Bloomberg News

Monsanto Wins Dismissal of Organic Growers’ Gene-Patent Suit

February 27, 2012

Monsanto Co. (MON), the world’s largest seed company, won the dismissal of a lawsuit by growers of organic crops seeking to have its patents for genetically altered seeds invalidated.

U.S. District Judge Naomi Reice Buchwald in Manhattan threw out the organic growers’ lawsuit in a ruling dated Feb. 24, saying it represented no controversy and that she had no jurisdiction over the suit.

Organic farmers, seed companies and food safety groups sued St. Louis-based Monsanto in March 2011 seeking court protection against possible lawsuits by the company for patent infringement if genetically modified crops were mistakenly found among their yields.

“There is no evidence that plaintiffs are infringing defendants’ patents, nor have plaintiffs suggested when, if ever, such infringement will occur,” Buchwald wrote in her opinion.

The growers, claiming that Monsanto “aggressively asserted” its patent claims against hundreds of U.S. farmers, sought a ruling from Buchwald that the patents for genetically engineered seeds are invalid because they are “injurious.”

They claimed transgenic seeds might contaminate their crops and that they don’t want to have to fight Monsanto patent claims should that occur. The company has pursued “baseless litigation to intimidate farmers and restrict competition with its transgenic seed,” according to the growers’ complaint.

‘Gravely Disappointing’

“Her decision to deny farmers the right to seek legal protection from one of the world’s foremost patent bullies is gravely disappointing,” Daniel Ravicher, a lawyer for the plaintiffs, said in an e-mail. “Her belief that farmers are acting unreasonable when they stop growing certain crops to avoid being sued by Monsanto for patent infringement should their crops become contaminated maligns the intelligence and integrity of those farmers.”

Ravicher said the plaintiffs will appeal.

“The ruling makes it clear that there was neither a history of behavior nor a reasonable likelihood that Monsanto would pursue patent infringement matters against farmers who have no interest in using the company’s patented seed products,” David Snively, Monsanto’s general counsel, said in a statement.

Monsanto makes transgenic seeds by introducing the genetic code of one species into the DNA of another. Its transgenic seed for soybeans, called Roundup Ready, prevents the plants from being killed by an herbicide that it also sells.

30 Million Acres

The company said in January that it expects to have its transgenic soybean product in 27 million to 30 million acres this fiscal year, an increase of more than 10 million acres from the previous year. Sales from seeds and genomics rose 13 percent to $8.58 billion in the fiscal year that ended in August, Monsanto reported in October.

The growers and seed companies contended that the transgenic seeds may damage the value of organic crops, trigger the evolution of herbicide-resistant superweeds and cost farmers their organic certification if traces of genetically modified crops are found in their yields. They also cited studies purportedly showing that transgenic seeds may harm human health.

Monsanto said its transgenics reduce costs, cut soil erosion and conserve soil moisture in dry climates. It also said it has committed not to take legal action against farmers whose crops may have “inadvertent traces” of transgenic seeds.

‘Win for Farmers’

“This decision is a win for all farmers as it underscores that agricultural practices such as ag biotechnology, organic and conventional systems do and will continue to coexist in the agricultural marketplace,” Snively said in the statement.

The lawsuit was brought by 36 agricultural and food safety organizations, 14 seed businesses and 33 farms and farmers across the U.S., according to an amended complaint filed in June. They include the Cornucopia Institute, Fedco Seeds Inc., Mendocino Organic Network and the Maine Organic Farmers and Gardeners Association.

Monsanto fell 68 cents to $78.84 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have risen 13 percent this year.

The case is Organic Seed Growers & Trade Association v. Monsanto Co., 11-02163, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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