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

______________________
MONSANTO COMPANY AND MONSANTO TECHNOLOGY, LLC, Plaintiffs

- Appellees,

v.

E.I. DU PONT DE NEMOURS AND COMPANY AND PIONEER HI

- BRED INTERNATIONAL, INC., Defendants

- Appellants.

______________________

2013

- 1349

______________________ Appeal from the United States District Court for the Eastern District of Missouri in No. 09

- CV

- 068 6, Senior Judge E. Richard Webber.

______________________

Decided: May 9, 2014

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S ETH P. W AXMAN , Wilmer Cutler Pickering Hale and Dorr LLP, of Washington, DC, argued for plaintiffs

appellees. With him on the brief were P AUL R.Q. W O LFSON , T HOMAS G. S AUNDERS , C AROLYN J ACOBS C HACHKIN , and D ANIEL A GUILAR . Of counsel on the brief were G EORGE C. L OMBARDI , and J AMES M ATTHEW H ILMERT , Winston & Strawn LLP, of Chicago, Illinois ; J OHN J USTIN R OSENTHAL , of Washington, DC ; and J OSEPH P. C ON R AN , Husch Blackwell

, LLP, of St. Louis, M issouri

.MONSANTO COMPANY v. E

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T HOMAS G. H UNGAR , Gibson, Dunn & Crutcher LLP, of Washington, DC, argued for defendants

- appellants. With him on the brief was S COTT P. M ARTIN . Of counsel on the brief were J AMES P. D ENVIR III and A MY J. M AUSER , Boies, Schiller & Flexner LLP, of Washington, DC.

______________________
Before L OURIE , R EYNA , and W ALLACH , Circuit Judges.

L OURIE , Circuit Judge

. E.I. Du Pont de Nemours and Company and its su bsidiary Pioneer Hi

- Bred International, Inc. (collecti vely “DuPont”) appeal from the orders of the United States District Court for the Eastern District of Missouri impo sing sanctions on DuPont by striking DuPont’s contract reformation defense and counter claims and awarding Monsanto Company and Monsanto Techn ology, LLC (collectively “Monsanto”) attorney fees

. See Monsanto Co. v. E.I. Du Pont de Nemours & Co. , No. 4:09

- CV

- 0686, ECF No. 974 (E.D. Mo. Dec. 21, 2011) (sealed sanction s order); ECF No. 1043 (E.D. Mo. Feb. 16, 2012) (order approving itemized attor ney fees); ECF No. 1662 (E.D. Mo. Nov. 16, 2012) (unsealed and redacted version of sanction s order). Because the district court did not abuse its discretion in imposing the sanctions, we affirm

. B ACKGROUND Monsanto developed a genetic modification in soyb ean seeds

, marketed under the Roundup Ready ® (“RR”) brand

name and known as the 40 -3-2 event (the “RR trait”)

, which enables soybean plants to tolerate the application of glyphosate herbicide that kills weeds

. See Monsanto

, ECF No. 124, slip op. at 1 (E.D . Mo. Jan. 15, 2010) (partial judgment on the pleadings)

. Monsanto owns U.S. Patent RE 39,247 E ( the “ ’247 Patent”)

, which covers the RR trait

. In 1992, Monsanto granted Pioneer Hi

- Bred International, Inc. (“Pioneer”) a non exclusive license toMONSANTO COMPANY v. E

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produce and sell soybean seeds containing Monsanto’s glyphosate

- tolerant traits

. After Pioneer became a su bsidiary of DuPont, Monsan to and Pioneer entered into an Amended and Restated Roundup Ready ® Soybean L icense Agreement on April 1, 2002 ( the “ License ”) , which supersed ed the 1992 l icense. J.A. 656

. Under the License, DuPont pro duced and sold soybean seeds that were glypho sate -tolerant due to the RR trait. Monsanto , ECF No. 124, slip op. at 2.
In 2006, DuPont announced that it h ad developed its

own glyphosate

- tolerant trait

, Optimum GAT ® (“OGAT”)

, which was expected to confer tolerance to both glypho sate and acetolactate synthase inhibitor her bicide

. J.A. 33991. DuPont intended to commercialize the OGAT trait , but

s ub sequent testing indicated that OGAT alone did not provide sufficient glyphosate

- tolerance for commercial

use. J.A. 34004

. DuPont therefore stacked , or combined, its OGAT trait with Monsanto’s RR trait and discovered that the OGAT/RR stack provided increased yields in field trials

. Appellant Br. 15; J.A. 14281

. DuPont did not sell any OGAT/RR soybean product , however, and disconti nued its development in 2011 or 2012

