In 1999, LSL sued Hazera in Israel claiming that Hazera had breached provisions of the contracts between the two companies by, inter alia , working to develop firmer long-shelf life tomatoes. Fresh-market tomato seeds are bred for particular growing seasons and particular geographic climates. The relevant market consists of seeds designed to grow fresh-market tomatoes in North America during the winter months. The Restrictive Clause limits effective competition in innovation in the relevant market by excluding forever from the market one of the few companies likely to develop seeds for growing fresh-market tomatoes for United States consumers during the winter months. Novartis, Monsanto and some of the firms with smaller shares of the relevant market have been working to breed a better winter tomato for United States consumers.
Success is difficult, however.
A company needs a knowledgeable and skilled tomato breeder, and there are few such breeders available. There is also a significant learning curve to become such a breeder. Finally, breeding success is still, to a large degree, a hit or miss proposition. Much of the research and development to date has focused on the RIN gene for which defendants LSL and Seminis hold patent rights. The Restrictive Clause, however, bars Hazera from ever competing to develop tomato seeds specifically adapted for North American climates.