On the very day the patent infringement trial was to begin, Monsanto Company announced they had reached a licensing agreement with the University of California resolving a dispute over bovine somatotropin or BST. Monsanto markets BST under the brand name Posilac, but the product was patented by UC back in 2004. BST, of course, is used to enhance milk production and efficiency of dairy operations.

Under the terms of the agreement, Monsanto has exclusive commercial rights to manufacture BST. The University, meanwhile, retains non-commercial rights for research and educational purposes. The University agreed to drop the lawsuit, and in exchange, Monsanto agreed to pay the University $100 million in royalties upfront, with an ongoing royalty of 15 cents per dose of Posilac sold through the expiration of the patent in 2023. The University will be paid a minimum $5 million in those royalties regardless of how many doses Monsanto sells. That means the company will have to sell over 33.3 million doses just to cross that threshold.

Monsanto’s Executive Vice President for North America Commercial Operations Carl Casale pointed out that “this agreement illustrates that we are willing to work jointly to resolve disputes, and it allows us to avoid the expense and inconvenience of protracted litigation.