. Reply Br. 29.
In May 2009, Monsanto sued DuPont for breach of the License and infringement of the ’247 Patent

. Monsanto maintained that the License did not allow DuPont to stack the RR trait with another g lyphosate

- tolerant trait

, such as OGAT

, or to commer cialize the stacked prod uct

. Monsanto , ECF No. 124, slip op. at 2. DuPont answered and counterclaimed that t he License permitted it to stack OGAT with RR and that if the License were interpreted to restrict or preclude the OGAT/RR stack

, then the L icense should be reformed. Id

. ; Monsanto , ECF No. 21, at 81

– 82 (E.D. Mo. June 16, 2009) (answer and counterclaims). DuPont also asserted antitrust counterclaims. Id

.MONSANTO COMPANY v. E

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T he License provides in section 3.01 that: (a) Subject to the terms of this Agreement, Mo nsanto hereby grants to Licensee, and Lice nsee, hereby accepts, a non

- exclusive license within the License d Field

. . . to develop, use, produce, have produced, offer to sell, sell and import Licensed Commercial Seed

. . . . (e) The parties agree that except for applicable patents, Licensee shall be free to introduce any gene and/or trait into, and commercialize as set forth in subparagraph 3.01(a) , Licensed Commercial Seed

. . . without the prior co nsent of Monsanto, except as specifically pr ovided in subparagraph 3.01(g) and 3.01(h).

. . . (g) Licensee shall not be entitled to . . . (iv) use Biological Materials outside the Li censed Field

. . . . (i) Licensee agrees not to commercialize a vari ety of Licensed Commercial Seed which carries a gene or genes not supplied by Monsanto and which results in increased tolerance to a non

glyphosate herbicide without the prior written
consent of Monsanto which consent shall not be withheld if Licensee reasonably demo nstrates

. . . that the introduction of such nonglyphosate herbicide tolerance gene(s) does not increase the injury

. . . from glyphosate appl ication to the crop

. . . . J.A. 660

– 61 (emphase s added). The term “Licensed Field” is defined in section 2.09 as: “Licensed Commercial Seed which exhibit genetically

- engineered protection against Glyphosate herbicide solely due to the presence of the Glyphosate

- Tolerant Soybean Event: 40 -3- 2.” Id. at 658 (emphasis added).MONSANTO COMPANY v. E

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T he district court granted partial judgment on the pleadings to Monsanto in January 2010 , holding that the License was “unambiguous and [ did ] not grant [DuPont] the right to stack non

- RR glyphosate

- tolerant trait tec hnologies with the licensed ” trait

. Monsanto , ECF No. 124, slip op. at 10, 23

. The court reasoned that the primary license grant provision, section 3 .01(a)

, was limited to a license “ to produce and s ell Licensed Commercial Seed ‘within the Licensed Field .’” Id. at 7. In view of the Licensed Field definition in section 2.09

, the court co ncluded that “Licensed Commercial Seed may only exhibit glyphosate resistance that is solely due to 40 -3-2,” and thus that the OGAT/RR stack was outside the Licensed Field because it generated glyphosate resistance that was not solely due to 40 -3- 2. Id. at 7

– 8 (empha sis in original). The court therefore dismissed DuPont’s contract

- based counterclaim. Id. at 24.

On January 29, 2010, DuPont moved for reconsider ation and sought to restore its counterclaim to reform the License

. Monsanto , ECF No. 150 (E.D. Mo. Jan. 29, 2010) (motion for reconsideration)

. DuPon t also moved for leave to file a s econd amended answer and c ounterclaims (“SAAC”) to add three contract reformation counterclaims. Monsanto , ECF No. 164 (E.D. Mo. Feb. 19, 2010) (motion for leave to amend) . DuPont contended that the amen dments were the product of “ additional investigations ” into the factual bas is for reformation. Id. at 11

– 12.

T he district court declined to reconsider its ruling that the License did not grant DuPont “ a right to creat e OGAT/RR stacked seed products .” Monsanto , ECF No. 283, slip op. at 8 (E.D. Mo. July 30, 2010) (order on m otions for reconsideration and for leave to amend)

. W hile

n oting that “it [would] be difficult for Defendants to prove their reformation claims, especially given the clear and convincing evidence standard ,” i d. at 14 , t he cour t non etheless granted DuPont l eave to file the SAAC to assert reformation counter claims and defens e s, i d. at 15.MONSANTO COMPANY v. E

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In the SAAC, DuPont acknowledged that it intended
to commercialize the OGAT/RR stack and assert ed that the License should be reformed to reflect the parties’ understanding that it would not restrict DuPont from developing the OGAT/RR stack

. Monsanto , ECF No. 316, at 30

– 31, 108 , 110

– 11 (E.D. Mo. Aug. 19, 2010). DuPont based the amended reformation counterclaim s on three alternative ground s: (1) mutual mistake, (2) DuPont’s unilateral mistake and Monsanto’s knowing silence, and (3) Monsanto’s fraud

. Id. at 167

– 72

. To support those counter claims, DuPont asserted that “[a]t all times during the drafting and exec ution of the [ License ]

, Pioneer and DuPont thought that [ the L icense ] did not prohibit Pioneer from stacking other traits or genes, including traits or genes for glyphosate tolerance

. .

