Monsanto Announces Latest Lawsuit Settlement over Roundup Ready® Soybean Seed

    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

Comments

[jessie cochrane]

Monsanto is only out to make as much money as he can. When farmers have to put out more and more money for seeds they have to pass it on to the consumer. It already costs to much for the average consumer just to make it from day to day. For him to go after farmers for doing what they have done for centuries is wrong. These lawsuits are utterly rediculous. The rich get richer. As always. Maybe they did break the agreement. Monsanto has probably broken laws or agreements also. He just hasn't been caught yet. It would serve him right if all of the farmers banned together and refused to buy any of his patented seeds or any thing that comes form him or his companies. I knew Loren David from years ago. He is a fabulous person. He is small town and we need more people like him.

[Baltazar]

Although it is true that powerful companies like Monsanto would always have an advantage over small individual farmers, farmers need to understand that Monsanto created their seed technology. On the other hand, Monsanto is part of a process moving away from biodiversity. I am not sure this is healthy given the climatic pressures and population growth. A movement is needed where farmers embrace biodiversity and organic agriculture moving towards a system where food is produced locally for local consumption. Such networks would ensure the survival of farms and be better for the environment.

[Kevin E. Noonan]

Dear Jessie:

One thing to keep in mind is that the opportunity for Monsanto to make money on these seeds is limited - the patents on them will expire in less than 20 years and then the seeds will be freely available. The contract Monsanto now uses to restrict replanting should be unavailable as protection.

While you have the right to prefer Loren David and other small farmers to Monsanto (it's easy to hate the corporate giant), if herbicides like Roundup increase yields and thus farm income, doesn't it make sense that Monsanto and other companies who make that profit possible should share in the increased profits? The difficulty non-farmers have in sympathizing with farmers found liable for infringement is that they knew the bargain they were making from the start. No one made them buy these seeds; they could have gone on the old-fashioned way and owe Monsanto nothing. Instead, they received the benefit of the technology and then reneged on their promise not to replant.

Thanks for the comment. Since you dislike Monsanto so much, you will enjoy tonight's post (they lose occassionally, too).

[Kevin E. Noonan]

Dear Baltazar:

You describe the utopian ideal, but the question is whether the yield would be high enough to sustain the global population. Of course, discouraging growth of that population might be a good idea, but I'm not comfortable doing that by starvation.

Interestingly, there was an article in the NY Times (I think) about urban farmers, people who grow on whatever space they have. I think it was a very interesting piece that showed that folks, even in a place like NYC, can impelement your goals.

Thanks for the comment.

[Baltazar]

Kevin,

The idea is not utopian and it is not even something I created. It has been said and written before. And even practiced before. I am not proposing population control by starvation and neither is such a crazy thing needed. The issue of yield becomes an issue only when a handful of farms produce for a global market. But when you produce for local markets, yield is less of an issue. Also, remember that we have a far better understanding of agriculture and biology than say 30 yrs ago, so we know how to improve yield with little or no herbicides or insecticides. Also, I don't think that monoculture is good at any level. I don't see organic agriculture and local farm markets as necessarily impossible or difficult. The hard work is to convince governments to do something.

As always, I enjoy your blog.

[Kevin E. Noonan]

Dear Baltazar:

I generally agree with your comments. I do know that my European friends say that what they dislike about America (on the food front) is that our vegetables and fruits are not as flavorful as the ones in Europe. I suspect this might be the result of monoculture and "factory farming," which I also suspect is less prevalent in Europe.

Glad you enjoy the blog. Thanks for the comments.

[CpU]

As a business, they'll do what ever it takes to protect their profit. And they have so diligently done so and allowed more breathing room with it also inducing a scare tactic. The newest news on the front about the Monsanto is that it has monopolized the soy bean industry.

When you say they had an option - this may be true in a sense. But internally - the heart of the matter, was Monsanto was making strides to dominate the market and FORCE farmers to purchase there products. With the patent laws, they create a 100% controllable market that allows them to control more then just the seeds.

I'm not saying that the farmers are right to break the patent laws. Every business needs it's protection. BUT, Monsanto needs to supply more options if they are going to be the dominant seed supplier.

Monsanto is wrong because they only do care about money - and not the well being of our earth and society. We should all be striving towards one goal, instead of standing at the top of the mountain and smacking down anyone who comes to the top.

My two cents to open up a old article.