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Monsanto May Lose Bid to Halt Argentinean Soy Imports

By Stephanie Bodoni | Bloomberg

March 9 — Monsanto Co., the world’s biggest seed company, can’t rely on a European patent for its Roundup Ready soybeans to block imports of Argentinean soy meal, an adviser to the European Union’s highest court said.

The European patent for the trait that makes soybeans resistant to some herbicides doesn’t extend to soy meal made from the patented seeds, Advocate General Paolo Mengozzi of the European Court of Justice said in a non-binding opinion today.

Argentina, the world’s third-biggest soybean exporter after Brazil and the U.S., is one of the few countries where Monsanto doesn’t hold a patent on the herbicide-resistant seeds. A ruling the European patent is enforceable may allow the company to block imports of Argentinean soy meal and related products.

“This is quite a blow to Monsanto,” said Stijn Debaene, a partner at Field Fisher Waterhouse LLP in Brussels who isn’t involved in the case. The advocate general “is quite severe.”

Monsanto said it was “disappointed” by today’s outcome and will wait for the court’s final decision. Rulings tend to follow within six months of an opinion.

“The only reason we have this case is because of a very arbitrary and controversial decision 15 years ago to throw out all existing patent applications in Argentina,” denying the company its local patent on Roundup Ready soybeans, Lee Quarles, a Monsanto spokesman, said in an e-mailed statement. “We have tried to find ways to be properly compensated for quite a while. This was one of those steps.”

Amsterdam harbor

During 2005 and 2006, St. Louis-based Monsanto had shipments of soy meal from Argentina impounded in Amsterdam harbor. Tests showed the products contained some of the patented seed traits and Monsanto sued the importers for infringement. A Dutch court hearing the dispute in 2008 sought the EU tribunal’s guidance.

While Monsanto argued the patented trait in the soybeans remains under its protection after the beans have been processed into soy meal, the importers argued the patent’s scope isn’t that wide under EU biotechnology rules.

“The protection for patents that cover genetic sequences is limited to situations where the genetic information is currently performing the functions described,” Mengozzi wrote. The Luxembourg-based EU court typically follows the advice.

Patent Limits

“There is a limit to how far Monsanto can stretch its patent protection,” said John J. Allen, a partner in the Amsterdam office of law firm NautaDutilh who represented the importers. The suit against the importers “is not the right way to settle Monsanto’s dispute with Argentina.”

Unlike in Argentina, Monsanto is compensated for the use of its patents in other countries, such as in Brazil, because of its patents or accords with farmers. In 2008, 68.5 percent of Argentine exports of soybeans and soy products went to the EU, according to data compiled by the Rosario Cereals Exchange.

“If the court decided that Monsanto can invoke its rights in the EU against soy meal originating from Argentina, nothing could stop it to then use its rights against soy meal coming from other countries,” said Mengozzi.

Ian Karet, an intellectual property lawyer with Linklaters in London who isn’t involved in the case said the opinion could be “quite important” for biotechnology patents because it “has the capacity to restrict significantly the scope of protection for genetic sequences.”

The 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.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

March 12, 2010 - Posted by | Economics

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