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Monsanto v Schmeiser 2001 (1/2)

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Date: 2001 03 29

Docket: T-1593-98

Neutral Citation: 2001 FCT 256

BETWEEN:

MONSANTO CANADA INC. and MONSANTO COMPANY

Plaintiffs

and

PERCY SCHMEISER and SCHMEISER ENTERPRISES LTD.

Defendants

REASONS FOR JUDGMENT

MacKAY J.

[1] This is an action heard in Saskatoon, against the defendants, pursuant to the Patent Act, R.S.C. 1985, c. P-4 (the 'Act'), for alleged infringement of the plaintiffs' Canadian Letters Patent No. 1,313,830. The infringement alleged is by the defendants using, reproducing and creating genes, cells and canola seeds and plants containing genes and cells claimed in the. plaintiffs' patent, and by selling the canola seed they harvested, all without the consent or licence of the plaintiffs. The commercial product resulting from the plaintiffs' development, from its patent and licensing agreements, is known as 'Roundup Ready Canola', a canola seed that is tolerant of glyphosate herbicides including the plaintiffs' 'Roundup'.

[2] On consideration of the evidence adduced, and the submissions, oral and written, on behalf of the parties I conclude that the plaintiffs' action is allowed and some of the remedies they seek should be granted. These reasons set out the bases for my conclusions, in particular my finding that, on the balance of probabilities, the defendants infringed a number of the claims under the plaintiffs' Canadian patent number 1,313,830 by planting, in 1998, without leave or licence by the plaintiffs, canola fields with seed saved from the 1997 crop which seed was known, or ought to have been known by the defendants to be Roundup tolerant and when tested was found to contain the gene and cells claimed under the plaintiffs patent. By selling the seed harvested in 1998 the defendants further infringed the plaintiffs' patent.

[3] The Reasons are lengthy. For reference the paragraphs here numbered indicate the principal topics, as follows.

Paragraph Topic

[4] Introduction

[15] The plaintiffs' patent and its licensing

[29] Mr. Schmeiser's farming practice

[36] Testing of Mr. Schmeiser's canola.

[60] The issues

[62] Admissibility of evidence of tests conducted on samples

[77] The validity of the plaintiffs' patent

[91] Loss or waiver of the plaintiffs' patent rights

[101] Infringement of the patent

[128] Remedies for infringement

[146] Conclusions

Introduction

[4] The plaintiff Monsanto Canada Inc. ('Monsanto Canada') is incorporated under the laws of Canada, and has its principal place of business in Mississauga, Ontario. The plaintiff Monsanto Company ('Monsanto US') is incorporated under the laws of the state of Delaware, U.S.A., and has its principal place of business in St. Louis, Missouri, U.S.A. Reference to both corporations in these reasons is made by the terms 'Monsanto' or 'the plaintiffs.'

[5] On February 23, 1993, Monsanto US was issued Canadian Letters Patent No. 1,313,830 ('the ‘830 patent') for an invention termed 'Glyphosate-Resistant Plants.' The ‘830 patent grants Monsanto US the exclusive right, privilege and liberty of making, constructing, using and selling the invention for the full term of the patent. The patent term ends on February 23, 2010. Monsanto Canada is a licensee under the ‘830 patent.

[6] The defendant, Percy Schmeiser ('Mr. Schmeiser'), is an individual who resides near Bruno, Saskatchewan, and who has farmed in that region for more than 50 years. The defendant, Schmeiser Enterprises Ltd., is a corporation organized under the laws of Saskatchewan. It has existed since 1960 in relation to a number of other businesses operated by Mr. Schmeiser, and it was assigned control of his farming business in 1996. The only shareholders and directors of the corporation are Mr. Schmeiser and his wife. Reference to both defendants in these reasons is made by the terms 'Schmeiser' or 'the defendants.'

[7] Mr. Schmeiser has been farming near Bruno in the Rural Municipality of Bayne, Saskatchewan, for approximately 50 years. He has grown canola since the 1950's. There, in 1998, the year giving rise to the plaintiffs' claim, his corporation farmed nine fields, in which 1030 acres were devoted exclusively to growing canola. In addition to his farming, Mr. Schmeiser has an extensive history in municipal and provincial politics, and as a businessman and an adventurer.

[8] The plaintiffs' claim alleges that in 1998 the defendants planted glyphosate-resistant seeds to grow a crop of canola, for harvest, having a gene or cell that is the subject of the plaintiffs' patent. By so doing the defendants are said to use, reproduce and create genes, cells, plants and seeds containing the genes and cells claimed in the plaintiffs' patent. The parties agree that the defendants did not at any time sign a Technology Use Agreement ('TUA'), the plaintiffs' form of license for growers of the seed containing the patented gene.

