September 7, 2007

 

Monsanto loses legal battle for Argentinean soy royalties

 

 

It has been one busy week for Monsanto, the world's leader in the seed business.

 

While announcing it is spending US$28 million developing the second generation of its transgenic soy seeds, the company resolved a patent dispute with the Iowa State University and lost the battle to make Argentina pay royalties on its GM soy.

 

Monsanto had held up shipments of Argentine soymeal at some European ports in the past two years, filing lawsuits to enforce patents on its Roundup Ready gene technology in countries that buy Argentine soy products.

 

The problem was, Roundup Ready soy was never patented in Argentina but is widely grown in the South American country.

 

Monsanto's bid came literally to a screeching halt when a court in Madrid ruled that Sesostris, part of commodities group Louis Dreyfus, was exempt from the payments.

 

Monsanto said the results were expected as the trial judge had refused to admit critical evidence and vowed to appeal the ruling.

 

The Argentine government asked to participate in the patent lawsuits as a third party.

 

Monsanto filed suit in Spain and three other countries in the EU, causing importers to lose money due to delays.

 

Europe is the main market for Argentina's soymeal and Spain is the top importer, accounting for 15 percent of Argentine exports.

 

The company also announced investments of U$28 million within five years to launch the second generation of its transgenic soy seeds.

 

The company would develop a double genetic seed combining the Bt and RR2 Yield gens and set up three more research facilities in Brazil, bringing the total number to five.

 

The new soy seed generation is to be distributed from Brazil to the Mercosur countries, with obvious exception for Argentina and Uruguay, countries that did not reach and agreement on the royalties payment. Monsanto estimates all the Argentinean soy production use RR seeds, but only one in five are certified and the rest are illegal seeds.

 

On the other side of the Atlantic, the company resolved a patent dispute with Iowa State University related to its commercialization of low linolenic soy s.

 

The agreement follows a patent infringement lawsuit filed by the Iowa State University Research Foundation (ISURF) in May this year.

 

The lawsuit claimed that Monsanto had marketed its soy products after patents were awarded to its Research Foundation on low-linolenic acid content soy.

 

The biotech company claimed that it came to an agreement with Iowa over the use of the patent back in February and denied that it used patented soy technology from Iowa State University.

 

The firm and ISURF have now come to another more definitive agreement designed to pave the way for future collaboration.

 

Monsanto would receive a commercial license from ISURF for current and future low linolenic acid product lines developed by the university. The University will receive a research license for the use of one of the company's soy varieties.