Monsanto Company and the Regents of the University of California announced today that they have signed an agreement which mutually resolves issues between them regarding possible infringement and validity of patent rights relating to the production of bovine somatotropin.

Under the agreement, Monsanto will pay the university $100 million in upfront royalties and a minimum of $5 million a year for the commercial rights to continue to sell its POSILAC brand of bovine somatotropin. This resolves the patent infringement lawsuit against the company that was scheduled to begin today.

POSILAC is used to enhance milk production and serves as an important tool to help dairy producers improve the efficiency of their operations, Monsanto said in its release about the agreement.

"We're pleased that we've come to an agreement that will allow our dairy producer-customers to continue to use POSILAC bovine somatotropin," said Carl Casale, Monsanto executive vice president for North America Commercial Operations.

"We will continue to focus on optimizing our dairy business, and to create and bring new products to our customers," Casale said.

Under the agreement:

  • Monsanto is granted an exclusive commercial license under the University's patent estate, including access under a patent which expires in 2023, for the manufacture of bovine somatotropin. Monsanto's license is subject to certain rights maintained by the U.S. government because the University's work was performed with federal funding. The University also retains certain non-commercial rights to practice the invention for research and educational purposes.

  • University of California and Monsanto will dismiss all claims under the patent infringement lawsuit which was scheduled for trial beginning Feb. 27, 2006. The University received U.S. Patent No. 6,692,941 and filed the lawsuit against Monsanto in February 2004.

  • Monsanto will pay the University a $100 million upfront royalty and an ongoing royalty of 15 cents per dose of POSILAC sold to dairy producers with a minimum annual royalty of $5 million through the 2023 expiration of the University's patent estate.

  • Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality.

    SOURCE: Monsanto Company via PR Newswire.