[9] This action, initiated on August 6, 1998, by amended Statement of Claim, dated August 27, 1999, seeks the following relief:

(a) An injunction restraining the d efendants includ ing all agents, emp loyees, servants, persons under the control of or acting in concert with the defendants from:

(i) using, growing, cultivating or harvesting any and all quantities of seeds and crop grown from said seeds containing genes or cells in accordance with any of claims 1, 2, 5, 6, 7, 22, 23, 26, 27, 28 and 45 of Canadian Letters Patent No. 1,313,830.

...

(iii) offering for sale, selling, marketing, advertising, distributing or o therwise in Canada by any means any and all quantities of seed and crop grown from said seed containin g genes or cells in acc ordance with any of claims 1, 2, 5, 6, 7, 22, 23, 26, 27, 28 and 45 of Canadian Letters Patent No. 1,313,830.

(b) Delivery up by the defendants of any and all of the seeds or crop in the possession, care, custody or control of the defen dants or fo r which the defen dants hav e title to, in Canada, containing said patented genes or cells or produced according to said patented method or which in any way offend against such Orders as may be made herein;

(c) General damages exclusive of interest and costs; or an accounting of profits of the defendants, whichever the plaintiffs may elect after discover y in a refere nce as to b oth or either as th e plaintiffs m ay elect;

(d) Punitive and ex emplary damages;

(e) Pre and post judgment interest on all monetary awards at a rate of at least 1% more than the prime ban king lending rates;

(f) The plaintiffs' costs of this action o n a solicitor and client basis;

[10] The claim for damages or an accounting of profits was modified at trial with counsel for the plaintiffs then asking, on behalf of Monsanto Canada, for damages of $15 per acre of land seeded for canola in 1998 (1,030 acres), yielding $15,450.00 in general damages, the equivalent of a license fee for growing the plaintiffs' seed containing the patented gene. In addition, on behalf of Monsanto US, as the patent owner, an accounting of profits is elected, in the amount of $105,000.00. If this Court does not find that the individual plaintiffs are entitled to elect different heads of damage, the plaintiffs jointly claim for profits in the amount of $105,000.00. At trial, counsel for the plaintiffs also requested the amount of $25,000.00 for punitive and exemplary damages, claimed in the amended Statement of Claim, to deter others from actions similar to those of the defendants.

[11] The defendants do not deny the presence of Roundup Ready canola in their fields in 1998, but they urged at trial that neither Mr. Schmeiser nor Schmeiser Enterprises Ltd. have ever deliberately planted, or caused to be planted, any seeds licensed by the plaintiffs containing the patented gene. The defendants further asserted that substantial damage and loss has been suffered by them because of the herbicide-resistant plants. It is said for them that it is not possible to control the growth of the Roundup Ready canola with normal herbicides, it interferes with crop selection, making it difficult to plant anything other than canola, and it requires the adoption of new farming practices. I note that despite this claim no counterclaim by the defendants is before the Court. They do urge that, even if the plaintiffs' patented gene is present in the canola grown by the defendants, that gene must be used, in the sense that the crop must be sprayed with the herbicide Roundup, before any infringement of the patent can be found.

[12] The defendants urged at trial that by the unconfined release of the gene into the environment the plaintiffs have not controlled its spread, and did not intend to do so, and they have thus lost or waived their right to exercise an exclusive patent over the gene.

[13] The defendants further asserted at trial that Canadian Patent No. 1,313,830 is, and always has been, invalid and void because:

(a) the alleged invention is a life form intended for human consumption and is not the proper subject matter for a patent; it is self-propagating and can spread without human intervention;

(b) the patent was obtained for an illicit purpose of creating a noxious plant that would spread by natural means to the lands of innocent parties so as to entrap them with nuisance patent infringement claims. I note that no evidence was adduced and no argument was directed at trial to the alleged illicit purpose;

(c) if infringement is found the plaintiffs would in effect obtain a patent for a plant, which it is urged is not possible in Canada in light of the Plant Breeders' Rights Act which provides for protection of new varieties of plants.

[14] At trial, the defendants submitted that Mr. Schmeiser is entitled to the protection of the corporate defendant, and if infringement be found, liability should be limited to the company and not extended to him personally. The defendants also maintain that exemplary and punitive damages are not warranted and would be excessive in a situation such as this where the defendants are already facing financial ruin should this Court find against them. Finally, they oppose the award of separate relief to each of the plaintiffs here claimed, i.e. they oppose general damages for Monsanto Canada and an accounting of profits for Monsanto US.

