r y H. St i ne, a Di r ect or ofM. S. Technol ogi es. “As a r esul t of t hi scol l abor at i on, soybean gr ower s wi l l have bet t ersol ut i ons t o opt i mi ze pr oduct i vi t y and maxi mi ze peracr e pr of i t s. We ar e pl eased t o be wor ki ng wi t hBayer , whose knowl edge of herbi ci de t echnol ogy andwor l dwi de regul at or y exper t i se wi l l hel p us br i ngt hese novel pr oduct s t o mar ket . ”

I d. ( emphasi s added) . Bayer t akes t he r emar kabl e posi t i on t hat

t he News Rel ease was not i nconsi st ent wi t h t he posi t i on i t t ook

bef ore J udge Andr ews and t hi s Cour t . I t i s. The News Rel ease

set f or t h that Bayer and MS Tech had agr eed to commerci al i ze t he

soybeans. At a mi ni mum, t he 2007 News Rel ease shoul d have put

Bayer on not i ce i n t hi s l awsui t t hat t he commer ci al i zat i on

vent ur e was not wi t h St i ne onl y, as Bayer cont i nued t o ar gue,

but wi t h MS Tech ( of whi ch St i ne was i t s di r ect or ) . Thi s f act

shoul d have pr ompt ed an i nqui r y i nt o t he cont r act ual

r el at i onshi p vi s- à- vi s MS Tech. Had Bayer made such i nqui r y, i t

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woul d have l ear ned t hat t he commerci al i zat i on agr eement had t o

be wi t h MS Tech so t hat St i ne di d not i ncur l i abi l i t y t o

Monsant o. Cont r ary t o what Bayer t ol d J udge Andr ews, i t was

Bayer , not Dow, t hat had a “gr oss mi sunder st andi ng” of t he

Bayer - MS Tech- St i ne ar r angement .

Thr oughout t hi s l i t i gat i on, Bayer mar ched onwar d wi t h

a vi ew of i t s case t hat was not suppor t ed by i t s own

wi t nesses. To be cl ear , i f t hi s wer e a case i nvol vi ng a

col or abl e di sput e r egar di ng cont r act l anguage, t hi s woul d

not be an except i onal case. But t hi s case i s not such

case. Far f r om i t . The posi t i ons Bayer t ook t o suppor t

t hei r cont r act i nt er pr et at i on ar gument s wer e di r ect l y

cont r adi ct ed by t he r ecord evi dence Bayer had obt ai ned

t hrough ear l y di scover y and Bayer shoul d have made ever y

ef f or t t o di scover bef or e f i l i ng sui t . Bayer ’ s f i l i ng of

t he mot i on f or pr el i mi nar y i nj unct i on ear l y i n t hi s

l i t i gat i on was f r i vol ous and unnecessar i l y i ncr eased t he

cost s of l i t i gat i on. Fi r st , J udge Andr ews had al r eady

est abl i shed f i l i ng and di scover y deadl i nes. Second, and

more i mpor t ant l y, Bayer cl ai med no f ur t her di scover y was

necessar y t o deci de t he mot i on. Such posi t i on i s

di st ur bi ng because at t he ver y same t i me Bayer made t hi s

r epr esent at i on, t he par t i es wer e conduct i ng deposi t i ons.

As set f or t h above and i n t hi s Cour t ’ s pr i or Opi ni on, such

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deposi t i on t est i mony of Bayer ’ s own wi t nesses debunked

Bayer ’ s cl ai ms.

I t i s di st ur bi ng t o t hi s Cour t t hat Bayer accuses ( and

cont i nues t o accuse) Dow of “soi l ed hands and l i t i gat i on

mi sconduct , ” [ Docket No. 335, at 9] ( Bayer ’ s Opp. t o Dow’ s

Ref i l ed Mot i on f or Fees and Cost s”) when t her e i s no evi dence t o

suppor t such accusat i on. Bayer l abel s Dow’ s request f or f ees as

“[ l ] ong on r het or i c, but shor t on suppor t . ” I d. Bayer i s t he

cl assi c pot cal l i ng t he ket t l e bl ack. Bayer cl ai ms that i t

l i t i gat ed t hi s case i n good f ai t h wi t h conduct t hat was

r easonabl y j ust i f i ed i n l aw and f act . Yet , t he f act s si mpl y do

not bear t hi s out as set f or t h above i n t he Cour t ’ s pr i or

Opi ni on and t he Repor t and Recommendat i on.

