Court tells Monsanto it can't abuse patent law
2.Monsanto Loses EU Bid to Halt Argentinean Soy Imports
NOTE: See article online for multiple embedded links in item 1.
1.European Top Court Tells Monsanto It Can't Abuse Patent Law To Stop Import Of Argentinian Soymeal
Techdirt, July 7 2010
Seed giant Monsanto is a case study in how abusing patent laws can create serious anti-competitive results. Monsanto, of course, patented various genetically modified seeds, and then aggressively used patent laws around the world to make it so that it was effectively impossible to do much without having to pay Monsanto. The US Supreme Court made things even worse a few years back by saying that Monsanto's patents were infringed upon when farmers hung onto seeds from this year's crop to plant next year (a very common practice in farming). Last week, the US Supreme Court again helped out Monsanto by ruling (mostly) in its favor in another case concerning Monsanto seeds.
However, the company is starting to see a lot more problems with its aggressive stance around the world. This week, the European Court of Justice smacked down Monsanto over its attempt to bar the import of Argentinian soymeal. Apparently Monsanto had failed to get a patent on its famous Roundup Ready soybeans in Argentina (which now dominate the market), and dealt with it by blocking the import of such soybeans to other countries. Argentinian producers figured that if they couldn't sell soybeans directly, they could process it into soymeal and sell that. Monsanto claimed that because the soymeal came from soybeans that would be patented in Europe, the soymeal was also infringing. The court disagreed.
That the court disagreed wasn't a huge surprise. The court had more or less made that clear a few months ago. Because of that, Monsanto tried to duck an important ruling against it by settling the dispute and withdrawing the original patent complaint. The European Court seemed to decide it wasn't going to let Monsanto off that easily. Even with the complaint withdrawn, the Court still went ahead with the judgment, making the point clear.
Separately, some governments are now kicking off investigations into Monsanto's advertising statements about the very same Roundup Ready soybeans. Combine all of that and Monsanto also reported dreadful earnings, with a 45% profit drop.
Once again, we're seeing what happens when you live off of artificial monopolies. They can make you rich in the short term, but they're no trick to building sustainable businesses. What the government gives in the form of monopoly rights, it can also take away.
2.Monsanto Loses EU Bid to Halt Argentinean Soy Imports
Bloomberg, July 6
Monsanto Co., the world's biggest seed company, can't use a European patent on its Roundup Ready soybeans to block Argentinean soy meal imports, the European Union's highest court said.
The ruling by the European Court of Justice in Luxembourg follows Monsanto's decision last month to withdraw a Dutch suit that triggered the EU court case. Today's decision is binding across the 27 EU nations and can't be appealed.
"Monsanto cannot prohibit the marketing in the EU of soy meal containing, in a residual state, a DNA sequence," it patented, the EU court said today.
Monsanto said last week its decision to settle the Dutch dispute was prompted by a preliminary opinion in March. The EU court today agreed with the non-binding decision of its Advocate General Paolo Mengozzi that the European patent for the trait that makes soybeans resistant to the company's Roundup herbicide doesn’t extend to soy meal made from the patented seeds.
"This is another blow to Monsanto, which is the more painful as it probably thought it was off the hook after having settled the Dutch case," said Stijn Debaene, a partner at Field Fisher Waterhouse LLP in Brussels. "Monsanto cannot invoke its patent rights to enjoin someone from importing or using materials containing residues of Monsanto's patented genetic information."
43 Million Acres
Argentine growers planted about 43 million acres of soybeans containing Monsanto's Roundup Ready trait last year, making the country the company’s second-biggest soybean market after the U.S., according to a Monsanto report. About 95 percent of soybeans grown in Argentina contain Monsanto's Roundup Ready trait, Jim Tobin, the company's vice president of industry affairs said in July.
"The case itself has already been settled between the two parties and this move in no way affects the outcome," St. Louis-based Monsanto said in an e-mailed statement. "This ruling has only a limited meaning for the patent involved. Overall patent protection of Monsanto's Roundup Ready Soybean is not at issue."
Monsanto said Argentina is "the correct place for a resolution in these matters" and it will continue to work on a fair solution.
Shares of the company today fell $1.42, or 3 percent, to $45.12 in New York Stock Exchange trading after earlier touching a 52-week low of $44.76. The shares have fallen 45 percent so far this year.
A Dutch court on June 23 granted Monsanto’s request to withdraw its lawsuit against Cefetra Ltd. and Alfred C. Toepfer International. Toepfer is a unit of Archer Daniels Midland Co.
The decision "is exactly in line with the position as advocated by Cefetra," said John Allen, who represented Cefetra before the EU court. "It takes into account the circumstances of the case and still leaves room for a fair biotech patent protection in Europe."
During 2005 and 2006, Monsanto had shipments of soy meal from Argentina impounded in Amsterdam. Tests showed they contained some of the patented seed traits and Monsanto sued the importers for infringement. A court in The Hague sought the EU tribunal’s guidance on the case in 2008.
While Monsanto had argued the patented trait in the soybeans remains under its protection after the beans have been processed into meal, the importers argued the patent’s scope isn’t that wide under EU biotechnology rules.
The EU court case is C-428/08 Monsanto Technology LLC v. Cefetra BV, Cefetra Feed Service BV, Cefetra Futures BV and State of Argentina and Monsanto Technology LLC v. Vopak Agencies Rotterdam BV and Alfred C. Toepfer International GmbH.
-- With assistance from Andrew M. Harris in Chicago. Editors: Peter Chapman, Anthony Aarons