The plaintiffs' patent and its licensing

[15] The patent in issue, entitled 'Glyphosate-Resistant Plants', concerns man-made genetically-engineered genes, and cells containing those genes which, when inserted in plants, in this case canola, make those plants resistant to glyphosate herbicides such as Monsanto's product sold under the trade-mark Roundup. Glyphosate herbicides inhibit the enzyme known as EPSPS, required to produce a particular amino acid essential for the growth and survival of a very broad range of plants. The herbicide so inhibits the enzyme EPSPS that most plants sprayed with Roundup or other glyphosates do not survive.

[16] By laboratory developments scientists of Monsanto US created a genetic insert, known as RT73, which, when introduced into the DNA of canola cells by a transformation vector, produces a variety of canola with a high level of tolerance to glyphosate. Once the modified gene is inserted in the DNA of the plant cells, the plant, its stem, leaves, seeds, etc., contain the modified gene. The plant's progeny, growing from seed with the patented gene and cells, will largely be comprised of cells with the modified gene. Thus the offspring or seeds of Roundup Ready canola, which is mainly self-germinating, contain the modified gene so that they too are glyphosate-tolerant..

[17] Glyphosate herbicides such as Roundup have been widely used in Canada for many years. Canola tolerant to glyphosate first became available commercially in Canada in 1996. It has been marketed under licensing arrangements through Monsanto Canada under Monsanto's trade-mark Roundup Ready Canola. In 1996 approximately 600 farmers in Canada planted Roundup Ready canola, on some 50,000 acres. By 2000, approximately 4.5 to 5 million acres of Roundup Ready canola were planted in Canada, by about 20,000 farmers, producing nearly 40% of canola grown in Canada.

[18] Canola growing in western Canada is a great Canadian success story. Rape seed was grown on a relatively small scale for many years. Now with the development, largely by Canadian scientists, of high yield seed, now called canola, crops for oil for human consumption and meal for animal feed, provide the greatest annual value of all grain crops in Canada.

[19] The advantage of Roundup Ready canola is that it is tolerant to the glyphosate herbicide Roundup which can be sprayed after the desired crop has emerged, killing other plants. This procedure is said to avoid any need to delay seeding for early weed spraying, to avoid the use of other special types of herbicides, and to eliminate the need for extensive tillage of the land, thus preserving moisture in the ground.

[20] Monsanto's ‘830 patent includes in its disclosure a statement of the objective, and a summary, of the invention. These provide in part:

The object of th is invention is to provide a method of gen etically transforming plant cells which causes the cells and plants regenerated therefrom to becom e resistant to glyphosa te and the herbicida l salts thereof.. . .

This invention involves a cloning or expression vector comprising a gene w hich enc odes 5-e nolpyru vylshikim ate-3-ph ospate synthase (EPSPS) polypeptide which, when expressed in a plant cell contains a chloroplast transit peptide which allows the polypeptide, or an enzymatically active portion thereof, to be transported from the cyto plasm of the plant cell into a chloroplast in the plant cell, and confers a substantial degree of glypho sate resistance upon th e plant cell and plan ts regenerated therefrom.

[21] The claims of the invention which in this action are said to be infringed include the following:

1. A chimeric p lant gene wh ich comprises:

(a) a promoter sequence w hich functions in p lant cells;

(b) a coding sequence which causes the production of RNA, encoding a chloroplast transit peptide/5-enolpyruvylshikimate-3 -phosphate synthase (EPSPS) fusion polypeptide, which chloroplast transit peptide permits the fusion polypeptide to be imported into a chloroplast of a plant cell; and

(c) a 3' non-translated region which encodes a polyadenylation signal wh ich functio ns in plant c ells to cause the addition to polyadenylate nucleotides to the 3' end of the RNA;

the promoter being heterologous with respect to the coding sequence and adapted to cause su fficient exp ression of the fusion po lypeptide to enhance the glyphosate resistance of a plant cell transformed with the gene.

2. A chim eric gene of Claim 1 in which th e prom oter sequ ence is a plant virus promoter sequence....

5. A chimeric gene of Claim 1 in which the coding sequence encodes a mutant 5-enolpyruvylsh ikimate-3 -phosphate synthase (EPSPS)

6. A chimeric gene of Claim 1 in which the EPSPS coding sequence encodes an EPSPS from an organism selected from the group consisting of bacteria, fun gi and plants.

7. A chimeric gene of Claim 1 in whic h the chlo roplast tran sit peptide is from a plant EPSPS gene....

22. A glyphosate-resistant plant cell comprising a chimeric plant gene of Claim 1.

23. A glyphosate-resistant plant cell of Claim 22 in which the promoter sequence is a plant virus promoter sequence....

26. A glyphosate-resistant plant cell of Claim 22 in which the coding sequence encodes a mutant 5-enolpyruvylshikimate-3-phosphate synthase.

