## Facts

- Pioneer developed proprietary inbred corn lines and hybrids through extensive research and treated its breeding material and related information as confidential.
- Hybrid corn is produced by crossing two inbred parent lines; the genetic composition of the parent lines determines hybrid performance.
- Holden developed and sold inbred parent lines to other seed companies, enabling production of competing hybrids.
- Pioneer alleged Holden improperly acquired and used the genetic makeup of Pioneer’s proprietary inbred and hybrid lines (including material associated with a key parent line) to develop Holden inbreds (including LH38, LH39, and LH40).
- Pioneer sued under Iowa law theories of trade-secret misappropriation and conversion, asserting ownership interests in the valuable genetic characteristics embodied in its seeds.
- After a bench trial, the court addressed whether the genetic characteristics were protectable property and whether Holden’s conduct constituted misappropriation and conversion.

## Issues

1. Whether the genetic characteristics embodied in proprietary inbred and hybrid seed lines constitute protectable personal property under Iowa law.
2. Whether Pioneer’s confidential genetic information and breeding material qualified as trade secrets and, if so, whether Holden misappropriated them through improper acquisition or unauthorized use.
3. Whether taking and exploiting the proprietary genetic characteristics could constitute conversion.
4. Whether proof that Pioneer’s proprietary genetic material appeared in Holden’s lines shifted to Holden the burden to show lawful acquisition or independent development.

## Decision

- The court held that the genetic characteristics of Pioneer’s proprietary inbred and hybrid seed lines constituted personal property.
- The court determined Pioneer’s confidential breeding information and genetic composition qualified as trade secrets under Iowa law.
- The court found Holden misappropriated those trade secrets and did not establish a lawful source or independent development once Pioneer demonstrated use of Pioneer-derived genetic material.
- The court concluded Holden’s misappropriation and exploitation of the protected genetic characteristics also supported liability for conversion.
- Pioneer prevailed on liability under both trade-secret and conversion theories.

## Legal Principles

- Proprietary genetic characteristics embodied in seed can constitute personal property subject to legal protection.
- Trade secrets may include technical information that provides a competitive advantage when it is not generally known and is subject to reasonable secrecy measures.
- Unauthorized acquisition or use of trade-secret information constitutes misappropriation.
- Misappropriation of trade-secret information may also constitute conversion where it reflects wrongful dominion over another’s property interest.
- When a plaintiff shows its proprietary genetic material is present in the defendant’s lines, the defendant may bear the burden to prove lawful acquisition or independent development.

## Conclusion

The court recognized proprietary seed genetics as protectable property and trade secrets and held that unauthorized use of those genetic characteristics supported liability for both trade-secret misappropriation and conversion.


Pioneer Hi-Bred Int’l, Inc. v. Holden Found. Seeds, Inc., No. 82-407-E, 1987 WL 341211 (S.D. Iowa 1987)