**United States Court of Appeals for the Federal Circuit**

03-1243, 04-1001

MONSANTO COMPANY,

> Plaintiff-Appellee,

v\.

KEM L. RALPH,

(individually and doing business as Ralph Brothers Farms),

Defendant-Appellant.

[Seth P. Waxman]{.underline}, Wilmer Cutler Pickering LLP, of
Washington, DC, argued for plaintiff-appellee. With him on the brief was
[Joseph C. Orlet]{.underline}, Husch & Eppenberger, LLC, of St. Louis,
Missouri.

[James L. Robertson]{.underline}, Wise Carter Child & Caraway P.A., of
Jackson, Mississippi, argued for defendant-appellant.

Appealed from: United States District Court for the Eastern District of
Missouri

Judge Rodney W. Sippel

####  United States Court of Appeals for the Federal Circuit

03-1243, 04-1001

MONSANTO COMPANY,

Plaintiff-Appellee,

v\.

KEM L. RALPH\
(individually and doing business as Ralph Brothers Farms),

> Defendant-Appellant.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DECIDED: September 7, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before LOURIE, GAJARSA, and PROST, [Circuit Judges]{.underline}.

LOURIE, [Circuit Judge]{.underline}.

Kem L. Ralph appeals from two final judgments of the United States
District Court for the Eastern District of Missouri: (1) a July 12,
2002, judgment on orders of October 10, 2001, striking Ralph's pleadings
under Fed. R. Civ. P. 37(b), and February 15, 2002, imposing monetary
sanctions for discovery abuses, intentional violation of court orders,
and repeated attempts to conceal his misconduct, [Monsanto Co. v.
Ralph]{.underline}, No. 4:00CV135 RWS (E.D. Mo. July 12, 2002); and (2)
a July 9, 2003, judgment entering a jury award to Monsanto of nearly
three million dollars in damages for patent infringement, or, in the
alternative, breach of contract, and granting Monsanto's motion for
permanent injunction, [Monsanto Co. v. Ralph]{.underline}, No. 4:00CV135
RWS (E.D. Mo. July 9, 2003) ("[2003 Judgment]{.underline}"). Ralph also
appeals from the September 3, 2003, order of the trial court denying
Ralph's post-judgment motion to set aside the jury's award of damages
for patent infringement. [Monsanto Co. v. Ralph]{.underline}, No.
4:00CV135 RWS (E.D. Mo. Sept. 3, 2003). Because we hold that the
contract-based damages are excessive in light of our recent decision in
[Monsanto Co. v. McFarling]{.underline}, 363 F.3d 1336 (Fed. Cir. 2004)
("[McFarling]{.underline}"), but that the trial court did not abuse its
discretion in its choice of sanction or its denial of Ralph's
post-judgment motion, and that Ralph has not shown that the larger jury
award for patent infringement is unlawful, clearly not supported by the
evidence, or based only on speculation or guesswork, we vacate-in-part
and affirm-in-part.

BACKGROUND

As explained in greater detail in [McFarling]{.underline}, Monsanto
developed and patented recombinant gene sequences that can be inserted
into plant seeds to protect them against the effects of glyphosate-based
herbicides, enabling farmers to spray herbicides such as Monsanto's
Roundup® over their fields to kill weeds and other undesirable plants
without killing the desired crops that grow from those seeds. Monsanto
also developed and patented recombinant gene sequences encoding proteins
that are toxic to certain insects that commonly cause significant damage
to host plants. When those sequences are incorporated into seeds, the
resulting plants produce, in effect, their own insecticide. Monsanto
provides nonexclusive, restricted-use licenses to various seed
companies, which manufacture seed containing the two patented
technologies described above and sell those seeds under the
Roundup-Ready® and Bollgard® brand names, respectively. Monsanto
additionally requires retailers to execute standardized contracts with
growers before selling Roundup-Ready® or Bollgard® seed to them.

