Monsanto Wins $7.7 Billion Lawsuit in Brazil – but Farmers’ Fight to Stop its ‘Amoral’ Royalty System Will Continue

By Karine Eliane Peschard, Anthropologist and Research Associate, Graduate Institute – Institut de hautes études internationales et du développement (IHEID) Originally published at The Conversation

A Brazilian appeals court has decided in favor of Monsanto, the global agribusiness conglomerate, in a landmark class-action lawsuit filed by Brazilian farmers’ unions.

The court’s nine justices unanimously ruled on Oct. 9 that farmers cannot save seeds for replanting if the seeds are harvested from Monsanto’s patented Roundup Ready soybeans, which are genetically engineered to withstand direct application of the company’s Roundup herbicide.

The Brazilian ruling aligns with similar decisions in the U.S. and Canada. Courts in all three countries determined that, as a product of genetic engineering, Roundup Ready soybeans are protected by domestic patent law.

In a public statement, Monsanto – which was acquired by Bayer in 2018 – said the decision will strengthen “agricultural innovation in Brazil.”

How strict patenting of seeds affects innovation, however, is a matter of debate. And the lawsuits challenging Monsanto’s aggressive pursuit of its patent rights raise a vexed legal issue: When intellectual property laws that protect companies conflict with the rights of farmers to plant their fields, who should win?

Monsanto ‘Owns Everything’

The Brazilian lawsuit is a sign of growing uneasiness with the control Monsanto has over farmers, my research on biotechnology and seeds finds.

Founded as a chemical manufacturer in 1901, Monsanto has invested heavily in agricultural biotechnology to become the world’s largest seller of seeds. Its biotech seeds have proved attractive to farmers because they simplify farm management. Monsanto says its genetically modified seeds also increase crop yields, and thus farmer income – but evidence on this subject is not probative.

Monsanto’s genetically modified corn seeds, sold under the brand DeKalb, are widely used in the U.S AP Photo/Seth Perlman

In the United States and Canada, Monsanto requires buyers of its genetically modified seeds to sign extensive licensing contracts that prevent them from saving seeds. North American farmers who violate those agreements have been sued for patent infringement and compelled to pay tens of thousands of dollars in damages.

In Brazil, Monsanto charges 2% royalties on the sale of its patented soybeans, a conventional industry practice. More unusually, the company charges an additional royalty – 3% of farmers’ sales – when soybeans are grown from saved Roundup Ready seeds.

Soybeans are Brazil’s biggest export. The royalties in dispute in the class action, which is likely to be appealed to the Brazilian Supreme Court, are estimated at US$7.7 billion.

“I can’t stand it anymore – seeing those Monsanto people showing up at the grain elevator and behaving as if they own everything,” one grain cooperative manager told the Brazilian Congress during a special commission on agriculture I attended in December 2017.

‘Amoral’ Royalty Collection

The Brazilian appeals court’s Oct. 9 decision reverses a past ruling establishing the rights of small farmers in Brazil.

In their original petition, farmers’ unions in 2009 asserted that Monsanto’s royalty collection system is arbitrary, illegal and abusive. They argued that it extends Monsanto’s intellectual property rights to their own production and violates their right to freely save seeds for replanting, as guaranteed under Brazil’s Plant Variety Protection Act.

In April 2012, a civil court agreed with the farmers, affirming their rights to save seeds and sell their harvests as food or raw material without paying royalties.

Monsanto got this ruling overturned on appeal. The Brazilian farmers’ unions then appealed that decision, leading to the Oct. 9 ruling against them.

“Monsanto is amoral,” Luiz Fernando Benincá, a soybean producer and litigant in the class action suit told me in January 2017. “It will do anything for profits.”

Controversial Products and Practices

Monsanto is accustomed to litigation. Several of its other products – such as Agent Orange, the synthetic chemicals PCBs and, more recently, the glyphosate-based herbicide Roundup – have been embroiled in legal controversies.

For decades, the St. Louis-based company, valued at $63 billion last year, used its deep pockets and large teams of lawyers to intimidate farmers and defeat opponents in courts.

Due to concerns about its links with cancer, the Monsanto herbicide Roundup has been removed from many stores in the U.S. and Europe. Jeepers Media/Flickr, CC BY

From 1997 to 2018 Monsanto won every single intellectual property lawsuit that went to trial in the U.S. and Canada.

It has had less success abroad. Courts in Argentina, the European Union and other countries with stronger farmers’ rights have checked the company’s aggressive use of royalties to profit off the byproducts of patented products.