. . ” Id. at 167

– 69. DuPont also asserted that “Pioneer and DuPont and Monsanto’s agents all understood that the Licensed Field term, including the language ‘ solely due to the presence of ’ . . . has nothing t o do with stacking restrictions, ” and that “Pioneer and DuPont did not at any time understand the Licensed Field term to restrict Pioneer from stacking traits or genes that provide similar protection as the licensed trait.” Id. at 121. During discovery, both parties fil ed motions that requir ed the district court’s freque nt intervention

. Concer ning DuPont’s reformation counter claims, Monsanto moved to compel production of documents relating to DuPont’s understanding of stacking restrictions under the License. Monsanto , ECF No. 639 (E.D. Mo. Mar. 4, 2011). The district c ourt ruled that

, by asserting reformation claims based on mutual mistake and unilateral mistake

, DuPont had placed its subjec tive belief concerning its stacking rights at issue

, “the truthful resolution of which r equire[ed] an examination of attorney- client communic ations .” Monsanto , ECF No. 756 , slip op. at 3 (E.D. Mo. May 17, 2011). The court consequently gave DuPont the option to “either voluntarily dismiss these reformationMONSANTO COMPANY v. E

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claims or produce to Monsanto all documents bearing on these iss ues that it previously withheld.” Id. at 4.

DuPont chose to continue litigating its reformation
counter claims and produced previously withheld internal

e- mails of its in

- house attorneys and high -level executives who were directly involved in negoti at ing the License. T hose e

- mails showed , for example, that DuPont’s negot iators were aware in March 2002 that the “solely” la nguage in section 2.09 could be a stacking restriction

. See,

e .g. , J.A. 14797 (“[S] ection 2.09 may be a problem . . . if we use a Glyphosate resistance gene (i.e. GAT) as a s electable marker in soybean transformation

. ”)

. Moreover, when DuPont developed the OGAT/RR stack in 2007 and early 2008, those in

- house attorneys advised that DuPont did not have the right to commercialize the OGAT/RR stack “[b]ecause of the field of use limitation in section 3.01(a).” See, e .g. , J.A. 14291, 14799

. Monsanto then moved for sanction s, seeking to invoke the district court’s inherent powers and asserting that DuPont had misrepresent ed its subjective belief concer ning stacking rights and had perpetrated a fraud on the
court

. Monsanto

, ECF No. 864 (E.D. Mo. Sep t . 6, 2011). DuPont maintained in opposition that it had always understood that the License auth orized it to make and sell the OGAT/RR stack. Monsanto , ECF No. 893, at 9

– 10, 13, 21 (E.D. Mo. Sept. 21, 2011) ( DuPont’s opposition brief) ; Monsanto

, ECF No. 961, at 43:3

– 5 (E.D. Mo. Nov. 30, 2011) (motion hearing transcript)

. After a hearing, t he district court granted the motion and imposed sanctions pursuant to its inherent powers on December 21, 2011

. Monsanto , ECF No. 974 (sealed sanction s order); ECF No. 1662 (unsealed and redacted version). The court noted that

, since the beginning of th e litigation, DuPont had taken the position that “ they contracted for, and have always believed that the [L icense] provided them with, the right to stack and co m-MONSANTO COMPANY v. E

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mercialize ” the RR trait with the OGAT trait in soybean s, which provided the basis for DuPont’s reformation claims. Monsanto , ECF No. 1662, slip op. at 2. The court found, however, that DuPont’s position was not “ rooted in fact” and that DuPont had made misrepresentations , which called into question its candor to the court

