Monsanto, Missouri co-op reach settlement on seed use

Sep 02, 2008 (St. Louis Post-Dispatch - McClatchy-Tribune News Service via COMTEX) -- MON | Quote | Chart | News | PowerRating -- Sep. 2--Monsanto Co. continued a string of victories over farmers it claimed saved seeds from the biotech giant to use in subsequent growing seasons -- a practice Monsanto has vigorously tried to squelch.

On Tuesday, Creve Coeur-based Monsanto announced the settlement of a two-year dispute involving alleged patent infringement by Pilot Grove Cooperative Elevator Inc. The case started in 2004 with an anonymous phone call to Monsanto and wound through federal court in St. Louis before being resolved.

Pilot Grove, based in a town of the same name about 100 miles east of Kansas City, acknowledged violating Monsanto's patented Roundup Ready seed technology and accepted responsibility for damages, according to Monsanto.

The Pilot Grove case sparked anger against what some farmers called Monsanto's "seed police," who ferret out cases of seed reuse and slap farmers with warnings or litigation. In Pilot Grove, Monsanto raised the stakes against what is called "seed piracy." Its lawsuit accused the farm co-op of aiding the practice by cleaning soybean seeds for use in future crops.

That violated both federal patent law and the contract between Monsanto and farmers, which prohibits farmers from stockpiling seeds or selling second-generation seeds, the company claimed.

"We pursue these cases for a number of important reasons," Scott Baucum, Monsanto's director of U.S. commercial trait stewardship, said in a statement. "While it's important to Monsanto to protect our investment, it is extremely important to the entire agricultural community that we are able to continue to reinvest in new and better seed technology."

Baucum said Monsanto invests $1 in research and development for every $10 a farmer spends on seed. He said Monsanto's pursuit of similar cases is motivated partly by a desire to "assure a level playing field" for farmers who abide by their contracts, and to wipe out "unfair advantage" for farmers who Monsanto believes violated their contracts with the company.

Under the terms of the settlement, Pilot Grove farmers group will give $275,000 to fund local agricultural scholarships, and will buy $1.1 million in Monsanto products over six years. The settlement with the farmers-owned organization tries to minimize the affects on farmers who did not violate laws or contracts.

"We are glad to have been able to resolve this issue professionally and in a way that demonstrates the commitment of both Monsanto and Pilot Grove Coop to agriculture and this community in a way that minimizes the impact to those farmer-members who were not involved," Earl Haller of Pilot Grove Coop said in a statement. "We are also glad to be able to offer seed with traits and to continue to do business with Monsanto."

As part of the settlement, Pilot Grove Coop will develop and adopt a stewardship policy to avoid future patent infringement and will work with a third-party organization to provide training for employees.

Monsanto said it sues over saved seed relatively rarely, and that only a small fraction of its 250,000 annual customers saves seed containing patented traits. In most of these situations, Monsanto is able to reach a settlement without filing suit, according to the company.

During the past 10 years the vast majority of seed patent infringement claims were settled without the need for any legal action, according to Monsanto. The company sued farmers for seed patent infringement approximately 125 times. Of those 125 lawsuits, all but eight were settled without trial. Monsanto won those eight trials.

Monsanto's struggle to keep control of the seeds it sells is a big-money endeavor. Last November, an analysis by the Center for Food Safety indicated that recorded judgments against farmers totalled $21.6 million as of October 26, 2007. But those court-recorded numbers missed more than $85 million and as much as $160 million in out-of-court seed piracy matters, according to the environmental advocacy group.

jmcwilliams@post-dispatch.com -- 314-340-8372

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