July 7, 2010

EU court rules that Monsanto cannot prohibit soymeal sale

Monsanto cannot prevent Argentine farmers from exporting to Europe soymeal with the company's patented traits, as ruled on Tuesday (Jul 6) by the top court in the EU.

The Court of Justice of the EU ruled that a European patent can only protect an invention that actually performs the function for which it is patented, in this case, the trait that makes soy resistant to Roundup glyphosate herbicide. However, the court said that function is no longer being performed in "dead material" – in this case, processed soymeal.

Monsanto has held a European patent for its Roundup Ready soy since 1996. The genetically modified soy is widely cultivated in Argentina, where there is no patent protection for it.

In 2004, Monsanto stopped selling its soy seeds in Argentina. However, Argentine farmers have continued saving the seeds from previous years' crops and using them without paying Monsanto.

Monsanto tested some Argentine shipments of soymeal to the Netherlands, where the tests revealed traces of the Roundup Ready trait.

Monsanto took its claim to court in The Hague, which in 2006 referred questions to the EU Court of Justice about whether the mere presence of the DNA sequence protected by a European patent is sufficient to constitute infringement when the soymeal is marketed in the EU.

The EU Court of Justice indicated in a preliminary ruling in March that it would decide against Monsanto. With the court's final ruling due Tuesday, last week Monsanto settled the case with the two companies that had imported the soymeal and withdrew its complaint, according to Monsanto's quarterly regulatory filing. Terms of the settlement were not disclosed. The importers were Hamburg, Germany-based Alfred C. Toepfer International and Rotterdam, Netherlands-based Cefetra BV.