Mr. Ralph is a farmer who resides in western Tennessee. Together with
his brother Roger, he operates Ralph Brothers Farms, a partnership that
grows cotton, soybeans, and corn in Tennessee's Tipton, Shelby, and
Haywood Counties. In 1998, Ralph purchased 264 fifty-pound bags of
soybean seed containing the patented Roundup-Ready® biotechnology. In
1999, he purchased 127 fifty-pound bags of cottonseed, containing both
the Roundup-Ready® biotechnology and the Bollgard® biotechnology
(hereinafter, "stacked-trait" cottonseed). According to the contract
that was in use at the time that Ralph purchased the Roundup-Ready®
soybean seed and stacked-trait cottonseed ([i.e.]{.underline}, the
"Technology Agreement"), the farmer, or "grower," was required, in
exchange for the opportunity to purchase and plant seed containing the
Roundup-Ready® and/or Bollgard® technology, to agree,
[inter]{.underline} [alia]{.underline}:

To use the seed containing Monsanto gene technologies for planting a
commercial crop only in a single season.

To not supply any of this seed to any other person or entity for
planting, and to not save any crop produced from this seed for
replanting, or supply saved seed to anyone for replanting.

To not use this seed or provide it to anyone for crop breeding,
research, generation of herbicide registration data or seed production.

The Technology Agreement also contained a forum-selection clause,
conferring personal jurisdiction over the grower in the Eastern District
of Missouri, and a clause specifying damages in the event of breach by
the Grower. The latter clause reads as follows:

In the event that the Grower saves, supplies, sells or acquires seed for
replant in violation of this Agreement and license restriction, in
addition to other remedies available to the technology provider(s), the
Grower agrees that damages will include a claim for liquidated damages,
which will be based on 120 times the applicable Technology Fee.

At the time Ralph purchased the aforementioned seeds, the Technology
Fee, which was built into the price of each seed bag, was \$5.00/bag for
Roundup-Ready® soybean seed and \$112.80/bag for stacked-trait
cottonseed.

The district court found that Ralph saved 796 bags of Roundup-Ready®
soybean seeds and 108 bags of stacked-trait cottonseed at the end of the
1998 harvest for planting in the 1999 growing season, in contravention
of the Technology Agreement. According to the court, Ralph again
illicitly saved seed in 1999 for planting in 2000: 438 bags of
Roundup-Ready® soybean seeds and 817 bags of stacked-trait cottonseed.

After an investigation indicated that Ralph might have saved and
re-planted patented seeds, Monsanto filed suit against Ralph in the
district court on January 28, 2000, asserting claims for,
[inter]{.underline} [alia]{.underline}, willful infringement of
Monsanto's U.S. Patents 5,164,316, 5,196,525, 5,322,938, 5,352,605, and
5,633,435, and breach of contract. On February 10, 2001, Ralph filed a
Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue,
in which he asserted that he had no contacts with Missouri and should
not be required to defend a case there. [Monsanto Co. v.
Ralph]{.underline}, No. 4:00CV135 RWS, slip op. at 3 (E.D. Mo. Feb. 15,
2002) ("[2002 Order]{.underline}"). The court found that assertion to be
untrue, as it was discovered thereafter that Ralph had been doing
business with Sinkers Corporation in Kennett, Missouri, for over twenty
years in matters directly related to the underlying claims in this case.
[Monsanto Co. v. Ralph]{.underline}, No. 4:00CV135 RWS, slip op. at
22-23 (E.D. Mo. Oct. 10, 2001) ("[Sanction Hearing
Transcript]{.underline}").