. Id

. Specifically, Mons anto argued that DuPont had made five types of mis representations in its pleadings and motions : (1) that it “always had the right to commercia lize (or sell) RR/OGAT stacked seeds; ” (2) that it “always had the right to s tack RR and OGAT traits; ” (3) that it “believe[d] that Section 2.09 of the license agreements, the ‘Licensed Field’ definition, ha [d] no relation to stac king; ” (4) that it “did not discover the meaning of the ‘Licensed Field’ definition and its li mitation on stacking until 2008 ; ” and (5) that it “believe[d] that Section 3.01(a) [did] not contain any type of field of use limitation.” Id. at 4. After reviewing the record and considering arguments from both parties, the court found that DuPont had made factual misrepresentations concerning it s subjective belief

un der each of the five categories as shown by its internal documents in order to support its reformation claims

. Id. at 8, 15, 18

– 20. The court thus held that DuPont had perpetrat ed a fraud on the court and abused the judicial

process , which warranted sanctions

. Id.
As sanctions, t he district court struck DuPont’s reformation defense and counterclaims. Id

. at 32. Mor eover , after finding that DuPont had acted in bad faith, t he
court awarded attorney fees to Monsanto , but limited the award to fees incurred in defending against DuPont’s reformation counter claims beginning on January 29, 2010, the date on which DuPont moved to restore those claim s , as well as fees incurred for the sanctions motions

. Id. at 34 ; Monsanto , ECF No. 1043.

The parties then litigated the remaining claims

. In June 2012, t he district court granted summary judg mentMONSANTO COMPANY v. E

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in Monsanto’s favor on its breach of contract claims and rejected DuPont’s license defense , but held that the only contractual damag es available to Monsanto were nominal damages

. Monsanto , ECF Nos. 1308, 1309, 1310 (E.D. Mo. June 6, 2012). The patent infringement claims proceeded to trial and the jury returned a verdict for Monsanto

, award ing a royalty as damages for the patent infri ngement

. Monsanto , ECF No. 1563 (E.D. Mo. Aug. 1, 2012). A separate trial on DuPont’s antitrust counte rclaims was sched uled for October 2013. Monsanto , ECF No. 1618 (E.D. Mo. Oct. 2, 2012). In March 2013, Mo nsanto and DuPont stipulated to dismiss all claims and counterclaims with prejudice and jointly moved for final judgment. Monsanto , ECF No. 1687 (E.D. Mo. Mar. 26, 2013). DuPont reserved its right to appeal from the sanctions or ders and rulings embodied therein, but no t from other orders or rulings of the court. Monsanto , ECF No. 1688 (E.D. Mo. Mar. 26, 2013). The district court entered final judgment accordingly

. Monsanto , ECF No

. 1691 (E.D. Mo. Mar. 26, 2013).
DuPont timely appealed and w e have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). Zenith Elecs. Corp. v. Exzec, Inc. , 182 F.3d 1340, 1346 (Fed. Cir. 1999) (holding that dismissal of patent claims with prejudice did not divest our jurisdiction to review a district court’s decision regarding nonpatent claims ).

D I SCUSSION

I.
In appeals in patent cases, w e apply the law of the r egional circuit “ to which district court appeals normally lie, unless the issue pertains to or is unique to patent law.” Molins PLC v. Quigg , 837 F.2d 1064, 1066 (Fed. Cir. 1988). W hen revi ewing the imposition of sanctions under a district court’s inherent powers , we apply the law of the regional circuit in which the district court sits

, here theMONSANTO COMPANY v. E

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Eighth Circuit. Baldwin Hardware Corp. v. FrankSu Enter. Corp.

, 78 F.3d 550, 560

– 562 (Fed. Cir. 1996).
The Eight h Circuit reviews a district court’s impos ition of sanctions under its inherent power s for an abuse of discretion. Stevenson v. Union Pac. R. R. Co.

, 354 F.3d 739, 745 (8th Cir. 2004) (citing Ch am bers v. NASCO, Inc.

, 501 U.S. 32, 55 (1991) ) ; Dillon v. Nissan Motor Co. , 986 F.2d 263, 267 (8th Cir. 1993)

. Applying Eighth Circuit law , w e give “substantial deference to the district court’s determination as to whether sanctions are warranted because of its familiarity with the case and co unsel i nvolved.” Willhite v. Collins , 459 F.3d 866, 869 (8th Cir. 2006). Moreover, “whether the extent of a sanction is appropriate is a question peculiarly committed to the district court.” Dillon , 986 F.2d at 268. “[T]he issue is not what we might ha ve done if the situation had been pr esented to us originally, but rather, w he ther the district
court abused its discretion in imposing the sanction.” Id. at 267. “‘ A district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence. ’ ” Plaintiffs’ Baycol Steering Comm. v. Bayer Corp. , 419 F.3d 794, 802 (8th Cir. 2005) (quoting Cooter & Gell v. Har tmarx Corp. , 496 U.S. 384, 405 (1990)). Fact ual findings

ar e not clearly erroneous unless “the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer, 470 U.S. 564, 573 (1985).

