Monsanto Loses in the Mato Grosso Courts / by Mark Langevin

After losing its case in the State of Mato Grosso courts, Monsanto has suspended efforts to collect royalty payments on both its Roundup Read (RR) soybean seeds and the Bollgard 1 cotton seed.  According to Rui Prado, President of the State Federation of Agricultural Producers (FAMATO), Monsanto did not explain why they are now suspending collections in the face of this last loss in the courtroom. While the state court’s decision only affects the company’s practices in the state of Mato Grosso, Monsanto announced that the suspension of royalties would be nation wide.

 

At the center of the dispute and Monsanto’s latest action is the validity of the patent for these two genetically modified seeds.  For Prado, the case and decision by Monsanto is important because it confirms that Monsanto’s patents had expired despite the company’s efforts to avoid disclosing this fact to buyers and farmers.  According to FAMATO, these patents had expired in 2010 leaving the seed varieties within public domain and not subject to royalty collections.  FAMATO and Aprosoja (the soy producers association) estimate that some $150 million (USD) were collected in royalties since 2010. Monsanto has argued that it had the right to collect royalty payments on these two seed varieties until 2014.  Despite Monsanto’s announcement that it would suspend collections, it is expected that the company will appeal the latest court decision.

 

According to Monsanto,

 

“We look forward to resolving this preliminary matter on appeal over the next several weeks. Previous rulings in Brazil have been clear and recognized Monsanto’s intellectual property rights as well as established its ability to collect royalties for its products,” said Todd Rands, Monsanto’s Legal Director for Latin America. “In the interim, we will continue to comply with the court’s initial ruling.  We will reserve our rights to reestablish royalty collections to the extent the courts allow us to do so in future rulings.”

 

Certainly Monsanto will continue to fight this state court’s ruling, but in some ways the agricultural producers have one an important battle in keeping large international agribusiness firms in check by questioning their business practices and confronting farmers’ growing reliance on these international companies.  At some point, Monsanto and other international firms will need to retool their business practices and renegotiate their prices in Brazil or risk market loss to much smaller Brazilian firms eager to compete against Monsanto one seed at a time.