That same month, when Monsanto arrived to sample Ralph's crops, to which
Ralph had previously consented, Ralph revoked his consent, forcing
Monsanto to obtain an order from the district court permitting it to
enter. [2002 Order]{.underline}, slip op. at 4. The court granted the
order on February 24, and, based on Ralph's misrepresentation that he
would need to plant his seed by March 1,[^1] the court's order gave
Monsanto until that date to investigate. Ralph initially represented
under oath that he had not stored any seed, but the district court found
that, after being confronted with evidence from Sinkers that he had
stored cottonseed there, he admitted that the seed had existed.
[Sanction Hearing Transcript]{.underline}, slip op. at 27. However,
according to the court, Ralph testified that he had violated the court's
order and burned all of the stored seed. [Id.]{.underline} He offered to
stipulate that those bags all contained Monsanto's patented
stacked-trait cottonseed. [2002 Order]{.underline}, slip op. at 4.
Monsanto rejected that offer, apparently suspecting that Ralph may again
have been lying and that he may have sold or transferred some of those
bags to other farmers. [Id.]{.underline} at 4-5. In fact, after deposing
Kem and Roger Ralph and filing a motion for sanctions for their
misconduct, Monsanto deposed the operator of the dump where Ralph
allegedly burned the seed, who stated that it appeared to him that Ralph
had burned only about a hundred bags and that Ralph told him he had
burned 700 bags, [id.]{.underline} at 5, out of the more than 1800 bags
of seed that the court found that Ralph had stored at Sinkers, [Sanction
Hearing Transcript]{.underline}, slip op. at 30. Monsanto also deposed
three other farmers, Norman Kelly, David Bradshaw, and DeWayne Hendrix,
all of whom declared under oath that Ralph had sold or given
stacked-trait cottonseed to them. [2002 Order]{.underline}, slip op. at
5-6. Monsanto then renewed its Motion for Sanctions. The court found
that Ralph had engaged in additional, intentional obstruction of the
discovery process by, [inter]{.underline} [alia]{.underline}, failing to
inform Monsanto of his complete land holdings and failing to disclose
the stored cottonseed at Sinkers in response to Monsanto's
interrogatories, and by requiring Monsanto to take depositions of
witnesses that would not have been necessary if it had not been for
Ralph's refusal to cooperate. [Id.]{.underline} at 6-7.

At a hearing held on October 10, 2001, the court exercised its
discretion under Fed. R. Civ. P. 37(b) to sanction Ralph by striking all
of his pleadings in the case as a penalty for, [inter]{.underline}
[alia]{.underline}, intentionally violating court orders and repeatedly
lying under oath. [Sanction Hearing Transcript]{.underline}, slip op. at
33. The court concluded that that was the only appropriate remedy,
because "Monsanto, like the Court, will never have any comfort that it
knows the truth, and that it can properly prepare this case for
trial . . . . The integrity of this Court and our judicial system . . .
has been undermined by almost every aspect of the Ralph Brothers \[sic\]
conduct in this case." [Id.]{.underline} The court entered judgment for
Monsanto on liability and ordered the case to trial on damages only. The
court additionally asked Monsanto to brief its costs and expenses
incurred as a result of Ralph's deceptive conduct, refusal to comply
with the court's orders, and lying about those refusals.
[Id.]{.underline} at 34. On February 15, 2002, the court ordered Ralph
to reimburse Monsanto \$104,506.47 for its expenses. [2002
Order]{.underline}, slip op. at 8.

On December 12, 2002, after hearing Monsanto's witnesses, the jury
returned a verdict for Monsanto for what it deemed to be a reasonable
royalty for Ralph's infringement, [viz.]{.underline}, \$55.04/bag for
the 796 bags of soybean seed that Ralph saved for planting in 1999,
\$548.00/bag for the 108 bags of cottonseed that he saved for 1999,
\$52.12/bag for the 438 bags of soybean seed he saved for 2000,
\$556.80/bag for the 817 bags of cottonseed he saved for 2000, and
\$1113.36/bag for 200 bags of cottonseed that he transferred to Kelly,
for a total of \$803,402. The court trebled that amount for willfulness
and added \$178,036.51 for prejudgment interest, \$57,833.20 for costs,
and \$291,451.36 for attorney fees, resulting in a total award of
\$2,937,527.07 for patent infringement. The jury also awarded Monsanto,
in the alternative, \$1,877,472 in liquidated damages under the
Technology Agreement ([i.e.]{.underline}, 120 times the \$5.00
technology fee for each of the 264 bags of soybean seed that Ralph
purchased, plus 120 times the \$112.80 technology fee for each of the
127 bags of cottonseed that he purchased). After adding prejudgment
interest, costs, and attorney fees, the court granted a total award of
\$2,741,543.95 for the breach of contract. Because the patent
infringement and breach of contract claims were filed in the
alternative, the court concluded that satisfaction of the higher patent
infringement award would extinguish the lesser breach of contract award.
[2003 Judgment]{.underline}, slip op. at 2. Finally, the court entered a
permanent injunction prohibiting Ralph's "current and future purchase,
acquisition, making, use, sale, offers to sell, brokering, transfer,
cleaning, and/or reconditioning . . . of any seed containing Monsanto's
patented biotechnology . . . \[or\] planting, moving, collecting
transferring, or obtaining, in any manner, any patented biotechnology in
\[his\] possession, or under \[his\] control, wherever situated," and
ordering him to inventory and produce all patented biotechnology in his
possession to Monsanto. [Id.]{.underline} at 3.