II.

DuPont contends that interpreting the objective meaning of the License was a question of law and that the district court improperly sanctioned DuPont for making reasonable legal arguments that section 3.01 of the L icense permitted stacking and commercialization of glyphosate

- tolerant traits. DuPont also contends that the district court erred in improperly re lying on selectedMONSANTO COMPANY v. E

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documents to find that DuPont misrepresented its subje ctive belief concerning stacking restrictions , whereas the full record reflected a co ntested factual issue

. Moreover, DuPont contends that the views of its individual emplo yees should not be attributed to the company . DuPont also contends that the statements made by its employees in 2007 and 2008 were irrelevant to the reformation of the 2002 agreement and that those state ments were merely conservative legal advice of in

- house counsel

. DuPont asserts that the sanctions were improper because the court’s ability to function impartially was not adversely affected and that the sanctions would hinder zealous advocacy

. DuPont also asserts that its conduct did not meet the high standard for a finding of fraud on the court

. Monsanto responds that the district court did not sanction DuPont for making legal arguments concerning the objective meaning of the License, but

, rather

, the
court imposed narrowly

- tailored sanctions on DuPont for factual misrepresent a tions of its subjective be lief concer ning stacking rights support ing its refor mation claim s. Monsanto contends that those representations were directly contradicted by DuPont’s later- produced internal documents and that t he court proper ly relied on doc uments that were authored by DuPont’s in

- house attorneys and top executives who negotiated the License. Moreover, Monsanto argues that the court properly considered documents from 2007 and 2008

, because they shed add itional light on DuPont’s prior understanding of the 2002 agreement and whether DuPont continued to maintain that understanding

. Monsanto also responds that DuPon t’s repeated misrepresentations and their effect on the litigation supported the court’s finding that DuPont acted in bad faith , which warranted the attorney fees sanction

. We agree with Monsanto that the district court did not abuse its discretion in impo sing narrowly -tailored sanctions on DuPont fo r making factual misrepres ent a-MONSANTO COMPANY v. E

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tions concerning its subject ive understanding of the License in order to advance its reformation counterclaims. “[A] district court possesses inherent power s ‘ to manage [its] affairs so as to achieve the orderly and expeditious disposition of cases .’ ” Wescott Agri

- Prods., Inc. v. Sterling State Bank, Inc. , 682 F.3d 1091, 1095 (8th Cir. 2012) (quoting Chambers , 501 U.S. at 43 ). “A court must exe rcise its inherent powers with restraint and discretion, and a primary aspect of that discretion is the ability to fashion an appropriate sanction.” Harlan v. Lewis, 982 F .2d 1255, 1262 (8th Cir. 1993).

The record is clear that t he district court did not s an ction DuPont for making legal arguments concerning the objective meanings of the License. Almost two years before imposing the sanctions, t he court interpreted the License as a matter of law in the partial judgment on the pleadings , in which it conclude d that the License did not grant DuPont the right to stack OGAT with the RR trait

. Monsanto , ECF No. 124. DuPont then moved for reco nsider ation of that interpretation and, alternatively, sought to reform the Li cense so that it could avoid i nfringement liability for develop ing the OGAT/RR stack

. Monsanto , ECF No s . 150
, 316

. T he district court declined to reconsider its interpretation of the License , but granted DuPont leave to file the SAAC to pursue its reformation counterclaims

. Monsanto

, ECF No . 283

. Thus, the obje ctive meaning of the License had been decided at an early stage of the litigation and DuPont’s allegations were made in an attempt to obtain reformation of the License in view of the district court’s interpretation

. *

* Because DuPont had stipulated to only appeal from the sanctions orders, and not from other rulings of the district court including t he partial judgment on the plea d ings, we need not consider whether the district court correctly interpreted the License as a matter of law.MONSANTO COMPANY v. E

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I n the san ctions order, the district court made clear that DuPont was sanctioned for knowing ly making fact ual misrepresentations concerning its subject ive belief in order to maintain its reformation claims. Monsanto , ECF No. 1662, slip op. at 2, 4 , 8, 15, 18

– 20

. The court re viewed DuPont’s statements in the SAAC and subsequent m otions concerning reformation and found that DuPont had misrepresented its subjective belief, an element of refo rmation that was to be decided as a matter of fact

. I d. at 8– 9, 15

– 16
, 18

– 19

. As sanctions, the court specifically and exclusively targeted the reformation claims, which depended on DuPont’s factual misrepresentations, by striking those claims and awarding related attorney fees. Id. at 32