Judges in these cases confront a tricky legal issue.

In theory, a genetically engineered DNA sequence like the one that confers herbicide resistance to Monsanto’s Roundup Ready soybeans can be protected under patent law. Yet the plant variety in which the genetic sequence is introduced may also be legally protected, as it is under Brazil’s Plant Variety Protection Act.

In practice, however, it is virtually impossible to separate genetically engineered DNA sequences from the rest of the physical plant. So the two laws – one recognizing the rights of farmers to save seeds for replanting in their fields, the other protecting Monsanto’s intellectual property – conflict with each other.

Defend Farmers or Protect Corporations?

Faced with this conundrum, the Canadian and U.S. Supreme Courts have ruled that the exclusive rights of a patent holder over plant genetic sequences extend to the plants themselves, thereby allowing companies like Monsanto to prohibit farmers from saving seeds.

Brazil has effectively agreed with this interpretation – for now. The lawyer for the Brazilian farmers unions, Néri Perin, says the ruling “disregards Brazil’s international commitment to guarantee farmers’ rights.”

But more troubles await Bayer-Monsanto.

In a separate lawsuit, Brazilian soybean farmers are challenging the validity of Monsanto’s patent on second-generation Roundup Ready soybeans. In India, the courts have been asked to rule on the validity of Monsanto’s patent for a cotton variety genetically engineered to be insect resistant.

Monsanto has long had the upper hand over the farmers who use its products. But the momentum may be shifting.

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  1. John A

    Seeds can lie dormant for years. What if farmers save seeds for 20 years, the normal length of time a patent lasts, and then plant them? The seeds would surely be out of patent and therefore no longer infringing copyright and free to use? And how could Monsanto prove a seed was only 19 years old or younger?

    1. divadab

      Good catch! The germination rate might be 80% instead of 95%, but still viable.

      Hard to say how this would work in the real world, however, given Monsanto’s competence and focus.

      1. drumlin woodchuckles

        Well, the seeds in question would have to be video-documented in the act of being sealed up in long-storage containers, with undisputable time-stamps and everything on the video. The containers would have to be legally sealed, notarized, affidavitized, or whatever other proof is needed of their having been sealed into those containers at the particular date and time verified.

        Then they would have to be watched by unblinking security cameras 24/7 for the twenty years in deep frozen storage. When the twenty years had passed, they could be retrieved on camera, planted and grown on camera, and the seeds from the plants from those seeds would be aged out of the patent time-span. They would be “jailbroken”.

        Of course, 20 years from now, the whole world might have come to its better senses on GMO, and those seeds might find themselves to be unwanted orphans, hated and despised in a world which has decided it deserves better than GMO.

    2. Acacia

      Couldn’t Monsanto prove it by fiddling parts of the seed DNA each year to “watermark” it and then doing some DNA analysis to “date” the seed?

      Basically, it’s a lost cause as soon as the law recognizes that plants can be patented. The GMO DMA spreads in the wild via pollens, contaminating non-GMO plants, but allowing Monsanto to claim that even farmers who never bought their shit seeds in the first place are infringing on their patents.

      1. drumlin woodchuckles

        Infecting all the other farmers’ seeds all around their genetic pollution-emitting crops and sending tresspassers around to all those other farms to take samples and find one patented helix in a million “free and unpantented” helixes . . . . so as to accuse those farmers of unauthorized GMO planting and threaten them with lawsuits designed to terrorise these farmers into paying extorted settlements was also part of Monsanto’s bussiness model.

        Only Schmeiser wouldn’t pay the extortion.

        I wonder why Monsanto was never prosecuted for this under the RICO act.

  2. divadab

    I have a simple solution – mandate organic farming everywhere. The USA still has a Command agriculture system, a relic of the New Deal and WW2 that has been taken over by the corporates like Monsanto for their own benefit. If everyone is held to the same rule, everyone will get in line to be the best. Monsanto, for example, is a highly competent organization staffed with intelligent, hard-working people. What if they were forced to be an agent of sustainability instead of an agent of chemical death and exploitation of the biosphere?

    Bernie need to take this up but I’m not sure it registers in his worldview.

    1. Acacia

      Contradicts the business model. They will use all of their lobbyist muscle to fight the organic farming mandate tooth and nail.

      Probably the only solution is to litigate them to the point that stock tanks, shareholders jump ship on billions in damages, the company goes bankrupt, and the whole business model becomes seen for what it really is: a flaming slag heap of bottomless liability.