Ralph timely appealed the court's judgment.[^2] We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

A. [Sanctions]{.underline}

On appeal, Ralph argues that the district court abused its discretion by
striking his pleadings and entering judgment for Monsanto on liability.
According to Ralph, "if Kem Ralph has been less than completely
forthcoming in some of his responses . . . , it was because he realized
that complete answers would get his friend \[Hendrix\] in trouble."
Ralph apparently asserts that such a display of loyalty should have
mitigated his sanctions, stating that "\[t\]he desire to protect a
friend is never a justification for telling less that \[sic\] the
complete truth in response to questions properly put in a judicial
proceeding. But it certainly does go to good faith and the question of
what price the party must pay." Ralph further contends that his attempt
to keep Monsanto from finding out about the Sinkers-stored seed was in
any event ineffectual, because Monsanto was ultimately able to unearth
all of the facts on its own. He also argues that he did not actually
violate an "order to provide or permit discovery," Fed. R. Civ. P.
37(b)(2), because, he claims, the only order arguably sufficient by its
own terms had expired on March 1, 2000, the day before he burned the
seed. He contends that the appropriate sanction for intentional
spoliation of evidence would have been simply to declare a rebuttable
presumption that all of the Sinkers-cleaned cottonseed contained the
patented traits, just as he had offered to stipulate. Further, according
to Ralph, the truth regarding three out of Monsanto's four claims,
[i.e.]{.underline}, those with regard to saved soybean seed and
cottonseed planted in 1999 and saved soybean seed planted in 2000, was
never in doubt, as any concealment related only to cottonseed saved for
planting in 2000. Ralph argues that the court should have considered his
defenses, especially those purporting to show that the '435 patent is
invalid for failure to disclose the best mode of the invention, that his
signature was forged on the Technology Agreement, and that he never sold
any seed to Kelly. Ralph also argues that there are strong public policy
reasons why he should be allowed to pursue patent misuse and
anti-competitive conduct affirmative defenses and counterclaims.

Monsanto responds by arguing that the district court's sanction was
commensurate with Ralph's deliberate and wide-ranging abuses. According
to Monsanto, no lesser sanction would have served the purposes of
punishment and deterrence. In particular, Monsanto asserts, a spoliation
instruction would have improved Ralph's position, rather than
sanctioning him, because it would have covered up the fact that Ralph
actually sold and/or transferred some seed. Monsanto further argues that
the district court's selection of sanction is entitled to substantial
deference and the court did not abuse its discretion by striking Ralph's
pleadings.

In reviewing sanction orders, this court applies the law of the regional
circuit from which the case arose, in this case the Eighth Circuit.
[Transclean Corp. v. Bridgewood Servs., Inc.]{.underline}, 290 F.3d
1364, 1370 (Fed. Cir. 2002). "\[W\]hether the extent of a sanction is
appropriate is a question peculiarly committed to the district court."
[Dillon v. Nissan Motor Co.]{.underline}, 986 F.2d 263, 268 (8th Cir.
1993). District courts have wide latitude in fashioning an appropriate
sanction, [Aziz v. Wright]{.underline}, 34 F.3d 587, 588 (8th Cir.
1994), and, in particular, the Eighth Circuit has held in a case
involving less egregious discovery abuses than at issue here that

striking a party's pleadings under Rule 37 is within the range of
appropriate sanctions when a party demonstrates a blatant disregard of
the Court's orders and the discovery rules, engaging in a pattern of
deceit by presenting false and misleading answers and testimony under
oath in order to prevent their opponent from fairly presenting its case.