Fi nal l y, Bayer seems t o suggest t hat because t he t r i bunal

i n Bayer I I I r ul ed t hat Dow br eached Bayer ’ s r i ght s t o t he pat

gene vi s- à- vi s i t s agr eement wi t h MS Tech f or t he cr eat i on of

t he E3 pr oduct – a f act Dow di sput es – t he subl i cense at i ssue

her e i nvol vi ng t he dmmg f ai l s by r es j udi cat a. Al t hough t he

t r i bunal ’ s f i ndi ng was subsequent t o t hi s Cour t ’ s Opi ni on, Bayer

argues t hat t he Cour t must consi der i t . Bayer seems t o be

sayi ng t hat because Dow has l ost as t o one of t he genes i n t he

E3 pr oduct , i t i pso f act o f ai l s as t o t he ot her t wo genes,

i ncl udi ng t he dmmg gene her e because i t i s al l one i nf r i ngi ng

pr oduct . Bayer ’ s appr oach t o t hi s case appears t o be: Dow has

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event ual l y l ost i t s abi l i t y t o sel l t he E3 pr oduct so why shoul d

i t get f ees her e? Rel at edl y, Bayer procl ai ms: “[ n] o f r aud was

commi t t ed; [ n] o mi sr epr esent at i on t o t he Cour t occur r ed, nor was

evi dence compr omi sed. ” [ Bayer ’ s Obj ect i ons, at 2, n. 3] . I t i s

evi dent t o t hi s Cour t t hat Bayer f ai l s t o appr eci at e t he har m

caused by i t s obj ect i vel y unr easonabl e l i t i gat i on conduct .

I n t he f i nal anal ysi s, t he Cour t f i nds Bayer ’ s conduct

t r oubl i ng. Faced wi t h no evi dence t o suppor t i t s t or t ur ed

i nt er pr et at i on of t he Agr eement , Bayer has engaged i n

acr i moni ous f al l acy and obf uscat i on, whi ch r esul t ed i n

unnecessary expendi t ur e of l egal f ees by Dow. Bayer wi l l now

have t o pay the pr i ce.

2. Obj ect i ons t o Amount of Awar d

Bayer addi t i onal l y obj ect s t o any award of f ees because

Dow’ s bi l l i ng r ecor ds ar e so “heavi l y r edact ed” t hat i t has been

deni ed “due pr ocess” i n opposi ng t he f ee r equest . Bayer argued

bef or e J udge Schnei der t hat t he recor ds wer e so heavi l y

r edact ed, t hat t hey cont ai ned onl y vague ref er ences t o

act i vi t i es, such as, “pr epar e” or “r esear ch”, wi t hout any

meani ngf ul cont ext . [ Docket No. 335, at 37] .

The bi l l i ng r ecor ds r un f r om August 2011 t o J une 2013.

J udge Schnei der deduct ed $95, 702. 49 f r om t he t ot al awar d because

such f ees were expended i n connect i on wi t h Bayer I . Bayer does

not appear t o cont est t hi s deduct i on. J udge Schnei der r evi ewed

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t he unr edact ed document at i on f i ndi ng such document at i on was

adequat e. Bayer , however , cont ends that i t shoul d be per mi t t ed

t o obj ect t o t he r easonabl eness of t he amount of t he f ees

i ncl udi ng t he nat ur e and ext ent of t he wor k done by Dow’ s

counsel , but t hat i t cannot do so wi t h t he r ecor ds bei ng so

heavi l y r edact ed. As an exampl e, Bayer ci t es to t hi s Cour t

( Bayer ci t ed no exampl e t o J udge Schnei der ) a Febr uary 8, 2013,

exampl e where t hr ee t i mekeepers l ogged subst ant i al l y t he same

amount of t i me f or what appear s t o be t he same t ask. Bayer Obj .

at 8.

As a gener al pr i nci pl e, Bayer i s ent i t l ed t o appr ai se t he

r easonabl eness of t he amount of f ees r equest ed by Dow i ncl udi ng

t he nat ure and ext ent of t he wor k done by Dow’ s counsel on

var i ous phases of t he case, so that i t may pr esent t o t he cour t

any l egi t i mat e chal l enges t o Dow’ s cl ai m. See I deal El ect r oni c

Secur i t y Co. , I nc. v. I nt er nat i onal Fi del i t y I nsur ance Co. , 129

F. 3d 143, 151 ( D. C. Ci r . 1997) ( “I deal i s ent i t l ed t o di scover

t he i nf or mat i on i t r equi r es t o appr ai se t he r easonabl eness of

t he amount of f ees r equest ed by I FI C, i ncl udi ng t he nat ur e and

extent of t he wor k done . . . so that i t may pr esent t o t he

cour t any l egi t i mat e chal l enges t o I FI C’ s cl ai m. ”) . See al so

Nat i onwi de Payment Sol ut i ons, LLC v. Pl unket t , 831 F. Supp. 2d

337, 338- 39 ( D. Me. 2011) ( “t he extent t hat a f ee- i nvoi ce

cl ai mant wi shes a cour t t o r evi ew an unr edact ed ver si on of i t s

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at t or neys’ bi l l i ng i nvoi ces f or t he pur pose of j udgi ng t he

