Monsanto Co. v. Trantham (In Re Trantham)

304 B.R. 298, 51 Collier Bankr. Cas. 2d 961, 2004 Bankr. LEXIS 62, 2004 WL 178977
CourtBankruptcy Appellate Panel of the Sixth Circuit
DecidedJanuary 30, 2004
Docket03-8010
StatusPublished
Cited by91 cases

This text of 304 B.R. 298 (Monsanto Co. v. Trantham (In Re Trantham)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Monsanto Co. v. Trantham (In Re Trantham), 304 B.R. 298, 51 Collier Bankr. Cas. 2d 961, 2004 Bankr. LEXIS 62, 2004 WL 178977 (bap6 2004).

Opinion

OPINION

AUG, Bankruptcy Judge.

Monsanto Company (Monsanto) appeals the bankruptcy court’s memorandum and order denying its motion for summary judgment on its complaint for nondis-chargeability of Monsanto’s claim against the Debtor, William Farris Trantham (Trantham). The bankruptcy court determined that the pre-petition patent infringement judgment obtained by Monsan *301 to against Trantham in the amount of $592,677.89 is dischargeable.

I. ISSUES ON APPEAL

1. Whether the bankruptcy court applied the wrong standard for a finding of “willful and malicious injury” under 11 U.S.C. § 523(a)(6).

2. Whether the debt for willful patent infringement is dischargeable.

II. JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Western District of Tennessee has authorized appeals to the BAP. A “final order” of a bankruptcy court may be appealed by right under 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citations omitted). The bankruptcy court’s order denying Monsanto’s motion for summary judgment and finding, based on the collateral estoppel effect of the district court’s decisions, that Trantham’s debt to Monsanto was dischargeable is a final order.

Orders denying motions for summary judgment are reviewed for abuse of discretion. Romstadt v. Allstate Ins. Co., 59 F.3d 608 (6th Cir.1995). “ ‘An abuse of discretion occurs only when the [bankruptcy] court relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard.’ ” Sicherman v. Diamoncut, Inc. (In re Sol Bergman Estate Jewelers, Inc.), 225 B.R. 896, 899 (6th Cir. BAP 1998) (alteration in original) (quoting Mapother & Mapother, P.S.C. v. Cooper (In re Downs), 103 F.3d 472, 480-81 (6th Cir.1996)).

The application of collateral estoppel is reviewed de novo. See Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 461 (6th Cir.1999). “De novo review requires the Panel to review questions of law independent of the bankruptcy court’s determination.” First Union Mortgage Corp. v. Eubanks (In re Eubanks), 219 B.R. 468, 469 (6th Cir. BAP 1998) (citation omitted). “When reviewing a summary judgment decision, an appellate court must confine its review to the evidence as submitted to the district court.” Markowitz, 190 F.3d at 463.

III.FACTS

Before delving into Monsanto’s issues on appeal, it is necessary to review the facts giving rise to the patent infringement judgment which Monsanto asserts is non-dischargeable. In its decision finding that Trantham had infringed Monsanto’s patents, the U.S. District Court for the Western District of Tennessee gives a succinct version of these background facts. The court states:

This case stems from [Monsanto’s] patents on technology that allows a seed producer of cottonseed and soybean seeds to insert genes into the seed to make the resulting plants resistant to glysophate herbicides, such as Roundup herbicide, a product manufactured by [Monsanto]. Seeds with the patented technology are called Roundup Ready®. A grower using the Roundup Ready® seed can spray his crops with the Roundup herbicide, or another glysop-hate herbicide, thereby killing the weeds in his field without damaging his crops. The technology can also be injected into cottonseed to make the resulting cotton plants insect repellant. Cottonseed us *302 ing the technology is called Bollgard® Cotton. Cottonseed containing both versions of the technology is called Boll-gard® with Roundup Ready® Cotton. [Monsanto’s] Roundup Ready® and Bollgard® gene technology is protected by three patents, which were issued pri- or to the events giving rise to this controversy. [Monsanto] sells the gene technology to seed producers under a license to use the technology in the production of cottonseed and soybeans. The seed producérs then sell the seed treated with the technology to retailers or to growers, both of whom must obtain licenses from [Monsanto] before selling or using the seeds with the Roundup Ready® or Bollgard® technology....
In order for an individual farmer to use seed produced with the patented gene technology, the farmer must be licensed to use the product. Under the licensing arrangement, a grower is only allowed to use the technology in one growing season and is prohibited from saving for later planting any of the seed produced from plants grown using the purchased seed. The grower is also prohibited from selling saved seed or transferring the seed to anyone else for planting.
[Trantham] is a farmer in Tipton County, Tennessee. [Trantham] has never obtained a license from [Monsanto] to use its technology in cottonseed. In 1999, [Trantham] purchased, along with James Wood, approximately 900 bushels of cottonseed from the Burlison Gin, located near Covington, Tennessee. [Trantham] then used that seed to plant over 100 acres of land with cotton seed. [Trantham] applied Roundup herbicide over the cotton, some of which was killed. In 2000, [Trantham] used seed purchased from the Burlison Gin to plant his cotton crops and again applied Roundup herbicide to the crop.
[Trantham] also purchased soybeans in 1999 from a retailer named Terra Seed and Chemical Company. [Trant-ham] planted and harvested the soybeans in 1999, and then planted his 2000 crop with soybeans saved from the previous year’s harvest.
[Monsanto] was granted leave by this Court to enter [Trantham’s] land to collect samples of the cotton and soybean crops to be tested for the presence of the Roundup Ready® and Bollgard® gene technology. [Monsanto] used three separate testing procedures on the cotton and soybean crops, and detected [Monstanto’s] patented gene technology in 93% of the cotton samples and 100% of the soybean samples.

Monsanto Co. v. Trantham, 156 F.Supp.2d 855, 858-59 (W.D.Tenn.2001). Subsequent to the district court’s summary judgment that Trantham had in fact infringed Monsanto’s patent, a separate jury trial was held to determine Monsanto’s damages. The jury found by clear and convincing evidence that Trantham had willfully infringed Monsanto’s patents and awarded damages of $84,392.

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304 B.R. 298, 51 Collier Bankr. Cas. 2d 961, 2004 Bankr. LEXIS 62, 2004 WL 178977, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monsanto-co-v-trantham-in-re-trantham-bap6-2004.