[Chrysler Corp. v. Carey]{.underline}, 186 F.3d 1016, 1022 (8th Cir.
1999) (internal quotation marks omitted).[^3]

We agree with Monsanto that there was reasonable basis for the court's
sanctions. The spoliation instruction that Ralph argues should have been
given as a sanction instead would simply have created a presumption that
all 1879 bags of Sinkers-stored seed contained the patented traits and
were burned. That sanction would have trivialized the magnitude of the
harm caused by Ralph's behavior, because if the seed had simply been
burned, there would have been little basis for Monsanto to argue that it
would suffer any continuing harm as a result of Ralph's saving of that
seed, and Monsanto might not have been adequately compensated. However,
most of those 1879 bags are unaccounted for and there is evidence that
at least some of that seed was transferred to others. The potential risk
to Monsanto's business from such a transfer goes far beyond any harm
that would have come from Ralph's burning seed, because of the
exponential growth rate of the seeds. For example, the Environmental
Protection Agency requires county-by-county monitoring of Bollgard®
cottonseed to control environmental impact and ensure efficacy.
Violation of the limited-use restriction set forth in the Technology
Agreement could have caused Monsanto to lose control over the
technology, because a single Bollgard® cottonseed produces a plant that
yields 70 to 120 patented seeds. Even a single bag of the cottonseed
transferred to another farmer could therefore, by a conservative
estimate, produce hundreds of thousands of bags of seed
([i.e.]{.underline}, 70 x 70 x 70 = 343,000) over the course of just
three growing seasons.

Although Ralph has cited several cases in which the Eighth Circuit
reversed dismissal sanctions, including [Edgar v.
Slaughter]{.underline}, 548 F.2d 770 (8th Cir. 1977), [Baker v. General
Motors Corp.]{.underline}, 86 F.3d 811 (8th Cir. 1996), [rev'd on other
grounds]{.underline}, 52 U.S. 222 (1998), and [Heartland Bank v.
Heartland Home Finance, Inc.]{.underline}, 335 F.3d 810 (8th Cir. 2003),
those cases did not involve findings of willful violation of court
orders, destruction of evidence, or subornation of perjury, as were
present in this case. As the Eighth Circuit explained in [Denton v. Mr.
Swiss of Missouri, Inc.]{.underline}, 564 F.2d 236 (8th Cir. 1977),
"\[t\]he judicial system cannot tolerate litigants who flagrantly refuse
to comply with the orders of the court and who refuse to make discovery,
for delay and evasion are added burdens on litigation, causing waste of
judicial and legal time, are unfair to the litigants and offend the
administration of justice." [Id.]{.underline} at 241.

As for Ralph's argument that the court order that the district court
found that he had violated had already expired when he supposedly burned
the seed, we agree with Monsanto that Ralph was not entitled to the
benefit of the March 1 cut-off date set by the court because that date
was based on Ralph's perjurious affidavit regarding the date on which he
intended to prepare his fields. Moreover, Ralph has not shown that he
did not transfer any seed prior to that date, and he certainly did not
demonstrate that he had given Monsanto access to the 1879 bags during
the pendency of the order. On the contrary, the record suggests that
Ralph actively concealed the existence of those bags by leaving them at
Sinkers until he believed that the order had expired. In fact, according
to the district court, Ralph had represented under oath during the
pendency of the order that there was no stored seed. [Sanction Hearing
Transcript]{.underline}, slip op. at 27. We find no abuse of discretion
in the court's refusal to allow Ralph to benefit from his own perjury.
Furthermore, as Monsanto points out, the district court has the inherent
power under section 37 to sanction abuses of the judicial process
irrespective of the existence of any particular order.

