Biotech giant Monsanto late Tuesday announced it would suspend the collection of royalties on first-generation Roundup Ready soybeans (RR1) in Brazil until the country's highest court rules definitively on whether the company has the right to charge.
The decision comes after Brazil's top appeals court last week rejected a Monsanto request to correct the 2010 expiry date on the local RR1 patent, extending it to 2014 in line with the international patent.
There are concurrent cases on whether the local or international patent should hold sway here. Amid the legal uncertainty, Monsanto will wait for Brazil's Supreme Court to rule before charging again, the St. Louis-based company said in a statement.
In the meantime, it will continue to keep records of RR1 use for future royalties collection.
Following the appeal's court decision, farm leaders, led by those in Mato Grosso, are increasingly confident that the local patent, which expired on Aug. 31, 2010, will be enforced.
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In the meantime, farmers who want a definitive solution to the royalty question can sign an accord with Monsanto, under which the company agrees to waive royalties for the 2012-13 and 2013-14 crops. In return, farmers agree not to file suit to recover past RR1 royalties.
This is a revised version of the contract offered following a general agreement signed with Brazil's National Agricultural Confederation (CNA) and 10 state farm federations on Jan. 23.
In the new contract, Monsanto has dropped clauses under which farmers must also agree to respect patent rights, and post-production collection, on Intacta RR2 Pro (RR2) soybeans, which the world's No. 1 seed company hopes to introduce next season.
In doing so, Monsanto meets the demands of CNA, which complained last week that the general agreement on which the contract was based made no mention of RR2 and that the seed company had acted in bad faith by adding these clauses.
In place of the RR2 undertaking, the new contract contains general clauses that oblige farmers to recognize intellectual property rights on technology applied in agriculture, as well as a pledge to pay royalties on seeds produced on-farm.
CNA directors were not available to comment at the time of writing.
However, APROSOJA, a Mato Grosso farm association, in a statement recommended that growers don't sign the contract with Monsanto.
Monsanto briefly suspended RR1 royalty payments across Brazil last year after a Mato Grosso court passed an injunction prohibiting collection in the state, pending a final decision on the patents. However, at that time, Monsanto asked for royalties to be deposited with the court and reinstated collection outside Mato Grosso when, shortly after, the injunction was overturned. This time, farmers need make no deposits at court.
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.
Alastair Stewart can be reached at email@example.com
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