Monsanto Suffers Key Court Loss on Brazil RR1 Royalties Brazil's top appeals court Thursday reiterated its ruling that Monsanto's patent on first-generation RoundUp Ready soybeans expired in September 2010 and the U.S. biotech giant had been charging royalties illegally for over two years.
The unanimous decision puts another dent in Monsanto's claim that it has the right to charge royalties in Brazil until 2014, in line with the rest of the world. Monsanto will appeal the ruling at Brazil's appeals court and also at the Supreme Court, the St. Louis-based company said in a statement, adding that it remained 'confident in its rights and the validity of its RR1 soybean patent until 2014.' But farmer representatives said the appeals court justices' decision leaves Monsanto's position in tatters. "The Supreme Appeals Court put a full stop to Monsanto's decision to insist in not following the law," said Ricardo Tomczyk, vice-president of the Mato Grosso Soybean and Corn Producers Association (APROSOJA-MT). Farmers and Monsanto have been fighting over the expiry of the RR1 patent for a number of years. Following a series of legal reverses, in February Monsanto suspended royalties on RR1 until a final legal decision was reached. APROSOJA is seeking that Monsanto repay royalty payments made between 2010 and 2013 at double the initial value. RoundUp Ready dominates the Brazilian soybean market with the gene present in approximately 85% of locally produced beans. Up until today, Monsanto charged RoundUp royalties at 2% on seeds or at $3.60 to $4.80 per acre on planted land. Monsanto is keen to close this case before it launches Intacta RR2 Pro soybeans in Brazil. In January, it signed a general agreement with Brazil's National Agricultural Confederation (CNA) and 10 state farm federations under which it offered to waive future royalties on RR1, if farmers waived the right to sue for past royalties. The deal caused controversy as farm groups objected to the contracts drawn up by Monsanto, based on the agreement, under which farmers not only agreed to waive rights to sue on RR1 royalties but also had to agree to respect patent rights on RR2, including the right to collect royalties post production. Monsanto subsequently dropped the RR2 clauses, but the latest decision makes the RR1 accord look less and less attractive. Monsanto sees huge potential for its new insect-resistant RR2 seeds. It hopes to launch them in Brazil for next season, which starts in September. But it agreed to roll out the seeds commercially only after China, Brazil's main soy client, approves the technology, which it has failed to do so far. Monsanto wants to charge five times more in royalties for RR2 compared with RR1, arguing that it offers much greater gains in yields and cost reductions. Earlier this year, a Monsanto representative announced at a farm show in southern Brazil that it would charge R$115 per hectare ($23.28 per acre) for the new seed. (AG) © Copyright 2013 DTN/The Progressive Farmer. All rights reserved. Monsanto Suffers Key Court Loss on Brazil RR1 Royalties Brazil's top appeals court Thursday reiterated its ruling that Monsanto's patent on first-generation RoundUp Ready soybeans expired in September 2010 and the U.S. biotech giant had been charging royalties illegally for over two years. The unanimous decision puts another dent in Monsanto's claim that it has the right to charge royalties in Brazil until 2014, in line with the rest of the world. Monsanto will appeal the ruling at Brazil's appeals court and also at the Supreme Court, the St. Louis-based company said in a statement, adding that it remained 'confident in its rights and the validity of its RR1 soybean patent until 2014.' But farmer representatives said the appeals court justices' decision leaves Monsanto's position in tatters. "The Supreme Appeals Court put a full stop to Monsanto's decision to insist in not following the law," said Ricardo Tomczyk, vice-president of the Mato Grosso Soybean and Corn Producers Association (APROSOJA-MT). Farmers and Monsanto have been fighting over the expiry of the RR1 patent for a number of years. Following a series of legal reverses, in February Monsanto suspended royalties on RR1 until a final legal decision was reached. APROSOJA is seeking that Monsanto repay royalty payments made between 2010 and 2013 at double the initial value. RoundUp Ready dominates the Brazilian soybean market with the gene present in approximately 85% of locally produced beans. Up until today, Monsanto charged RoundUp royalties at 2% on seeds or at $3.60 to $4.80 per acre on planted land. Monsanto is keen to close this case before it launches Intacta RR2 Pro soybeans in Brazil. In January, it signed a general agreement with Brazil's National Agricultural Confederation (CNA) and 10 state farm federations under which it offered to waive future royalties on RR1, if farmers waived the right to sue for past royalties. The deal caused controversy as farm groups objected to the contracts drawn up by Monsanto, based on the agreement, under which farmers not only agreed to waive rights to sue on RR1 royalties but also had to agree to respect patent rights on RR2, including the right to collect royalties post production. Monsanto subsequently dropped the RR2 clauses, but the latest decision makes the RR1 accord look less and less attractive. Monsanto sees huge potential for its new insect-resistant RR2 seeds. It hopes to launch them in Brazil for next season, which starts in September. But it agreed to roll out the seeds commercially only after China, Brazil's main soy client, approves the technology, which it has failed to do so far. Monsanto wants to charge five times more in royalties for RR2 compared with RR1, arguing that it offers much greater gains in yields and cost reductions. Earlier this year, a Monsanto representative announced at a farm show in southern Brazil that it would charge R$115 per hectare ($23.28 per acre) for the new seed. (AG) © Copyright 2013 DTN/The Progressive Farmer. All rights reserved.