27. A glyphosate-resistant plant cell of Claim 22 in which the coding sequence encodes an EPSPS from an organism selected from the group consisting of bacteria, fun gi and plants.

28. A glyphosate-resistant plant cell of Claim 22 in which the chloroplast transit peptide is from a plant EPSPS gene....

45. A glyphosate-resistant oil seed rape cell of Claim 22.

[22] The 'chimeric' plant gene is a gene (i.e. DNA) that was molecularly engineered using multiple sources including plant, viral and bacterial DNA. Claim 1 of the patent sets out the basic claim to a chimeric plant gene. Claims 2, 5, 6, and 7 are claims dependant upon claim 1. Claim 22, also dependant upon claim 1, is for a glyphosate-resistant plant cell comprising a chimeric plant gene of claim 1, and claims 23, 26, 27 and 28, are dependant upon claim 22. Claim 45 is a glyphosate-resistant oil seed rape cell of claim 22.

[23] In interpreting the claims of a patent the Court takes a purposive approach not one unduly technical or literal (Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 183 (H.L.)). The interpretation should be fair and reasonable to both the patentee and the public (Burton Parsons Chemicals Inc. v. Hewlett-Packard (Canada) Ltd., [1976] 1 S.C.R. 555). If the words of the claim are clear and unambiguous it is not necessary to look any further to discover the nature of an invention.

[24] Evidence of the development and the nature of the patent was presented on behalf of the plaintiffs by Dr. Robert B. Horsch, an employee of Monsanto US and one of the inventors of the patent, and by Ms. Doris Dixon, a microbiologist employed by Monsanto, responsible for the testing undertaken by the plaintiffs in regard to some of the samples of Schmeiser's canola crop in 1998. None of their evidence about the nature of the patent was contested.

[25] Moreover, in my opinion, the construction of the patent, in relation to the claims in issue, is not contested except in relation to the claim for infringement. There the scope of the patent is in issue by the defence that since the defendants did not spray their 1998 crop of canola with Roundup herbicide, after it had emerged, they did not use the plaintiffs' invention. That issue I return to; here I propose simply to construe the patent.

[26] In my opinion the claims in issue are clearly expressed and it is unnecessary to consider the description or disclosure to understand them. Claims 1, 2, 5, 6 and 7 each claim a chimeric plant gene with characteristics as specified in the claim. Claims 22, 23, 26, 27, and 28, each concern a glyphosate-resistant plant cell comprising a chimeric plant gene of 13 claim 1, with other specified characteristics of the cell specified for claims other than claim 22. Finally, claim 45 claims simply a glyphosate-resistant oil seed rape cell of claim 22. The presence of the chimeric plant gene described in claim 1 is essential for all of the claims. The claims relate to genes and cells which are glyphosate-resistant. Obviously the invention has utility in resistance to glyphosate, but none of the claims specifies this utility nor does it require the use of glyphosate, such as Roundup herbicide, for the invention claimed.

[27] Because the progeny of glyphosate-resistant canola will contain the modified gene and will also be glyphosate-resistant, Monsanto developed a licensing arrangement to protect its patent, and its market, by limiting the opportunity of a grower, under licence, to sell or give seed to another or to retain it for his own use.

[28] All of the plaintiffs' licensing arrangements in Canada are made by or on behalf of Monsanto Canada. It licenses commercial seed growers to grow Roundup Ready canola for seed purposes. Farmers are required to attend a Grower Enrollment Meeting conducted by Monsanto representatives who describe the gene technology and the licensing terms for its use. A grower must be certified to use the gene technology by signing a Roundup Ready grower agreement. This entitles a farmer to purchase Roundup Ready canola seed from an authorized Monsanto agent, but to acquire seed the farmer must also sign a Technology Use Agreement provided by the retail seed agent acting for Monsanto Canada. Under the latter agreement, the farmer can use the seed for planting only one crop, to be sold for consumption to a commercial purchaser authorized by Monsanto. The farmer undertakes not to sell or give seed to any other third party and not to save seed for his own replanting or inventory. Under the TUA Monsanto has the right to inspect the fields of the contracting farmer and to take samples to verify compliance with the agreement. Mr. Schmeiser's farming practices

[29] As is apparently common practice for a number of canola farmers in the Bruno area, Mr. Schmeiser routinely saved a portion of the canola harvested on his property to serve as seed for the next generation of crops. Through this procedure, Mr. Schmeiser was able to avoid purchasing canola seed after 1993, until 1999, and over the years he believes he was able to develop his own strain of canola that was relatively resistant to various forms of diseases that tend to attack canola.

