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Determination of Reasonable Royalty Should Consider Benefits to Patentee and Infringer

Client Alert | 1 min read | 06.01.07

A Federal Circuit panel, in Monsanto Company v. Homan McFarling (No. 05-1570, -1598; May 24, 2007), affirms a district court's patent infringement damage award. In so doing, the Court holds that the jury properly considered the benefits that plaintiff Monsanto’s established licensing program conferred on both Monsanto and its licensees in order to establish a reasonable royalty.

Monsanto’s patents cover a system for weed control that employs genetically modified crops resistant to glyphosate herbicides. Monsanto distributes patented seeds by authorizing various companies to produce the seeds and sell them to farmers. McFarling purchased patented seed and signed a “Technology Agreement” which prohibited McFarling from planting seeds produced from the purchased seed. McFarling paid a $6.50 license fee to Monsanto per 50-pound bag of seed. McFarling also paid an authorized seed company between $19 and $22 per bag of seed. McFarling subsequently violated the Technology Agreement by planting seed produced by the patented seed. Monsanto sued for breach of contract and patent infringement.   At trial, the jury awarded Monsanto a reasonable royalty rate of $40 per bag of seed.  McFarling appealed the royalty rate and argued that Monsanto had established a royalty rate of $6.50 per bag through its established licensing program. 

The Federal Circuit panel agrees with McFarling’s position that “an established royalty is usually the best measure of a “reasonable royalty” for a given use of an invention because it removes the need to guess at the terms to which parties would hypothetically agree.” In affirming the jury’s award, however, the Federal Circuit holds that “it was proper for the jury to consider not only the benefits of the licensing program to Monsanto, but also the benefits that Monsanto’s technology conferred on farmers such as Mr. McFarling.”   The court finds that the benefits of increased yield and the reduced cost of weed control confer a savings of $31 to $61 per bag of seed to McFarling and then concludes that the jury’s award of $40 per bag was reasonable.

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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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