Ralph's arguments that his conduct would only have affected one out of
four claims in this case and that he concealed information only to
protect his friend Hendrix are similarly unavailing. The district court
justifiably concluded that Ralph's subornation of perjury and lying
under oath with respect to cottonseed saved in 2000 cast a pall of doubt
over all of his defenses. According to the court, "lies . . . compounded
upon lies. . . . The violations \[were\] willful and continuing. The
defendants . . . engaged in a systematic pattern of lying to keep the
truth from being discovered in this case," [Sanction Hearing
Transcript]{.underline}, slip op. at 30-31, and it was only when
confronted with objective evidence that Ralph would purport to come
clean, at which time he would "come forward and tell another story. . .
. \[T\]he Court's only conclusion is that they changed their story to
fit the moving target of the truth," [id.]{.underline} at 28. Not only
did Ralph destroy evidence, but in doing so he also knowingly violated
the court's orders and he was found to have lied under oath with regard
to the extent of the destruction. As a result, the court concluded that
it had "no confidence that we will ever know the truth in this case,"
and that "\[w\]henever given the chance to tell the truth, the
defendants have consistently chosen dishonesty." [Id.]{.underline} at
31. We conclude, therefore, that the court did not abuse its discretion
by refusing to limit its sanctions to the cottonseed saved for 2000.
With respect to Ralph's argument that he was trying to protect Hendrix,
we agree with the district court that "\[l\]ying to protect a friend is
lying, pure and simple. Lying to give an alibi to another criminal is
punishable. . . . Lying to protect a friend is nothing more than lying."
[Id.]{.underline} at 28.

Ralph's argument that Monsanto was not prejudiced by any of his perjured
testimony because Monsanto uncovered all the facts on its own misses the
point, because it fails to take into account that Monsanto had to take
costly steps to uncover facts that Ralph was obligated to provide
voluntarily. Moreover, because the district court found that the full
truth could not be ascertained, the full extent of the prejudice to
Monsanto from Ralph's deceit is likewise unknowable. Further still, even
if there was no harm at all to Monsanto, Ralph's conduct undermined the
integrity of the court and the judicial system, and sanctions would have
been warranted on that basis alone. Finally, although we agree with
Ralph that there are important public policy reasons to allow an accused
infringer to prove that patents asserted against him are invalid or
unenforceable, Ralph gave up the right to attempt to fulfill that role
when he violated the court's orders and lied to the court. Accordingly,
for the foregoing reasons, we conclude that the district court did not
abuse its discretion by striking Ralph's pleadings.

B. [Reasonable Royalty Damages]{.underline}

Ralph next argues that he is entitled to a new trial on damages for
patent infringement. In particular, he contends that the court erred by
refusing to limit damages to a reasonable royalty for the use that he
actually made of the seed, rather than for the uses that he could
potentially have made and that he has now been enjoined from making.
According to Ralph, a reasonable royalty deduced through a hypothetical
negotiation process can never be set so high that no rational
self-interested wealth-maximizing infringer acting [ex]{.underline}
[ante]{.underline} would ever have agreed to it. More particularly,
Ralph asserts that [Georgia-Pacific Corp. v. United States Plywood
Corp.]{.underline}, 318 F. Supp. 1116 (S.D.N.Y. 1970), [award modified
and aff'd]{.underline}, 446 F.2d 295 (2d Cir. 1971), requires that an
infringer be given a reasonable opportunity [ex]{.underline}
[ante]{.underline} to make a profit. Ralph also contends that there was
no need for a hypothetical negotiation in this case, because, he argues,
lost profits were shown and those should have been the measure of
damages. Even if lost profits had not been shown, Ralph argues, the
standard Technology Fee that Monsanto charges all farmers is "the most
established royalty patent infringement litigation has ever seen."

Monsanto responds that the jury's award reasonably reflects that Ralph
misappropriated a license to use the seed without restrictions, as his
infringing use extended well beyond the licensed planting of a
commercial crop for a single growing season. Counsel for Monsanto also
asserted during oral argument that the assessed \$55.04/bag and
\$52.12/bag reasonable royalty damages for saved and replanted soybean
seed and the \$548.00/bag and \$556.80/bag reasonable royalty damages
for saved and replanted cottonseed are all reasonable royalties for
licenses to save and replant for a single year; and that \$1113.36/bag
is a reasonable royalty for a license to save and transfer cottonseed,
notwithstanding the fact that Monsanto would not agree to ever grant any
such unlimited licenses.