– 34. Even though t he court also cited sta tements from DuPont’ s motion opposing the partial judgment on the plead ings regarding the objective meaning of the License

, the court referred to those statements only to infer DuPont’s litigation position on its subjective belief co ncerning the License

. I d. at 5– 6, 8, 20 ( finding that DuPont maintained in the litigation that “they believed they had the right to sell RR/OGAT stacked seeds”)

. B y asserting the reformation counterclaims after the partial judgment on the pleadings, DuPont maintained its prior posi tion that the 2002 agreement allowed it to stack and commercialize an OGAT/RR prod uct
, although at that later stage it based its claims on its purported subjective belief in t hat position

. Even assuming that DuPont’s arguments concerning the objective meaning of the L icense were not sanctionable when first made

, its subs equent insistence in attempting to reform the License to reflect its interpretation of the agreement rendered those earlier statements relevant to factual issues underlying the reformation claims

. Under Delaware law, which governs the License, a contract may be reformed in rare instances to express the “real agreement” of the parties

. Cerberus Int’ l, Ltd. v.MONSANTO COMPANY v. E

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Apollo Mgmt. L.P. , 794 A.2d 1141, 1151 (Del. 2002). Delaware law recognizes three grounds for reformation: (1) mutual mistake, (2) unilateral mistake coupled with knowing silence of the other party, and (3) fraud by the other party

. See i d. (mutual mistake and unilateral mistake); Emmert v. Prade

, 711 A.2d 1217, 1219 (Del. Ch. 1997) (fraud). Because a duly executed forma l instrument may not be lightly set aside, a party seeking to reform a
contract must prove by clear and convincing evidence that

, before executing the written instrument, the partie s came to a specific prior understanding that differed materially from the written agreement, and that it mi stakenly believed that the final, executed contract acc urately expressed that prior understanding. Cerberus , 794 A.2d at 1150

– 52, 1155; Hob Tea Room, Inc. v. Miller , 89 A.2d 851, 856

– 57 (Del. 1952). Thus

, by asserting refo rmation counterclaims based on all three possible grounds, DuPont ’s subjective belief concerning the License became

a material factual issue

. Here, t he district court did not clearly err in finding that DuPont had made material factual misrepresent ations of its subjective belief. DuPont’s la ter- produced internal documents contradict it s litigation statements concerning its subjective belief

. For example, DuPont maintained in th e SAAC that it “did not at any time understand the Licensed Field term [in section 2.09] to restrict” stacking of glyphosate

- tolerant traits. Monsanto

, ECF No. 316, at 121. However, i n a March 26, 2002 email, a DuPont negotia tor noted that “section 2.09 may be a problem . . . if we use a Glyphosate resistance gene (i.e. GAT) as a selectable marker in soybean transformation.” J.A. 14797. Th e district court thus found that DuPont was aware of possible stacking restriction s in section 2.09

, but it did not c hange the language of that section or suggest any language on the topic of stacking glyphosate

tolerant traits prior to executing the License

. Monsanto

, ECF No. 1662, slip op. at 10

– 11, 18. Thus, w e discern noMONSANTO COMPANY v. E

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clear error in the district court’s findin gs that DuPont had made factual misrepresentations of its subjective unde rstanding

. We also find no error in the district court’s reliance on the statements of DuPont’s individual employees to infer DuPont’s subjective belief concerning the License. Those employees were high

- level ex ecutives and in

- house atto rneys , who directly participated in the negotiation with Monsanto as DuPont’s corporate representatives

. In addition, b ecause DuPont had waived its attorney

- client privil ege to pursue the reformation counterclaims, the court properly considered the state ments of DuPont’s in

house attor neys who were part of the negotiation team

. In addition, w e find no error in the district court’s di scretionary consideration of subsequen t state ments made by those negotiators in the 2007 and 2008 documents

, which are relevant at least as circumstantial evidence of DuPont’s prior understanding of the 2002 agreement and whether DuPont “always” had that understanding as it had pled

. DuPont’s negotiators stated in 2007 that DuPont did not have the right to commercialize the OGAT/RR stack because of the field of use limitation in section 3.01(a). J.A. 14799. The district court observed that those negotiators expressed “no surprise at an e xpec ted claim by Monsanto that the [License contained] stacking restrictions. ” Monsanto , ECF No. 1662, slip op. at 28. Moreover, DuPont asserted to the district court that it had always believed that the License granted it certain rights

, and thus the 2007 a nd 2008 documents

were relevant to the basis of that assertion

. Monsanto

, ECF No. 893, at 1, 9

– 10, 21; ECF No. 961, at 43:3

– 5. As such, the court did not err in considering the 2007 and 2008 docu ments. DuPont argues , however, that the record as a whole sh owed a disputed factual issue concerning its subjective belief and thus did not warrant sanctions for misrepr e-MONSANTO COMPANY v. E

