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2008 News Releases

Valent USA and Sumitomo Chemical File Complaints at ITC and in Courts Against Syngenta AG and Subsidiaries in a Dispute over Insecticide Patents

Syngenta's Actions Stifle Competition in Sale of Versatile Insecticide, Company Says

January 31, 2008

Walnut Creek, CA (January 31, 2008) — Valent U.S.A. Corporation and its parent company, Sumitomo Chemical Co. Ltd., announced today that they have filed complaints against Syngenta AG (NYSE:SYT) and a number of its subsidiaries in the International Trade Commission (ITC) and against one Syngenta subsidiary in the U.S. District Court for Western Wisconsin. These cases seek relief for infringement of Sumitomo Chemical's patent on an insecticide compound known as clothianidin. Valent and Sumitomo Chemical filed a separate complaint against Syngenta Crop Protection, Inc. in the U.S. District Court for Northern California, alleging that Syngenta's later use patent on clothianidin is invalid.

The three complaints involve patents covering the invention and use of clothianidin, an insecticide used to control insect pests on plants. The ITC and Wisconsin court complaints allege that Syngenta is violating Sumitomo Chemical's basic patent on clothianidin ("the '404 patent"). The Northern California case alleges that Syngenta is trying to prevent Valent and Sumitomo Chemical from selling their clothianidin insecticide for controlling insects on transgenic useful plants by threatening to enforce a separate clothianidin use patent ("the '469 patent") that was issued to Syngenta about 15 years after the '404 patent was issued. In that case, Valent and Sumitomo Chemical are asking the court to declare that patent invalid.

Bayer AG (NYSE:BAY) or one of its affiliates is also involved in the dispute because it has contractual relationships with Syngenta that have been invoked by Bayer to bar Valent and Sumitomo Chemical from selling clothianidin to control insect pests on transgenic useful plants, the lawsuit states. Bayer is not named in the lawsuits, but Sumitomo Chemical did undertake substantial negotiations with Bayer.
"It is both ironic and unfair that Syngenta and Bayer seek to prevent Valent and our parent company, Sumitomo Chemical, from fully marketing clothianidin products in the U.S. even though Sumitomo Chemical owns the basic patent on this versatile and effective insecticide," said Trevor Thorley, President and Chief Operating Officer of Valent.

Clothianidin is a later generation of neonicotinoid insecticides, an important class of powerful insecticides. Sumitomo Chemical, through a subsidiary, acquired the agricultural chemical business of Takeda Chemical Industries, Ltd. ("Takeda") including the '404 patent. "Acquisition of the '404 patent was the 'crown jewel' of the transaction because it is the landmark patent that claims the invention of the clothianidin compound," the Northern California court complaint states.

The ITC complaint and the companion civil complaint filed in the U.S. District Court for Western Wisconsin allege that Syngenta and a number of its subsidiaries are violating Sumitomo Chemical's '404 patent, which covers the invention of clothianidin and its use in controlling insect pests on plants in general. The ITC complaint seeks an exclusion order and a cease and desist order prohibiting the importation and sale by Syngenta and its subsidiaries of infringing products containing clothianidin and converting into clothianidin after intended use.

According to the complaint filed at the ITC, Syngenta and its subsidiaries violate Sumitomo Chemical's '404 patent in two ways. First, Syngenta sells products in the U.S. that contain clothianidin. Second, Syngenta's products contain a chemical compound called thiamethoxam, some of which is metabolized into clothianidin by the intended use of the products. According to U.S. law, selling a product that contains any amounts of a patented compound is an infringement of the patent, and selling a product containing a compound that metabolizes into a patented compound also constitutes a violation of the patent.

The Northern California case against Syngenta Crop Protection, Inc. asks the court to invalidate a separate patent (the '469 patent) that was issued to Syngenta in 2006. That patent "claims patent protection for controlling pests on transgenic useful plants with clothianidin, whereas the earlier '404 patent received patent protection for controlling insect pests on plants in general with clothianidin," the Northern California court complaint states.

"The '469 patent is both anticipated and obvious and therefore invalid in light of the prior art," the complaint continues. The complaint states that this prior art includes earlier patents and publications that describe the use of clothianidin for controlling insects on plants in general; recognition that clothianidin kills certain insects that are common pests for both transgenic and non-transgenic plants, so that it would be obvious to control the same insects with clothianidin on both types of plants; recognition that transgenic plants need to be treated with a broad spectrum insecticide, and clothianidin is a known broad spectrum insecticide; and the prior art use of imidacloprid, another neonicotinoid similar to clothianidin, on transgenic plants.

During lengthy negotiations with Syngenta and Bayer, Sumitomo Chemical "expressed its view that the '469 patent is invalid, but that it nonetheless wished to pursue a reasonable licensing agreement to protect its product launch plans and to avoid costly patent litigation," the complaint states. However, Sumitomo Chemical's "efforts to negotiate with both Bayer and Syngenta have been fruitless and futile," the complaint says.

About Valent U.S.A. Corporation

Valent U.S.A. Corporation markets and sells fungicides, herbicides, insecticides, bioinsecticides, insect growth regulators, nematicides, baits and plant growth regulators for the agricultural, horticultural, turf, ornamental, industrial vegetation management and professional pest control markets. Valent is a wholly owned subsidiary of Sumitomo Chemical Co., Ltd. Its headquarters are in Walnut Creek, CA. For more information about Valent, visit the company's web site at http://www.valent.com.

About Sumitomo Chemical Co. Ltd.

Sumitomo Chemical Co. Ltd. is a diversified global chemical company. It has six business sectors, including the Agricultural Chemicals Sector. The Agricultural Chemicals Sector is one of the Company's most globalized Sectors, with more than half of its sales coming from its overseas operations. The Sector is composed of the Crop Protection Division - Domestic, the Crop Protection Division - International, the Environmental Health Division, and the Animal Nutrition Division. The Crop Protection Divisions have been building a global sales network for such products as insecticides, fungicides, herbicides and plant growth regulators. They hold one of the largest shares of the market for agrochemicals in Japan and rank among the top ten players in the world. The Sector places a great emphasis on R&D as the source of its long-term competitiveness to launch a continuous stream of unique products with a view to capturing one of the two top positions in niche markets or particular regions. For more information visit the company's web site at   http://www.sumitomo-chem.co.jp/english/.

Note to Editors

The patent for Clothianidin is United States Patent 5,034,404, issued July 23, 1991. The disputed patent for controlling pests on transgenic useful plants with Clothianidin is United States Patent 7,105,469, issued September 12, 2006. The ITC complaint includes diagrams that depict the molecular structures of clothianidin and thiamethoxam.