We agree with Monsanto that the court did not err in its determination
of a reasonable royalty and its denial of Ralph's post-trial motion. The
jury's award of damages is entitled to deference. Specifically, the
jury's damages award "must be upheld unless the amount is grossly
excessive or monstrous, clearly not supported by the evidence, or based
only on speculation or guesswork." [Brooktree Corp. v. Advanced Micro
Devices, Inc.]{.underline}, 977 F.2d 1555, 1580 (Fed. Cir. 1992)
(internal quotation marks omitted). The record in this case reveals that
the jury was instructed in the factors set forth in
[Georgia-Pacific]{.underline} for determination of a reasonable royalty
and based its determination of a reasonable royalty on the testimony of
an expert witness who was cross-examined by Ralph's attorney. Although
that witness was hired by Monsanto, the jury apparently found his
testimony to be credible, and awarded approximately 80% of the damages
established by his analysis. Ralph chose to withdraw his own expert
witness on the day on which he was to testify, and he therefore cannot
complain that the only witness that testified was on Monsanto's payroll.
In any event, Ralph has not satisfied his burden of showing that "the
award is, in view of all the evidence, either so outrageously high or so
outrageously low as to be unsupportable as an estimation of a reasonable
royalty." [Lindemann Maschinenfabrik GmbH v. Am. Hoist & Derrick
Co.]{.underline}, 895 F.2d 1403, 1406 (Fed. Cir. 1990).

Ralph's suggestion that the Technology Fee is an established royalty for
the use that he made of the seed can be rejected as unsound. One of the
most fundamental tenets of patent law is that a patent gives its owner
the right to exclude others from making, using, selling, offering to
sell, or importing the patented subject matter. 35 U.S.C. § 271 (2000).
If the patent owner chooses not to totally exclude others, he or she may
negotiate with a potential licensee to permit the licensee to make, use,
sell, or import the patented subject matter under whatever terms the
parties agree upon. Monsanto has chosen, as is its prerogative, to
permit farmers to plant a commercial crop of the patented seeds in a
single season in exchange for payment of the Technology Fee and a
promise, manifested through the Technology Agreement, not to save those
seeds that are harvested at the end of the growing season for
replanting, production, sale, or transfer to others. The Technology Fee
is a royalty, to be sure, but it is a royalty for only a narrow,
contractually agreed-upon, use of the seed. It is undisputed in the
record that Monsanto has not granted licenses to anyone to plant,
produce, or transfer saved seed. The Technology Fee is therefore not an
established royalty for planting or transferring saved seed, the uses
that Ralph made of the patented invention.

Ralph argues that no sane farmer would ever negotiate a royalty in
excess of his anticipated profits. However, although an infringer's
anticipated profit from use of the patented invention is "\[a\]mong the
factors to be considered in determining" a reasonable royalty,
[see]{.underline} [Georgia-Pacific]{.underline}, 318 F. Supp. at 1120,
the law does not require that an infringer be permitted to make a
profit. And, where, as here, a patentee is unwilling to grant an
unlimited license, the hypothetical negotiation process has its limits.
As we explained in [Del Mar Avionics, Inc. v. Quinton Instrument
Co.]{.underline}, 836 F.2d 1320 (Fed. Cir. 1987), the "imposition on a
patent owner who would not have licensed his invention for \[a given\]
royalty is a form of compulsory license, against the will and interest
of the person wronged, in favor of the wrongdoer." [Id.]{.underline} at
1328; [see also]{.underline} [Rite-Hite Corp. v. Kelley
Co.]{.underline}, 56 F.3d 1538, 1554 n.13 (Fed. Cir. 1995) ("The
hypothetical negotiation is often referred to as a 'willing
licensor/willing licensee' negotiation. However, this is an inaccurate,
and even absurd, characterization when, as here, the patentee does not
wish to grant a license."). Just as Ralph asserts that he would never
pay Monsanto such a royalty just to be able to save seed for replanting
or transfer, Monsanto would apparently never permit Ralph to save seed
for replanting or transfer at any price.