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sentation. DuPont specifically referred to internal e

- mails between its negotiators in March 2002. J.A. 14440, 14969

– 70 , 14301

– 02

. However, we find that those e

- mails do not support DuPont’s broad assertion to the district
court that it had negotiated for and obtained the right to make and sell an OGAT/RR product

. In a March 27 , 2002 e- mail, a DuPont negotiator i nformed his colleague that the pa rties were “[s]till having major prob lems with the RR/[ ] stack on beans as a co mmercial product,” but Monsanto had “OK’ed a gene that confers [glyphosate] resistance as a marke [ r ] (i.e. GAT).” J.A. 14440 (emphasis added)

. That negotiator, however, cautioned his colleague that “ [b] efore you get too excited about GAT . . . [t]hey do not know about it specifi cally, and they will obviously have other issues (i.e. pa tents) regarding [its] use . . . [but] at least the agreement does not prohibit use of a non

- Mon [santo] gene which supplies gly [phosate] -tolerance.” J.A. 14440. In a March 28

e- mail, the negotiator explained to his colleague that by introducing section 3.01(i)

, which addressed the stacking and commercialization of non

- glyphosate -tolerant gene (s) with the RR trait

, DuPont “would not be blocked against using another glyphosate resistance gene as a selectable marker

, . . . but

. . . it does not necessarily mean we have an FTO on another Gly [phosate]

- tolerant gene, ” where FTO referred to freed om- to

- operate. J.A. 14969 (emph asis added)

. Upo n review of the entire record, w e find no clear e rror in the district court’s finding of misrepresentation

. The March 27 and 28 e- mails are consistent with the court’s finding that DuPont was aware that Mons anto sought to impose stacking restrictions during the license negotiation , but that DuPont did not pro pose contract language to specifically address its right to stack and commercialize an OGAT /RR product

. At best, t hose e

mails showed that DuPont anticipated using O GAT as a selectable marker , a research tool or marker for detectingMONSANTO COMPANY v. E

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. DU PONT DE NEMOURS 17

the successful transformation of another gene into the RR soybeans

. T hose e

- mails , however, contained no discu ssion concerning wheth er DuPont negotiated for the right
to make and sell an OGAT/RR commercial product. Notably, DuPont made no argument at the district court that the License should be reformed based on DuPont’s purported belief that it was not prohibited from using OGAT as a se lectable marker. Ins tead , DuPont sought in the district court to re form the License in order to obtain the express right to make and sell an OGAT/RR prod uct
, when its internal documents directly contradicted its broad assertion of that right

. See, e.g.

, J. A. 14799 (“[DuPont] can stack but no commercial rights.”) ; J.A. 14318 (“A conservative reading says we can stack but may not be able to commercialize, a potentially useless right.”)

. We therefore conclude that the district court did not clearly err in finding that DuPont had misrepresented its subjective belief concerning the License in order to mai ntain its reformation claims

. We further conclude that the district court did not abuse its discretion in imposing its narrowly

- tailored sanc tions

. A district court has the discretion “‘to fashion an a ppropriate sanction for conduct which abuses the judicial process,’ including assessing attorney fees or dismissing the case.” Wescott , 682 F.3d at 1095 (quoting Chambers

, 501 U.S. at 44

– 45). “When a litigant’s conduct abuses the judicial process, dismissal of a lawsuit is a remedy within the inherent power of the court.” Martin v. Dai mlerChrysler Corp. , 251 F.3d 691, 694 (8th Cir. 2001) (citing Pope v. Fed. Express Corp. , 974 F.2d 982, 984 (8th Cir. 1992) )

. Under Eighth Cir cuit law, “a finding of bad faith is not always necessary to the court’s exercise of its inhe rent power to impose sanctions.” Stevenson , 354 F.3d at 745; Harlan , 982 F.2d at 1260 (noting that the bad faith requirement does not extend “to every possible di scipl inary exercise of the court’s inherent power”). However, “[a] bad faith finding is specifically required in order toMONSANTO COMPANY v. E

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. DU PONT DE NEMOURS 18

assess attorneys’ fees.” Stevenson , 354 F.3d at 751 (citing Chambers , 501 U.S. at 45

– 46). Thus, “if a court finds that fraud has be en practiced upon it, or that the very temple of justice has been defiled, it may assess attorney’s fees against the responsible party, as it may when a party shows bad faith by delaying or disrupting the litigation or by hampering enforcement of a court o rder.” Chambers

