Monsanto Suspends Soybean Royalty Collections in Brazil
17 October 2012 
Monsanto said on Wednesday it will temporarily suspend collection of royalties on first-generation Roundup Ready soybeans across Brazil, as it complies with a court ruling in the soybean-producing state of Mato Grosso in the wake of an intellectual property battle.
The St. Louis, Missouri-based company said it is continuing to pursue an appeal of a recent preliminary ruling from a state appellate court in Mato Grosso related to the company’s collection of royalties for Roundup Ready soybeans. The court’s preliminary ruling requires Monsanto to temporarily suspend royalty collections for the first-generation soybean product in Mato Grosso, pending the outcome of the appeals process.
The company’s ongoing appeal of the ruling ruling seeks to reestablish the royalty collections during the time that the trial is heard by the original Mato Grosso state court. Monsanto expects that the appellate courts will decide these preliminary matters over the next several weeks, and then the case will move to trial in the original state court.
Monsanto said that “in order to maintain operational consistency,” it will also temporarily suspend collections of royalties on first-generation Roundup Ready soybeans across the rest of Brazil.
Monsanto noted that it “remains confident in the merits of its case and looks forward to resolving this matter as soon as possible.”
“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,” Todd Rands, Monsanto’s Legal Director for Latin America said in a statement. “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.”
Monsanto’s first-generation Roundup Ready soybean products are protected by various intellectual property rights under Brazilian law. Brazilian law provides that the company’s intellectual property rights for Roundup Ready soybeans should continue through 2014, Monsanto said.
The company went on to say: “Monsanto shares the belief stated by the leaders of these grower groups that these technologies have brought great value to Brazil’s farmers and its economy. Both parties agree and recognize the value that intellectual property rights and the associated royalties are playing in stimulating new investments made by the industry. While both parties share these common interests, Monsanto and these grower leaders have different interpretations of the intellectual property rights held by the company on Roundup Ready soybeans, and Monsanto will be presenting the full merits of the case for the Brazilian courts’ consideration.”
CASE BACKGROUND
On Oct. 9, Monsanto reported that it would seek a full legal review following the ruling from the state appeals court in Mato Grosso. A local grower federation and grower unions had challenged the company’s intellectual property rights on first-generation Roundup Ready soybeans and Bollgard cotton and sought to temporarily suspend the collection of royalties or indemnities for these products.
Monsanto said that it would “request that the court reconsider its ruling should such reports be accurate, and that it would move to immediately ensure that the collections for these products continue through the duration of any legal process.”
Intellectual property rights for Roundup Ready soybeans are provided by Brazilian law through 2014, while its intellectual property rights for Bollgard cotton ended in 2011. As such, Monsanto said it has not charged farmers for its first-generation Bollgard cotton technology since 2011.
“Previous rulings in Brazil have recognized Monsanto’s intellectual property rights and established its ability to collect royalties for its products,” Rands said in a statement. “We look forward to presenting the full merits of the case to the court.”
Source: Monsanto; edited by Jackie Pucci, Managing Editor
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