Bridges Trade BioResVolume 10Number 13 • 9th July 2010

European Court Rules against Monsanto on Soy Imports

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The European Court of Justice delivered a surprise ruling this week, finding that EU patent laws do not apply to biotech exports from countries that do not recognise the patent. The Luxembourg-based court ruled on 6 July that biotech giant Monsanto could not block shipments of Argentinean soy meal to the EU even though the soy was found to contain the company’s patented DNA sequence.

When Monsanto was unable to secure a patent on the DNA sequence for its “Roundup Ready” soy seeds in Argentina, it announced that it would no longer sell its seeds in that market. However, Argentinean farmers have continued to use older seeds recycled from previous crops, without any payments going to Monsanto. Roundup Ready seeds are resistant to glyphosate, an effective herbicide that can greatly increase yields of certain crops.

The row began in 2005-2006 when Monsanto had a shipment of Argentinean soy meal impounded in Amsterdam harbour. When laboratory tests found that the meal contained some of its patented traits, Monsanto sued the importers, Cefetra and Alfred C. Toepfer International, in a Dutch court.

The US-based seed manufacturer argued to the court that European companies should be banned from importing goods from countries that do not protect its intellectual property rights. In 2008, the Dutch court referred the matter to the Court of Justice.

When Monsanto received early notice that the court may rule against it, the company secured an out of court settlement with the two companies. However, despite an announcement from Monsanto that it had struck a deal, Europe’s top court issued a ruling against the biotech company. The Court said it had proceeded with the case because had not received official withdrawal notice.

“Monsanto cannot prohibit the marketing in the EU of soy meal containing, in a residual state, a DNA sequence patented by it,” reads a press release issued by the Court. “A European patent can only be relied on in relation to an invention which actually performs the function for which it is patented.”

A European Court of Justice ruling is binding on all of the EU’s 27 member states and it cannot be appealed.

As the third largest-exporter of soybeans and soybean products, after the US and Brazil, Argentina could profit greatly from the decision. Buenos Aires exported US$4.6 billion worth of soybeans in 2008. Observers say the decision could lead to increased exports to the EU from developing countries with weaker intellectual property protection.

More information

The European Court of Justice press release can be accessed here.

ICTSD Reporting; “Court Rules Monsanto Patent Can’t Halt Soymeal Imports,” DOW JONES, 6 July 2010; “Monsanto: court makes a meal of soya ruling,” IPKAT, 6 July 2010.

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