[30] It is the defendants' usual practice to grow a conventional variety of canola known as Argentine canola. They also grow wheat and peas, and in addition portions of his land are subject to summer fallow from time to time. For a number of years, Mr. Schmeiser has chosen to grow canola crops back-to-back in the same fields for a period of up to four years. At trial, he asserted that the advantage to such a farming practice is that one may then utilize the benefits of the fertilizer applied the year before, thereby using less and often creating a greater crop yield in the subsequent years. It is also the general practice of Mr. Schmeiser to time the cultivation of his land so as to avoid tilling potentially diseased plant remains into the soil and thereby reducing the possibility of certain diseases developing in new crops. Through this practice over the long-term the defendants say Mr. Schmeiser has been able to grow canola crops that are relatively free of weeds and the common diseases of blackleg and sclerotinia that plague canola. He claims his crops have been better-than-average yields in the Bruno, Saskatchewan area.

[31] Mr. Schmeiser testified that it is his general practice to use chemical herbicides as little as possible. However, he does use them when necessary for weed control. He prefers to utilize herbicides that can be incorporated into the soil, unlike Roundup, or those that can be applied in the spring, as these kill weeds when they germinate, thereby preventing the substantial loss of soil moisture that is suffered with the growth of weeds. He believes herbicide incorporated in the soil will be effective up to three years. Mr. Schmeiser also testified that he has used Roundup, particularly to burn off his fields before planting, or to 'chem fallow' fields, and also for spraying for weeds and volunteer plants around power poles and in road ditches. He does not like to use it on a growing canola crop. He finds that when sprayed on a growing crop it leaves a residue that kills a substantial amount of bacteria in the soil which affects the yield from back-to-back planting and increases the possibility of root diseases, such as blackleg and sclerotinia, in canola.

[32] In 1998 the defendants planted canola seed in all or part of each of eight quarter sections (containing nine fields), all within the Rural Municipality of Bayne No. 371, a total of 1,030 acres of canola. That crop was planted from seed said to have been saved from his 1997 crop, from his field number 2. In 1997 six of the same fields as in 1998, i.e. fields other than those identified at trial as fields 4, 7 and 9, were planted wholly or partly in canola, a total of 780 acres of canola. The 1997 crop was planted from seed said to have been saved from the 1996 crop, from field 1, when a total of 370 acres of canola was planted in all or parts of fields 1, 4, 6 and 7.

[33] In the 1996 crop year, from which Mr. Schmeiser's 1998 seed was said to be derived through the 1997 crop, there were five other growers with farms in the Rural Municipality of Bayne No. 371 who grew Roundup Ready canola. It is the evidence of Aaron Mitchell, Biotechnology Manager, Research Development Department of Monsanto, at Saskatoon, that of the farms licensed to grown Roundup Ready canola in 1996 the closest field to the defendants' field number 2, from which seed was saved in 1997, was approximately five miles.

[34] I note that in 1996 one of the licensed farmers, Mr. Huber, a neighbour of Mr. Schmeiser, grew seed under license from Monsanto on a quarter section just north and west of, and diagonally adjacent to, Mr. Schmeiser's field No. 6. It was the evidence at trial of Mr. Schmeiser's hired man, Carlysle Moritz, that at the end of the 1996 crop year, a substantial swath of canola had blown from Mr. Huber's land onto field No. 6. There was no evidence that seed from Schmeiser's field No. 6 was saved in 1996 to be used as seed for his 1997 crop.

[35] The evidence of Mr. Mitchell for Monsanto is that after both the 1996 and 1997 crop years, the crop was collected from licensed growers by commercial truckers who delivered all of the canola to crushing plants in trucks with tight tarpaulins. In the case of the Bruno crop area, the crushing plants were located at Nipawin or Clavet. Testing of Mr. Schmeiser's canola

[36] Despite inconsistencies in the recollections of witnesses for the plaintiffs on the one hand, and for the defendants on the other, the chronology of events leading to the commencement of this action can be generally described.

[37] In the summer of 1997, the plaintiffs, through Robinson Investigations, a private agency in Saskatoon, undertook random audits of canola crops growing in Saskatchewan. The farms were identified by Monsanto from among their licensed farmers, or from leads or tips suggesting that Roundup Ready seed might be growing on property of an unlicensed farmer, or from random inspections undertaken to audit a farming area. The defendants' farm was included in this audit process after an anonymous tip was received indicating that Roundup Ready canola was being grown in Schmeiser's fields, where it was not licensed.

