Scientist Settles Pioneer Suit Alleging Biotech Theft

Ex-employee Used Material At Cargill Job

June 10, 2000|By James P. Miller, Tribune Staff Writer.

A former Pioneer Hi-Bred International Inc. scientist settled allegations that he had provided secret biotech material to a Pioneer rival that hired him.

The agreement marks the latest chapter in a corporate-espionage case that has cost Cargill Inc.--the Pioneer competitor that hired researcher Thomas Ishler--more than $300 million.

As part of the agreement settling Pioneer's lawsuit, Ishler "admits he misappropriated Pioneer corn germplasm" and used the genetic material to develop seed at Cargill, according to Pioneer. Pioneer, based in Des Moines, is now a unit of DuPont Co.

Ishler could not be reached for comment. His attorney did not return phone calls.

The case of the purloined genetic material has been followed closely in the multibillion-dollar seed-corn industry. Wrangles over who developed which seed hybrid have long been a part of the business, but the financial stakes involved in such intellectual-property disputes are higher than they used to be. Increasingly, industry players are developing proprietary seed lines with the help of costly biotechnology techniques, rather than by more traditional cross-breeding.

At the center of the industry's biggest-ever trade-secrets fight is the little-known Ishler, who worked as a Pioneer corn-breeder for almost a quarter-century. He left the company in 1989, then worked at Cargill in a similar research role until 1996.

The scientist's job change was not news until 1998. That is when Pioneer, using sophisticated new "genetic fingerprinting" technology, determined that specific genetic traits which it had developed were present in Cargill seed lines.

Pioneer swiftly filed suit against Cargill and Ishler, the alleged rogue researcher. It also sued Monsanto Co., which had recently bought Cargill's overseas seed business for $1.4 billion.

Cargill at first denied any wrongdoing. But after an internal investigation, it confirmed that misappropriated genetic material had indeed been introduced into its plant-breeding program, "apparently through a former Pioneer employee."

For Cargill, which maintains it was unaware of the scientist's wrongdoing, the discovery was the start of a nightmare.

Monsanto settled Pioneer's legal claims against the former Cargill unit for an undisclosed amount, and Cargill then returned to Monsanto at least $200 million of the purchase price. A German venture that had agreed to buy Cargill's U.S. seed operations for $650 million called off the deal when the Pioneer suit cast a shadow over the value of the assets.

Once inserted into a line of seeds, the disputed genetic material cannot simply be weeded out. Cargill withdrew 11 seed lines it had been selling, and pulled the plug on many lines that contained the disputed genes but that were still in development.

Last month, Cargill agreed to pay $100 million to settle Pioneer's claims, saying it was honoring "our commitment to make things right" with the company. That payout covers damages, and gives Cargill ownership rights to some of the Pioneer genetic material that found its way into Cargill's seeds.

Cargill officials could not be reached for comment.