By Kevin E. Noonan —
Monsanto has been very successful in defending its Roundup Ready® franchise of genetically-engineered crop varieties. Monsanto sells patented seeds to a variety of crop plants, including soybeans, that are resistant to Monsanto’s Roundup® glyphosphate herbicide. These sales are conditioned by an agreement, termed the "Technology Agreement" that requires purchasers to pay a one-time license fee, and agreeing not to plant themselves, or supply to others, "saved" seeds, i.e., seeds produced from the originally purchased seeds. Just like with the hybrid seeds sold during the "green revolution" a generation ago, this system ensured that farmers purchase and license Roundup Ready® soybean seeds each planting season. Over the past 10 years, Monsanto has filed suit 125 times against individual farmers it accused of infringing its patents, including U.S. Patent Nos. 5,352,605 and No. 5,633,435 (RE39,247), that protect recombinant seed resistant to glyphosphate herbicide. Only eight of these lawsuits have gone to trial, while in the remainder, the accused infringer agreed to settlements that generally included an admission of liability.
Monsanto announced today the latest of these settlements, in a lawsuit against the farmer’s co-operative Pilot Grove Cooperative Elevator, Inc. (PGCE). This lawsuit was different from the others: instead of suing individual farmers, Monsanto sued the Elevator corporation, a farmers’ co-op, for aiding infringement by more than 100 Missouri farmers. In the settlement, PGCE acknowledged infringement and agreed to purchase $1.1 million in Monsanto seed products over the next six years. The co-operative also agreed to spend $275,000 to fund college scholarships for local members of the Future Farmers of America and 4H Clubs. Finally, the co-operative agreed to provide training to its employees and a stewardship program to avoid future infringement, as well as funding a third party organization to provide training for non-infringement.
Monsanto spokesman, Scott Baucum, Director of U.S. Commercial Trait Stewardship, said in a press release that:
We pursue these cases for a number of important reasons. First, we owe it to the hundreds of thousands of Monsanto farmer customers who are abiding by their contracts to assure a level playing field, and that some farmers don’t have an unfair advantage. Also, while it’s important to Monsanto to protect our investment, it is extremely important to the entire agricultural community that we are able to continue to reinvest in new and better seed technology. For every $10 a farmer spends on seed, Monsanto invests $1 in research and development.
Monsanto also endeavored to minimize any perception that it was Goliath to American farmer Davids. The company said in its press release that it is "relatively rare" that it sues farmers for saving seed, amounting to only a small fraction of its 250,000 customers/year of its soybean product. Separately, Monsanto spokeswoman Janice Person said that the farmers’ activities in saving recombinant seed for planting in subsequent years was akin to rental agreements for videos and DVDs, where the renter agrees not to copy movies for sale to third parties.
Monsanto has been awarded $21.6 million in its victorious lawsuits, and The Center for Food Safety estimates that Monsanto has received between $85 million and $160 million in settlements, which remain confidential. Monsanto has said that it has donated these monies to charity.
Despite all its successes, recent Supreme Court decisions, particularly Quanta Computer, Inc. v. LG Electronics, Inc., may indicate an Achilles’ heel to the company’s patenting strategy (see "Quanta Computer, Inc. v. LG Electronics, Inc. (2008)"). Settlements thus provide an ideal way for Monsanto to continue to protect its business without subjecting its patents, or patenting activities, to further court scrutiny. Settlements are also a way to reduce the amount of negative publicity (although probably doing little to assuage farmers’ resentments) over enforcing its patents; this is particularly true in light of the almost universal admission of infringement liability in these settlements, like the one announced today.
For additional information regarding other related topics, please see:
• "Monsanto Co. v. David (Fed. Cir. 2008)," February 6, 2008
• "Court Report," February 3, 2008
• "Court Report," January 28, 2008
• "Court Report," January 13, 2008
• "Court Report," January 7, 2008
• "Supreme Court Fails to Grant Certiorari in Monsanto Co. v. McFarling," January 7, 2008
• "Court Report," December 16, 2007
• "Court Report," November 18, 2007
• "Court Report," October 21, 2007
• "Court Report," July 1, 2007
• "Monsanto Co. v. McFarling (Fed. Cir. 2007)," June 4, 2007
• "Court Report," May 20, 2007
• "Court Report," May 7, 2007
• "Court Report," April 15, 2007
• "Court Report," March 11, 2007
• "Court Report," March 4, 2007
• "Court Report," February 28, 2007
Patent Docs 
Leave a reply to CpU Cancel reply