NOTE: The Minnesota Supreme Court heard this case twice. This is the first time they heard this case. On 12/29/00, the NAM filed an amicus brief with the Minnesota Supreme Court challenging the application of New Jersey’s Consumer Fraud Act to the differential pricing and distribution of two herbicides with the same active ingredient. At the end of January, that court declined to hear this appeal.The more expensive herbicide was registered under state law for use on both major and minor crops. However, the newer and less expensive product was registered only for use on major crops, even though the EPA permits its use on minor crops. A group of farmers who grow minor crops filed suit against BASF under a New Jersey unfair competition statute prohibiting "unconscionable commercial practices." The appellate court found that BASF could be held liable for not selling the newer product for minor crop use due to the difference in pricing between the two similar herbicides.
The NAM urged a reversal of the appellate court’s ruling, as this application of the New Jersey statute effectively forces compulsory licensing of a valid United States patent for a field of use the patent holder chose not to exploit. This not only infringes on federal patent rights, but also discourages firms from devoting substantial resources to the discovery, development and marketing of inventions that may require higher pricing to be profitable.
After trial, the NAM filed an amicus brief 8/21/02 supporting BASF's appeal of an adverse jury award, treble damages and costs totaling over $52 million. The appeal involved a variety of issues under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), patent law, pesticide law and consumer fraud law. The NAM's brief argued that the New Jersey law is preempted by federal patent law because patent owners are entitled to license the use of patented products with restrictions. A "field of use" restriction is a valid right of patent owners, where they can license a patented product for a particular market or application. In addition, we argue that a state may not question the validity of a patent under its own consumer fraud laws. Patent issues are the exclusive province of the federal patent system and must be decided under federal law.
On 3/11/03, the court rejected the appeal, allowing the award to stand, without discussing the NAM argument. It found that the trial judge did not abuse his discretion and that an issue involving class certification had been previously appealed. The Minnesota Supreme Court agreed to review this case, and upheld the jury verdict on 2/19/2004.