      1. tegnost

        They will use all of their lobbyist muscle to change the definition of organic into something they can easily profit from. My own solution has been to eat very little corn and no processed foods so I’m not exposed to soybeans.

        1. divadab

          Well yes avoid chemical food wherever possible – organic all the way.

          But I don;t subscribe to your and Acacia’s pessimism – if what you say were correct, then USDA organic would be a sham – which it is not. USDA organic standards are not as good as the CCOF’s (California Certified Organic Farmers), for example, but it’s still pretty good.

          1. Acacia

            I’m not aruging those standards are a sham. I’m saying that Monsanto et alia would attempt to out-lawyer any attempt to mandate organic farming everywhere (your original suggestion). If they failed at that, I agree with @tegnost that they would go after the standard itself, and try to get some loopholes added or otherwise debase the standard. To be clear: currently, these standards are not bogus, but they will likely come under attack when powerful business interests are at stake. I submit this is not pessimism but rather realism about what to expect, and proponents of organic should prepare for a nasty fight.

            Also, if you plant a field of GMO corn next to a field of organic corn, the GMO pollen will spread and contaminate the corn in the adjacent field. (Cf. Monsanto Canada Inc v Schmeiser.) Can we say it is still “organic” if it cross-pollinates with a GMO product? Under the USDA standard, the answer might be “yes”, but a genome test might indicate otherwise.

    2. drumlin woodchuckles

      Did the agricultural laws and rules system ever contain the power to mandate methods like this? I have never heard of such a power.

  3. Thomas P

    One unfortunate effect of these patents is that resources for agriculture research is focused on technologies that can be patented, like GMO, rather that the methods that may be most promising like mixing crops, agroforestry, crop rotations etc.

  4. Carolinian

    Perhaps this is what Michael Hudson would call rent seeking gone wild. The ability to patent food just shows how the concept of intellectual “property” has been distorted. The same distortions apply to medicine and other fields where the profit motive reigns despite the fact that patent laws are supposedly justified as advancing the general social welfare and not as tollbooths for easy riches. As the article says Roundup is a highly controversial product so the Monsanto scheme merely makes life easier for some farmers rather than increasing yields.

  5. Felix_47

    Why do farmers anywhere use Monsanto products? Why can’t they use non Monsanto seeds and refuse to use Round Up? I always thought that the Round Up idea was genius. The idea reflected the triumph of the human mind over nature. One needs much less ploughing, generates much less CO2 from burning fuel, and uses a lot less other herbicides that are more toxic to nature. If Round Up is so bad it should be an easy marketing matter to sell Round Up free Cheerios or Cocoa Puffs and I eat Cheerios. And if all these farmers, activists and lawyers are so smart why can’t they come up with an alternative that is even better? I haven’t doubled down on Bayer stock not because I believe Roundup causes human cancer but because the cancer is not in the human body but it is in the rent seekers running the judiciary and the country…..the lawyers. Any competent scientific analysis shows Roundup is safe and it was a real genius idea. If the farmers don’t want to pay the 3% they can revert to the ploughing and other weed control methods they used in the past and take a greater than 3% drop in yield.

    1. Wombat

      Could you provide an example of “competent scientific analysis” that can measure that roundup is “a real genius idea”? How does one measure a genius idea? Seems quite subjective, not unlike this post.

    2. Thomas P

      Just like DDT glyphosate* has its uses, like clearing up invasive plants that can’t be killed any other way with a reasonable effort. Unfortunately, just as with DDT, its being overused, and as a result resistance is spreading to other plants. Not that Monsanto cares, they want to get maximum profit while the patent lasts.

      * The active chemical in Roundup, but you have to look at other ingredients in the mix too, one is acutely poisonous to amphibians.

    3. drumlin woodchuckles

      The sector of farmers known as “organic” are doing that very thing. They don’t advertise as being ” Roundup-Free” specifically. They advertise themselves as being ” synthetic chemotoxin free” in general, and that of course includes Roundup.

      But of course there will be people who respect the Genius of Monsanto and the Genius of Roundup. There just has to be a way for such people to show their support for Monsanto and Roundup. The only way I can think of is for those people to figure out which foods have the highest levels of Roundup in them, and eat those foods.