Because denials of motions for judgment as a matter of law, remittitur,
or new trial are not unique to patent law, we apply regional circuit law
in our review of those decisions. Under the Eighth Circuit's case law,
the district court's denial of such motions is reviewed for "manifest
abuse of discretion or a verdict that is so grossly excessive as to
shock the conscience." [Macgregor v. Mallinckrodt, Inc.]{.underline},
373 F.3d 923, 932 (8th Cir. 2004). We have held that a court has wide
discretion in making the determination denying such a motion, [Unisplay,
S.A. v. Am. Elec. Sign Co.]{.underline}, 69 F.3d 512, 517 (Fed. Cir.
1995), and that a court should grant such a motion only if "the jury's
verdict is against the clear or great weight of the evidence," [Standard
Havens Prods. v. Gencor Indus.]{.underline}, 953 F.2d 1360, 1367 (Fed.
Cir. 1991). We see no abuse of discretion in this case, as the jury's
determination on reasonable royalties was supported by the evidence of
record and was properly accepted by the district court in its denial of
Ralph's motion.

C. [Liquidated Damages]{.underline}

Finally, Ralph contends that the liquidated damages clause in the
Monsanto Technology Agreement constitutes an unenforceable penalty,
rather than a measure of compensation, and that he is entitled to
judgment as a matter of law on that issue.

Even if the clause is enforceable, Ralph argues that he did not agree to
it, and that his signature was forged on the Monsanto Technology
Agreement.

Monsanto responds that the 120 multiplier in the liquidated damages
clause of the Monsanto Technology Agreement was appropriate because the
extent of the harm to Monsanto caused by a breach was difficult to
predict [ex]{.underline} [ante]{.underline}. Monsanto's arguments in
support of the 120 multiplier are similar to those that it presented in
[McFarling]{.underline}, in which we vacated and remanded a jury verdict
awarding damages calculated using the 120 multiplier on the basis that
it offends Missouri state law. [McFarling]{.underline}, 363 F.3d at
1347-50. In that case, we concluded that the "one-size-fits-all" 120
multiplier failed to distinguish between the various modes of breaching
the contract. [Id.]{.underline} at 1348 ("The 120 multiplier in the
Technology Agreement also violates the anti-one-size rule because it
specifies the same measure of damages in the event of breach of several
different restrictive provisions of the contract that lead to different
types of damages."). The same defect is present in this case, and at
oral argument counsel for Monsanto conceded the point. Moreover, because
the damages awarded to Monsanto for Ralph's infringement of its patents
exceed the liquidated damages awarded for breach of contract, and the
district court held that "satisfaction of the higher damages amount by
the defendants shall extinguish the alternate damages amount," [2003
Judgment]{.underline}, slip op. at 2, we see no reason to remand the
case to the district court to determine an appropriate damages award for
breach of the Technology Agreement.

We have considered Ralph's other arguments and find them unpersuasive.

CONCLUSION

Although we have determined that the contract-based damages are
excessive in light of our recent decision in [McFarling]{.underline},
the trial court did not abuse its discretion in its choice of sanction
or its denial of Ralph's post-judgment motion, and Ralph has not shown
that the jury award for patent infringement is "grossly excessive or
monstrous," clearly not supported by the evidence, or based only on
speculation or guesswork. Accordingly, the decision of the district
court is

######### VACATED-IN-PART AND AFFIRMED-IN-PART

[^1]: The district court found that Ralph did not begin tilling his
    fields until April 1 each year. [Sanction Hearing
    Transcript]{.underline}, slip op. at 22.

[^2]: In January 2003, Ralph also filed a Post-Judgment Motion for
    Judgment as a Matter of Law Notwithstanding the Verdict of the Jury
    and/or for a New Trial and/or for a Remittitur. The court denied
    that motion on September 3, 2003.

[^3]: In [Chrysler]{.underline}, the sanctioned defendants had withheld
    evidence by denying its existence. Going far beyond that mere
    concealment of evidence in [Chrysler]{.underline}, Ralph was found
    to have destroyed some of the evidence and then apparently lied
    about destroying the remainder of the evidence to further conceal
    his actions.