[38] As we have noted Mr. Schmeiser testified that in 1997 he planted his canola crop with seed saved from 1996 which he believed came mainly from field number 1. Roundup-resistant canola was first noticed in his crop in 1997, when Mr. Schmeiser and his hired hand, Carlysle Moritz, hand-sprayed Roundup around the power poles and in ditches along the road bordering fields 1, 2, 3 and 4. These fields are adjacent to one another and are located along the east side of the main paved grid road that leads south to Bruno from these fields. This spraying was part of the regular farming practices of the defendants, to kill weeds and volunteer plants around power poles and in ditches. Several days after the spraying, Mr. Schmeiser noticed that a large portion of the plants earlier sprayed by hand had survived the spraying with the Roundup herbicide.

[39] In an attempt to determine why the plants had survived the herbicide spraying, Mr. Schmeiser conducted a test in field 2. Using his sprayer, he sprayed, with Roundup herbicide, a section of that field in a strip along the road. He made two passes with his sprayer set to spray 40 feet, the first weaving between and around the power poles, and the second beyond but adjacent to the first pass in the field, and parallel to the power poles. This was said by him to be some three to four acres in all, or 'a good three acres'. After some days, approximately 60% of the plants earlier sprayed had persisted and continued to grow. Mr. Schmeiser testified that these plants grew in clumps which were thickest near the road and began to thin as one moved farther into the field.

[40] Despite this result Mr. Schmeiser continued to work field 2, and, at harvest, Carlysle Moritz, on instruction from Mr. Schmeiser, swathed and combined field 2. He included swaths from the surviving canola seed along the roadside in the first load of seed in the combine which he emptied into an old Ford truck located in the field. That truck was covered with a tarp and later it was towed to one of Mr. Schmeiser's outbuildings at Bruno. In the spring of 1998 the seed from the old Ford truck was taken by Mr. Schmeiser in another truck to the Humboldt Flour Mill ('HFM') for treatment. After that, Mr. Schmeiser's testimony is that the treated seed was mixed with some bin-run seed and fertilizer and then used for planting his 1998 canola crop. Derbyshire samples, 1997 crop

[41] Before the 1997 crop was harvested, acting for Robinson Investigations, on August 18, 1997, Mr. Wayne Derbyshire, after trying unsuccessfully to speak with Mr. Schmeiser at his garage and at his residence, took pod samples of canola from the west side, along the road allowance, beside field 2 and from the south and east sides along the road allowances bordering field 5. He testified he did not trespass on Schmeiser's land, taking his samples from the crop apparently planted, as Mr. Schmeiser does and many other farmers do, in the road allowance bordering his fields. Mr. Derbyshire placed the samples of pods from three or four plants in separate bags, marking them for identification by Mr. Schmeiser's name, the date, his own file number and the number of the sample. The location of the sample gathering was described by Mr. Derbyshire in a document dated August 21, 1997, which, with the samples, was delivered to Robinson Investigations in Saskatoon on August 27, by courier. Until then the samples had been retained, sealed, in Mr. Derbyshire's car until his work in the Bruno area was completed on August 19. Thereafter he returned home to Regina after one further crop auditing by samples taken near North Battleford. At Regina, the samples from the borders of Schmeiser's fields were retained in Mr. Derbyshire's freezer until they were sent to Saskatoon.

[42] After these samples were received by Mr. Mike Robinson, president of Robinson Investigations, he forwarded them on September 2, 1997 to Aaron Mitchell, who was accepted at trial as an expert on weed control and agronomy, including the use of Roundup and canola. Mr. Mitchell air-dried the samples, removed seeds from the pods and resealed the seeds in envelopes. He delivered these in the fall of 1997 to the Phytoton Manager at the Crop Science Department of the University of Saskatchewan. Four seeds from each sample were planted for a grow out test. The remaining seed samples were returned to Mr. Mitchell, who retained those samples until they were delivered to Dr. Keith Downey on January 24, 2000 for the purpose of undertaking a further grow-out test of the remaining samples taken originally in 1997.

[43] At the University of Saskatchewan in the fall of 1997, four seeds of each sample were planted and two, three or four of the seeds germinated from each sample. When these reached the two or three leaf stage they were sprayed with Roundup herbicide. More than three weeks later all plants from five of these samples had survived the spraying. One of the samples from the border of field 5, from which only one seed germinated, did not contain any plant tolerant to Roundup. Mr. Mitchell believes this demonstrated that Roundup Ready canola was growing on Mr. Schmeiser's fields.

