## Facts

- Rhône-Poulenc Agro, S.A. (RPA) developed herbicide-resistant corn technology involving an optimized transit peptide (OTP) and obtained patent rights, including U.S. Patent No. 5,510,471 (later reissued as RE 36,449).
- RPA and DeKalb Genetics Corporation collaborated from 1991 to 1994 and executed a 1994 license granting DeKalb rights under RPA’s patented technology.
- In separate litigation, a jury found DeKalb procured the 1994 license by fraud, and the license was rescinded.
- Before the fraud finding and rescission, DeKalb granted Monsanto Company a nonexclusive sublicense to practice the patent.
- RPA sued Monsanto for patent infringement; Monsanto asserted the sublicense as a complete defense.

## Issues

1. Whether the bona fide purchaser-for-value defense in patent transactions is governed by federal law or state law.
2. Whether a nonexclusive patent sublicensee can retain sublicense rights after the upstream license is rescinded for fraud by invoking bona fide purchaser status.
3. Whether any federal bona fide purchaser doctrine extends beyond assignees or ownership-type transferees to nonexclusive licensees/sublicensees.

## Decision

- The Federal Circuit held the bona fide purchaser defense in this context is governed by federal law.
- The court held the defense was not available to Monsanto, a nonexclusive sublicensee, under the circumstances presented.
- The court vacated the district court’s summary judgment for Monsanto (entered on the theory that Monsanto had a valid license) and remanded for further proceedings.

## Legal Principles

- Federal law controls whether a party qualifies as a bona fide purchaser of patent rights, reflecting the federal character of patent ownership and transfers.
- A nonexclusive patent license is generally a contractual covenant not to sue and does not convey an ownership-type interest in the patent.
- Bona fide purchaser protection is tied to transfers of property interests in patents (such as assignments or equivalent ownership transfers) rather than nonexclusive licenses.
- When an upstream patent license is rescinded for fraud, a downstream nonexclusive sublicensee cannot automatically preserve its sublicense by claiming bona fide purchaser status.

## Conclusion

The Federal Circuit ruled that federal law governs bona fide purchaser status in patent transactions and that a nonexclusive sublicensee cannot use that doctrine to maintain sublicense rights after the upstream license has been rescinded for fraud, requiring further infringement proceedings on remand.


Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp., 284 F.3d 1323 (Fed. Cir. 2002)