r easonabl eness of i t s f ee r equest , i t must , as a mat t er of

f undament al f ai r ness, per mi t i t s opponent t o r evi ew t he

unr edact ed ver si on and be hear d as t o t he r easonabl eness of t he

f ee r equest wi t h t he benef i t of t hat f ul l and unf et t er ed

r evi ew”) ; Wasni ewski v. Gr zel ak- J ohannsen, 549 F. Supp. 2d 965,

975 ( N. D. Ohi o 2008) ( “The al t er nat i ve of in camera r evi ew of an

unr edact ed [ at t or ney bi l l i ng] st at ement i s . . . unat t r act i ve

because i t i nt er j ect s an el ement of ex parte r evi ew i n t hi s

mat t er and depr i ves r espondent of an oppor t uni t y t o rai se

ar gument s”) ; Essex Bui l der s Gr p. , I nc. v. Amer i sur e I ns. Co. ,

No. 6: 04- cv- 1838- Or l - 22J GG, 2007 U. S. Di st . LEXI S 14458, 2007 WL

700851, at *2 ( M. D. Fl a. Mar . 1, 2007) ( denyi ng f ee cl ai mant ’ s

mot i on t o f i l e document s under seal f or in camera r evi ew;

st at i ng, “The Cour t f i nds t hat i t woul d be mani f est l y unf ai r t o

Amer i sure t o r equi r e i t t o def end agai nst t he si zeabl e f ee awar d

cl ai med by Essex wi t hout t he benef i t of t he f ul l r ecor d upon

whi ch t he f ees ar e based. ”)

Whi l e thi s Cour t f i nds t hat Bayer coul d have done more

bef or e J udge Schnei der i n t er ms of ar t i cul at i ng why i t coul d not

assess t he r easonabl eness of Dow’ s f ees, t he Cour t wi l l hol d

f ur t her or al ar gument on and r eser ve deci si on on t hi s obj ect i on.

( Al t er nat i vel y, Dow may wi sh t o t ur n over r evi sed r edact ed

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bi l l i ng st at ement s i n t he i nt er i m, whi ch may obvi at e t he need

f or or al ar gument ) .

Fi nal l y, Bayer obj ect s t o t he awar d on t he gr ounds t hat t he

Repor t and Recommendat i on f ai l ed t o conduct an i ndependent

anal ysi s as to t he r easonabl eness of t he hour l y r at es. Bayer ,

however , never chal l enged t he appr opr i at eness and r easonabl eness

of t he r at es f or Dow’ s counsel bef or e J udge Schnei der . Thi s

Cour t wi l l not per mi t Bayer t o r ai se i t her e. Bayer ’ s ar gument

t hat i t s f ai l ur e t o chal l enge t he r at es i s connect ed t o t he

r edact ed bi l l i ng st at ement s i s di si ngenuous. One has not hi ng t o

do wi t h t he other . 12

I I I . Concl usi on

For t he r easons set f or t h above, t he Cour t adopt s t he

Repor t and Recommendat i on grant i ng Dow’ s Mot i on f or Fees and

12 Even put t i ng Bayer ’ s f ai l ur e t o chal l enge Dow’ s r at es, t hi s

Cour t f i nds t he f ees ar e r easonabl e. Dow negot i at ed a bi l l i ngar r angement whereby counsel f or Dow char ges l ess t han i t sst andar d hour l y rat es charged t o ot her cl i ent s f or wor k done byat t or neys, par al egal s, and ot her t i mekeeper s; l i mi t s t i mekeeper st o t hose wi t h val uabl e and r el evant exper i ence; and pr ovi desaddi t i onal di scount s. The aver age par t ner bi l l i ng r at es f or t heper i ods J ul y 2012- December 2012 and J anuary 2013- Apr i l 2014 f el lbet ween $743. 50- $778. 75. See D. I . 323 ( Bi cks Decl . ) at Tabl e 7.Del awar e cour t s have appr oved rat es between $650 and $700,put t i ng counsel ’ s r at es wi t hi n r oughl y 10% of t he r at es appr ovedf or Del awar e at t or neys wi t h si mi l ar exper i ence. See, e. g. ,Gl ass Co. v. Guardi an I ndus. Corp. , No. CI V. 09- 515- SLR, 2013 WL936451, at *3 (D. Del . Mar . 11, 2013) ( $690 r at es f or out si depat ent counsel ) ; I n r e ALHHol di ngs LLC, No. CI V. 04- 1339- SLR,2010 WL 520632, at *3- 4 ( D. Del . Feb. 12, 2010) ( $675 r at esr easonabl e) ; Segen v. Opt i onsXpr ess Hol di ngs, I nc. , 631F. Supp. 2d 465, 476 ( D. Del . 2009) ( r at es of $700 and $650r easonabl e) .

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Cost s as Pr evai l i ng Par t y. The Cour t r eserves on t he amount of

t he awar d.

s/ Renée Mar i e BumbRENÉE MARI E BUMBUni t ed St at es Di st r i ct J udge

Dat ed: Mar ch 13, 2015

bayer cropscience ag v. dow agrosciences, llc, c.a. no. 12-256 (rmb/js) (d. del. mar. 13, 2015)

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