[44] In early 2000 Dr. Downey arranged for a grow-out test of the sample provided by Mr. Mitchell from seeds retained from the 1997 sample. Mr. Schmeiser and his counsel were invited to be present at commencement of the test. There were differences in the testimony of Dr. Downey and Mr. Schmeiser about the presence of cleaver seeds among the sample seeds. All seeds in the sample provided to Dr. Downey were planted. The grow-out test of the seeds resulted in about 50% of the seeds germinating. The subsequent application of Roundup herbicide left surviving all of the plants which germinated from the seed, demonstrating they were glyphosate tolerant. This led Dr. Downey to conclude that the seeds provided to him from the 1997 sample taken of plants growing along the road allowances of fields 2 and 5, demonstrated that the canola plants growing there were not the result of pollen movement into those fields, or out crossing between glyphosate-resistant and susceptible plants. Rather, in his view, the high percentage of glyphosate-tolerant plants, among those which had germinated, indicated they were grown from commercial Roundup Ready canola seed.

[45] As a result of the 1997 test on samples of Schmeiser's canola, in March 1998, Mr. Robinson, on instruction from Monsanto, visited Mr. Schmeiser in Bruno, and advised him that it was believed that Schmeiser had grown Roundup Ready canola the previous summer. Mr. Robinson testified he told Mr. Schmeiser that he was representing Monsanto and that samples had been taken the previous summer. Mr. Schmeiser denies this was said. His version of their conversation differs from that of Mr. Robinson, but nothing turns on this. It did provide notice to Schmeiser that Monsanto believed he had grown their product without a license. Mr. Schmeiser claimed that Mr. Robinson declined to permit their conversation to be tape recorded, a claim Robinson denies. Ultimately, Mr. Schmeiser says he did not treat seriously the concern raised by Mr. Robinson.

Samples from Humboldt Flour Mills

[46] Later in the spring of 1998, Monsanto representatives learned that the defendants had seed treated at the HFM and that HFM had retained samples of his seed for its own purposes. They requested a sample of the seed withheld from Mr. Schmeiser by HFM. Mr. Schmeiser had not previously used HFM for seed-treating purposes, and he was not aware that samples were regularly taken from the seed provided by farmers. As was done for all others whose seed was treated, HFM did take samples of the seed brought in by the defendants and of the seed after treatment and before delivery to Schmeiser. HFM provided a portion of both samples to Monsanto without informing Mr. Schmeiser that this had been done.

[47] With respect to the specimens taken by HFM in April 1998, the portions not provided to a Monsanto representative were kept in the possession of HFM, and turned over to its successor, when control of the business was assumed by the Saskatchewan Wheat Pool. When the samples were provided in April 1998 to the Monsanto representative, Mr. Robert Chomyn, he forwarded them to Mr. Aaron Mitchell on April 28, 1998. Mitchell subsequently divided the samples. Half of them he sent, on January 18, 1999, to Mr. Leon Perehudoff of Prairie Plant Systems, to conduct further grow-out tests. From those tests leaf samples were sent to Ms. Doris Dixon of Monsanto US for genetic testing in March, 1999. The other half of the sample held by Mr. Mitchell was sent by him to Schmeiser's counsel on April 23, 1999. It was later delivered by counsel to Mr. Lyle Freisen of the University of Manitoba on August 26, 1999, for the purpose of conducting grow-out tests on behalf of the defendants.

Sample in July 1998

[48] In late July, 1998, Mr. E. L. Shwydiuk, a representative of Robinson Investigations, acting for Monsanto, collected random samples of leaves from several canola plants growing in the rights of way near the boundary of each of Schmeiser's nine fields. These were subjected by Mr. Shwydiuk to a 'quick test', developed and used by Monsanto for detecting the presence of a protein found within Roundup Ready canola as a result of the inserted patented gene and cell. Each sample, from all the locations, tested positive for the presence of the tell-tale protein. The samples were sent to Robinson Investigations in September and thence forwarded to Ms. Dixon of Monsanto US in St. Louis for molecular analysis. As a result of tests by Monsanto all of these samples were positive for the presence of the patented gene.

Samples under Court Order, August 1998

[49] On July 30, 1998, a representative of Monsanto requested permission from Mr. Schmeiser to enter his fields to take samples from the current canola crop. Mr. Schmeiser denied the request.

[50] Following this failed attempt to gain further samples, Monsanto obtained a court order to allow its representatives to take samples from the defendants' crops. Mr. Schmeiser consented to the order on the understanding that he was to be present when those samples were taken. While the order did not specify an opportunity for him to be present, counsel for the plaintiffs did undertake by letter to advise the defendants' counsel a day before the plaintiffs' representatives proposed to collect samples, in order to facilitate arrangements by the defendants to attend the sampling.