, 501 U.S. at 46 (internal citation and quotation marks omitted).
Here, t he district court found that DuPont had abused the judicial process and acted in bad faith. The court found that DuPont repeatedly mis represented its subje ctive belie f in order to support its reformation counte rclaims, which prolonged the “already

- protracted proceedings and caused unnecessary expense to Monsa nto and needless effort by the [c] ourt.” Monsanto , ECF No. 1662, slip op. at 8 , 15, 19, 20

. T he court found that DuPont delayed the litigation “by their insistence that they believed they had the right to stack and commercia lize RR and OGAT.” Id. at 33. The court reasoned that striking portions of the SAAC was “the only means” to deter DuPont’s misconduct and to preclude DuPont from continuing its behavior , which the district court found to be “ an abuse of judicial process.” Id. at 32. The court also found that the repeated misrepresentations had “co mpromised the integrity of the case

, ” that DuPont’s refusal “to abandon these false statements . . . amount [ed] to vexatious conduct ,” and that DuPont had “acted in bad faith.” Id. at 34.

We consider t hose findings of the district court not to be clearly erroneous

, as the court had first

- hand knowledge of how DuPo nt’s conduct affected the progress of the litigation

. For almost two years from January 2010
to December 2011, DuPont restored, amended, and lit igated its reformation counter claims. When seeking leave
to file the SAAC , DuPont represented to the district court that the amend ed counter claims were the product of itsMONSANTO COMPANY v. E

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. DU PONT DE NEMOURS 19

“additional investigation” of the factual basis for refo rmation. Monsanto , ECF No. 164, at 11

– 12. DuPont’s internal documents , however, contradicted its litigation
statements concerning reforma tion . Those internal documents were initially withheld by DuPont under a claim of privi lege and produced only after the court ’s ruling on Monsanto’s motion to compel, in which the court
gave DuPont the option of either dismissing the refo rmation claims or producing those internal docu ments. DuPont chose to continue litigating the reformation claims and seeking to invoke the court’s equitable power to reform the License in order to obtain the right to make and sell an OGAT/RR product

, despite contradictory evidence showing that DuPont’s own negotiators que stioned whether DuPont had obtained that right

. We therefore conclude that the district court did not err in holding that DuPont had abused the judicial process and acted in bad faith.
Moreover, t he district court properly exercised its di scretion in imposing targeted sanctions by carefully fitting its sanctions to the conduct that it found to be improper

. The court allowed DuPont to continue litigating other contract, patent infringement , and antitrust count e rclaims and defenses. T he court lim ited the attorney fees award to fees directly incurred on the reformation claims after January 29, 2010, the date on which DuPont moved
to restore those claims

. We therefore conclude that the court acted wi thin its discretion. Although , as indicated, we agree with the district court that DuPont’s overly zealous advocacy to advance its reformation claims constituted bad faith and vexatious conduct , w e do find that DuPont’s conduct did not satisfy the high standard for “fraud on the court ” as described in Nichols v. Klein Tools, Inc. , 949 F.2d 1047, 1048 (8th Cir. 1991) and Pfizer Inc. v. International Rectifier Corp. , 538 F.2d 180, 195 (8th Cir. 1976). In those cases, fraud on the
court was narro wly defined as “the most egregious mi s-MONSANTO COMPANY v. E

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. DU PONT DE NEMOURS 20

conduct directed to the court itself, such as bribery of a judge or jury or fabrication of evidence by counsel.” Id. Such conduct did not occur here. However, other Eighth Circuit cases appear to apply a lower standard for sanctions under the court’s inherent

powers and do not require a finding of “fraud on the
court .” See, e.g.

, Gas Aggregation Servs., Inc. v. Howard Avista Energy, LLC , 458 F.3d 733, 739 (8th Cir. 2006) (sanctions after a finding of bad faith ); Stevenson , 354 F.3d at 751 ( sanctions of attorney fees and adverse infe rence jury instruction for “bad faith conduct” ); see also Chambers , 501 U.S. at 46 ( sanctions of attorney fees when a party “ shows bad faith by delaying or disrupting the litigation” )

. Under the lat t er test, DuPont exceeded the bounds of appropriate conduct and stretched its advocacy beyond what was reasonably justi fied

. B ecause the district court correctly found that DuPont had abused the judicial process and acted in bad faith by making affirm ative factual misrepresentations and because the court imposed narrowly -tailored sanctions, we affirm

. C ONCLUSION
Because we conclude that the district court did not abuse its discretion in imposing the sanctions on DuPont

, we affirm

. AFFIRMED