Monsanto, DuPont settle lawsuits, set new $1.75 billion deal

A view of the Dupont logo on a sign at the Dupont Chestnut Run Plaza facility near Wilmington, Delaware, April 17, 2012.

Credit: Reuters/Tim Shaffer

By Carey Gillam

Tue Mar 26, 2013 12:13pm EDT

(Reuters) – Monsanto Co and DuPont have settled a bitter legal battle over rights to technology for genetically modified seeds and will drop antitrust and patent claims against each other while forging a new collaboration, the companies said on Tuesday.

The deal tosses out a $ 1 billion jury verdict DuPont was ordered to pay Monsanto last August. Instead, the companies agreed that DuPont would make at least $ 1.75 billion in royalty payments over several years in exchange for broad access to develop products using Monsanto’s leading genetic technology.

Monsanto shares rose nearly 4 percent on the news, while DuPont shares fell nearly 1 percent.

Still, DuPont officials said the agreement was a win for shareholders and sets up its Pioneer agricultural seed unit for future growth.

“This is a smart deal for DuPont,” Paul Schickler, president of DuPont Pioneer, said in an interview. “We’ve got access to two additional technologies that we can now combine with our existing technologies as well as the technologies that are in our pipeline.”

DuPont Pioneer will have broad rights to key new technology that include stacking of traits, Schickler said.

Monsanto, which generates revenues both through seed sales and licensing of its genetic seed technology to other companies, said the deal should bring in far more than the minimum $ 1.75 billion as DuPont pushes the company’s technology through its broad customer base.

“They were and are the largest soybean company in the world, the United States for sure,” said Scott Partridge, vice president/strategy for Monsanto. “We are pleased to have them again as a customer for our newest technology. It is another avenue to put the highest-performing product in the hands of farmers.”

Under the agreement, which Schickler said came together over the last week, DuPont is to make four annual fixed royalty payments totaling $ 802 million to Monsanto from 2014 to 2017.

Beginning in 2018, DuPont will also pay royalties on a per-unit basis for Genuity Roundup Ready 2 Yield soybean technology and Genuity Roundup Ready 2 Xtend for the life of the agreement in exchange for continued technology access. Annual minimum payments through 2023 will total $ 950 million.

DuPont can start testing Monsanto’s material in the field this year and will be able to sell Roundup Ready 2 Yield in 2014. And if regulatory approvals are in place, DuPont will be able to start selling the Xtend product in 2015, according to Schickler.

Pioneer will integrate the technology into its own seed germplasm over time, he said.

Access to Xtend is key as it is seen as part of a next wave of herbicide-resistant crop technology aimed at dealing with a wave of herbicide-resistant weeds spreading across U.S. farmland.

The deal also calls for Monsanto to receive access to certain DuPont Pioneer disease resistance and corn defoliation patents.

The settlement comes after a jury in the U.S. District Court in St. Louis awarded Monsanto $ 1 billion in August, agreeing with the company that DuPont and Pioneer violated a licensing agreement for use of the Roundup Ready trait by trying to stack several traits together.

DuPont was pursuing a separate case against Monsanto, alleging anti-competitive behavior, and a hearing in that matter was set for this fall. But under the settlement, each side is dropping its claims against the other.

Both DuPont and Monsanto hold strong positions in the U.S. seed industry. They and other competitors have been racing to develop improved crops through genetic modifications and other means.

Pioneer, which generated sales of $ 7.3 billion in 2012, has been gaining market share in North American soybean and corn markets, and its brands have been popular with farmers.

Monsanto, which had $ 13.5 billion in sales last year, is seen as the market leader in developing genetically altered crop technology and is the world’s largest seed company.

Monsanto introduced its Roundup Ready soybean technology in 1996. Roundup Ready crops can tolerate sprayings of Roundup, or glyphosate-based, herbicide. And the technology has become a foundation for many key crops, including corn, alfalfa, cotton, canola and sugar beets.

Shares of DuPont were down 0.9 percent at $ 48.63 in midday trading, while Monsanto rose 3.7 percent to $ 103.08.

(Reporting by Carey Gillam; Editing by Gerald E. McCormick and Lisa Von Ahn)

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Reuters: Business News

Monsanto, DuPont settle lawsuits, set new $1.75 billion deal

Apple to settle over kids" iTunes charges

A couple of years ago, Brent Goldberg’s two young sons downloaded “Dolphin Play,” a free game onto their iPod Touch. In the game, you raise dolphins and other fish in a tank. There are also spending opportunities. You would get coins and exchange them for virtual fish. In the case of Goldberg’s seven-year-old son, $ 50 worth of virtual fish.

“I found out two hours later when the credit card company called and said I had some weird charges coming through,” he says. “I’m like, ‘Oh, where’s it from?’ They’re like, ‘Oh, it’s from Apple.’ I’m like, ‘Boys, what are you doing?’”

That cry has echoed through homes across the country — roughly 23 million homes. That’s how many families Apple will compensate under the terms of a proposed legal settlement. Two years ago, peeved moms and dads filed a class-action lawsuit, alleging that Apple didn’t have proper parental controls on free mobile-device games. That allowed children to rack up big iTunes charges on so-called “in-app purchases.” Depending on the game, these purchases could give players a bigger sword, better house or bonus points.

Parents like Mike Bertrand got stuck with stuck paying for his children’s iTunes spree.

“The kids were very surprised to learn that they were spending real money and really confused about it,” he says.

Bertrand’s three young kids started playing a free iPad game called “Tap Fish.”

“It’s a little virtual aquarium, but if you want to buy different tanks or you want to buy little castles or little fish for your virtual fish tank or different species of fish, you have to use what appears to be play money,” he says.

It’s not play money. Bertrand realized what was going on when he noticed an email receipt from the iTunes store for $ 150.

“I started going through some other ones that were trapped in my spam folder and found that over the course of about a week, my kids tallied about $ 1,500 on the game,” he says.

Apple reimbursed both Betrand and Goldberg. The two fathers didn’t join the class-action suit. In agreeing to settle that case, Apple will give many parents a $ 5 iTunes gift card. Those parents whose kids’ fishy charges topped $ 30 will get cash refunds. The settlement adds up to at least $ 100 million.

The question is whether the supposedly free games represent a deceptive business practice, says Colby Zintl with the advocacy group Common Sense Media. She applauds the settlement and points out Apple has added some barriers to stop unauthorized iTunes purchases. There’s now a setting on iPhones, iPads and other devices that requires a password before any real money can be spent in a game or app. Still, Zintl takes issue with some free games aimed at children.

“The ability to press a button and move to a next level and you’re charging your parents’s credit card, you have to question what the business practices are,” she says.

Those business practices grew out of the app marketplace, says Rene Ritchie of tech news site iMore.

“When the app store originally launched in 2008, there were apps like ‘Super Monkey Ball’ and they were $ 10,” he says. adding that no one wanted to pay that much.

“And this model emerged called freemium,” Ritchie says.

“Freemium” means the game itself is free, but things inside the game costs money.

“Instead of having to earn something in a game, you just buy it,” Ritchie says.

Betting on impatience paid off. Ritchie says all of the top-grossing games right now are free…ish.

Mike Bertrand has found a way to keep his children’s games genuinely free.  “My kids don’t know my iTunes password anymore,” he laughs.

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Apple to settle over kids" iTunes charges