  6. Susan the Other

    I think it is science gone deaf, dumb and blind. The overzealous profiteers under Bill Gates’ venture with Monsanto around the world have staked a tenuous claim. Genetics modifies itself all the time. Monsanto seeds cannot claim to own the “idea” of genetic change. Or even that one of their genetic tweaks is anything but a blip. Change is everywhere, all the time. So to patent some temporary genetic condition is absurd. Not only do Monsanto’s “changes” only last for the first year, and then need to be tweaked because nature is relative – it changes too – nature itself is constantly making adjustments regardless of Monsanto’s crap. So where do you draw the line on genetic manipulation? And the whole idea of patents for temporary-at-best genetic manipulation is absurd – totally absurd. Just another racket. The courts are stupid or corrupt.

    1. Acacia

      They are not claiming to own the “idea” of genetic manipulation. They are claiming to own specific engineering methods (i.e., splicing bacteria or fish genes into specific plant DNA to achieve certain effects). Once DNA is accepted as “code”, it opens the door to engineering that code and then claiming patents on the engineering.

      It may be absurd, but this is the face of current IP law and it will remain law until some other organization with deeper pockets can out-lawyer the corporations that have bought the law. Courts are about legality, not intelligence. Companies like Monsanto have spent many millions of dollars on legal fees for this, and they will spend millions more at the drop of a hat to protect their investments to date.

  7. lyman alpha blob

    Perhaps governments could modify the HVAC systems at Monsanto and start charging royalties on the breathable air that flows through Monsanto’s office buildings around the world in an amount exactly equal to the royalties collected from seed savers. If they don’t like it, they can see how they like breathing vacuum.

  8. flora

    Brazillian farmers are experiencing the iron grip of Monsanto, a dangerous monopoly in food seeds, imo.

    US farmers – family farm farmers ,not agri biz – have been under siege by Monsanto for a long time.

    Driving seed cleaners out of business eliminates a service necessary for farmers trying save seeds to plant crops that aren’t patented by Monsanto.

    Reducing biodiversity, creating monocrops carries risks beyond corporate profits.

    A 10 minute utube vid about the above.

  9. Felix_47

    1. Wombat, I don’t have space for the references but they are all over the internet. Roundup made it possible to avoid ploughing and turning the soil for weed control. That saves farmers immense amounts of time and fuel and decreases CO2 emissions.
    2. Roundup has enabled the world to weather losing a very toxic herbicide that killed many rather rapidly….and is still being used in third world countries such as Thailand and India…..Paraquat. The number of lives saved since the banning of Paraquat is substantial and several orders of magnitude greater than the number of cancer deaths attributed (not proven) to Roundup
    3. You don’t have to look far to see how weak the research connecting Roundup with non Hodgkins lymphoma is. It is largely statistical noise. It is not cigarettes and lung cancer or Paraquat and liver failure or sun exposure and melanoma. And the big missing link is a mechanism of action which is required to establish real medical causation and it is not because no one has looked for one. Roundup kills plants by interfering with metabolic mechanisms unique to plants, not animals. The big mechanism is the plaintiff lawyer community, a group well known for conflating correlation with causation to convert hot air into cash.
    4. Used properly, as Thomas points out above, even DDT is safe to use and it is still in use indoors where birds and other animals will not be exposed. More lives have been saved with DDT than all of the plaintiff lawyer cases in the US have ever saved.
    5. To me a genius idea is one that comes up with a unique way to save energy, time and human effort yet increase productivity and benefit to humanity. Among those I would include DDT, penicillin, nitrate fertilizer, semi conductors (which have given us everything from computers to the internet to solar panels), the internal combustion engine etc. And none of these don’t have downsides.
    6. So back to the original question. If Monsanto’s royalty demands are so onerous why are the plaintiffs using Roundup? Why are then not inventing something better and cheaper and more efficient. And don’t tell me all Brazilian farmers are all starving peasants. We know that they are big agribusinesses as well. And if they are continuing to use Roundup resistant seeds I guess they were trying to make more money the good old American way……with litigation. They thought they could get it for free. Why invent something when you can be a patent troll and make as much money? And limiting patent lifetimes is something I would like to see. Monsanto is milking it but no more than Mickey Mouse, for example. So Susan the Other is right about the patents in that the length of them is outrageous but some sort of patent system would make sense.

    1. drumlin woodchuckles

      Farmer Gabe Brown of North Dakota is saving CO2 emissions and equalling his GMO-neighbors’ yields without using any Monsanto or roundup at all.

      Cultural inertia and pride will prevent most farmers from ever even considering any of his methods. But some farmers will and some already are. Those are the ones who will be growing class food for the classes while the toxichemical GMO farmers will keep growing mass food for the masses.

  10. meeps

    It should never have become legal to patent genes for the purpose of ownership. It’s the slipperiest of all possible slopes, making slaves not only of farmers but of life itself.

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