[51] On August 13, 1998, Messrs. Don Todd and James Vancha, representing Robinson Investigations and Monsanto respectively, arrived at the defendants' farm to take samples under the court order. Apparently the defendants had not received earlier notice of their arrival. When Mrs. Schmeiser received them at home they were directed to the field where Mr. Schmeiser was working. They then met him in one of his fields. The recollections of Messrs. Todd and Vancha differ from those of Mr. Schmeiser as to what transpired between them. The representatives testified that Mr. Schmeiser refused to accompany them while they collected samples, though Mr. Schmeiser's evidence is that Messrs. Todd and Vancha would not allow him to accompany them in the sample-taking. Ultimately samples were taken from all of the defendants' nine fields, three samples from each field, all in the absence of Mr. Schmeiser.

[52] On completion of the sampling Messrs. Todd and Vancha met with Mr. Schmeiser again in one of his fields, and delivered to him a collection of 27 labelled bags containing pod samples, said to be half of the total sample taken in each location, the other half being retained for Monsanto. As each sample was collected one-half was put in each of two bags, one for Mr. Schmeiser and one for Monsanto.

[53] The samples taken in August 1998 and held for Monsanto were divided by Mr. Vancha so as to provide two separate samples for Mr. Aaron Mitchell. The first sample was delivered to Mitchell on September 8, 1998, and it was forwarded by Mitchell to Ms. Dixon of Monsanto US, for the purpose of genetic testing. The second sample, originally retained by Mr. Vancha, was given to Mr. Mitchell on January 14, 1999. He used this half to conduct a grow-out test, and to provide a sample to Mr. Leon Perehudoff of Prairie Plant Systems on January 19, 1999, who also conducted a grow-out test. After that test by Mr. Perehudoff, the tissue of 30 surviving plants was subsequently delivered to Ms. Dixon of Monsanto US at St. Louis to conduct further genetic testing. The results of these tests show the presence of the patented gene in a range of 95-98% of the canola sampled.

[54] The samples that Mr. Schmeiser received in August from Mr. Vancha following the sample collection on August 13, 1998, were kept in the vegetable storage area in the basement of Mr. Schmeiser's residence. In July 1999 he conducted his own grow-out test of seeds in the sample and he turned over the balance of the sample to his counsel in August 1999, to be sent to Mr. Freisen at University of Manitoba for testing.

[55] In 1999, Mr. Schmeiser learned of the samples of his seed that had been held by the HFM. The defendants obtained a portion of those samples on July 9, 1999, and Mr. Schmeiser retained some of this sample for his own test, and the balance he delivered to defendants' counsel in August 1999, to be forwarded to Mr. Freisen for testing.

[56] In July 1999, Mr. Schmeiser conducted his own grow-out test using a portion of the seeds in the samples provided by Messrs. Todd and Vancha and those obtained from the HFM. On completion of his own grow-out test, Mr. Schmeiser observed that, of the seven rows of canola he had planted for the test, the sample of his 1997-produced untreated seed obtained from HFM showed approximately 40-50% of the plants that germinated had survived after being sprayed with Roundup, with the exception of one row where 104 of the 105 plants that had germinated, died. The HFM treated sample had a Roundup survival rate of some 32%.

[57] The remainder of Mr. Schmeiser's stored sample from his 1998 crop earlier provided by Mr. Vancha, was delivered to the defendants' counsel who forwarded it to Mr. Freisen at the University of Manitoba on August 26, 1999, with the remainder of the sample provided to Mr. Schmeiser by HFM, for the purpose of conducting controlled grow-out tests. [58] Mr. Freisen obtained further seed samples of Mr. Schmeiser's 1997 seed directly from the Saskatchewan Wheat Pool (which had taken over the former HFM) in April 2000, to complete the grow-out tests prepared for the preparation of expert evidence at trial. After testing all of the samples provided to him by both the defendants and HFM, Mr. Freisen obtained a variety of results that ranged from 0% Roundup-tolerant to 98% Roundup-tolerant canola. At trial, he testified that while he could determine an average percentage of glyphosate-tolerant canola for the 17 samples he tested, there was little point in doing so because of the drastic differences in the level of Roundup tolerancee noted. His evidence did reveal that of the seeds grown from samples provided by HFM, before and after treatment, both those received from the defendants after they were obtained by Mr. Schmeiser in 1999 and those received directly from Saskatchewan Wheat Pool at Humboldt in April 2000, the survival rate of germinating plants after spraying with Roundup ranged from 95 to 98%. That range is evidence of the presence of commercial Roundup Ready canola. This evidence is supportive of the plaintiffs' claim.

[59] As earlier noted, the defendants did not purchase canola seed from 1993 until 1999. In 1999, because this action had been initiated, on the advice of their counsel the defendants destroyed all canola seed held from previous crops and purchased an entirely new inventory of seed for the planting of their 1999 canola crop, the source of which would be unquestioned. However, volunteer plants of Roundup Ready canola were said to be found within the 1999 canola fields grown by the defendants.


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