* Superior Tribunal says 15 bln reais at stake for Monsanto
* Eventual decision to apply nationally – court
* Producers in Rio Grande do Sul challenge patent laws
BRASILIA, June 13 (Reuters) – U.S. biotechnology company
Monsanto Co is defending its right in Brazil to apply
royalties to its patented Roundup Ready soybeans, a case that
could cost it $7 billion in reimbursement payouts if it loses.
Late on Tuesday, Brazil’s second highest court ruled that a
class-action case brought by soybean producer groups in the
southern grain state of Rio Grande do Sul against the company
would have national application once a decision was reached.
“The values involved could total 15 billion reais ($7.5
billion),” the Superior Tribunal of Justice said on its Web
site.
The case, raised late last year, challenges Monsanto’s
practice of extracting royalties from producers who replant
their harvested crop as seed, which originally came from sowing
Monsanto’s patented Roundup Ready soybean seeds.
The case hinges on two laws in Brazil: One recognizes
international patents; the other permits producers, especially
small ones, to use their crop as seed without paying the
original seed provider.
Brazil, the world’s No. 2 soybean producer, is one of
Monsanto’s fastest growing and most important markets after the
United States.
In 2005, with the passage of the Biotechnology Law, Brazil
legalized genetically modified crops. This made Monsanto, which
already occupied all of the black market in GMO seed at the
time, the leader in legal GMO soy.
“This is not the final decision on the class action against
the royalty collection system,” Monsanto’s local communications
manager, Geraldo Magella, said in an email, adding that the
collection system continues unchanged while the case is pending.
Under Monsanto’s royalty system in Brazil, a producer can
pay the royalty at the time of purchase of the Roundup Ready
seed from the distributor, for which he receives a receipt that
he must present at the time of delivery of the crop to prove he
paid for the technology.
Lacking that receipt, the royalty is extracted from the sale
price by the buyer when the signature genes of Roundup Ready are
found in testing. The buyers tend to be trading houses,
processors or cooperatives, who then pass on the royalty to
Monsanto.
If the STJ rules in favor of the producers, it would be a
big setback for Monsanto but not the final word. The company
could still appeal to the STF, or Supreme Court.
“Farmers accept paying for intellectual property when they
buy seeds legally. After that, when they have paid for them,
they don’t accept paying to replant the fruit of these
products,” said Neri Perin, judicial advisor for the Rio Grande
do Sul state branch of the Aprosoja soy producers’ association.
Chicago soybean futures have risen about 17 percent
since the start of the year, propelled by severe drought in
southern Brazil, in particular in Rio Grande do Sul. Brazil’s
2012/13 soy crop output dropped 13 percent from the record 75
million harvested from the previous crop.
