NYTimes.com article: Licensing Seeds

[Ann Okerson <ann.okerson@yale.edu>]

Licensing of soybean seeds is a little off topic for this content
licensing list, but readers may be instructed by this disturbing piece in
today's Times.

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NYTimes.com Article: Saving Seeds Subjects Farmers to Suits Over Patent

Saving Seeds Subjects Farmers to Suits Over Patent

November 2, 2003
By ADAM LIPTAK

TUPELO, Miss., Oct. 30 - Homan McFarling has been farming here all his
life, growing mostly soybeans along with a little corn. After each
harvest, he puts some seed aside.

"Every farmer that ever farmed has saved some of his seed to plant again,"
he said.

In 1998, Mr. McFarling bought 1,000 bags of genetically altered soybean
seeds, and he did what he had always done. But the seeds, called Roundup
Ready, are patented. When Monsanto, which holds the patent, learned what
Mr. McFarling had sown, it sued him in federal court in St. Louis for
patent infringement and was awarded $780,000.

The company calls the planting of saved seed piracy, and it says it has
won millions of dollars from farmers in lawsuits and settlements in such
cases. Mr. McFarling's is the first to reach a federal appeals court,
which will consider how the law should reconcile patented food with a
practice as old as farming itself.

If the appeals court rules against him, said Mr. McFarling, 61, he will be
forced into bankruptcy and early retirement.

"It doesn't look right for them to have a patent on something that you can
grow yourself," he said.

Janice Armstrong, a Monsanto spokeswoman, said the company invested
hundreds of millions of dollars to develop the seed. "We need to protect
our intellectual property so that we can continue to develop the next wave
of products," she said.

Were farmers allowed to replant the seed, the company said in its appeals
court brief, "Monsanto would effectively, and rapidly, lose control of its
rights."

That is because one bag of the patented seed can produce about 36 bags of
seed for use in the next growing season. The number grows exponentially.
By the third season, the single bag of seed could generate almost 50,000
bags.

Ms. Armstrong said that there are about 300,000 soybean farmers in the
United States, and that Monsanto has disputes with only about 100 of them
a year. Most disputes are resolved quickly and informally, she said.

Farmers here said the company's efforts to investigate the replanting of
saved seeds have been intrusive, divisive and heavy-handed.

"They hired the whole city of Tupelo's night police force," said Mitchell
Scruggs, 54, who is a defendant in another saved-seed lawsuit. "They
bought a lot across the street from me for surveillance. They're spending
all this money on airplanes, helicopters, detectives, lawyers."

"They told a federal judge that it wasn't a monetary issue," Mr. Scruggs
said over the roar of three cotton gins at his farm here. "They wanted to
make an example of me. They want to destroy me to show others what could
happen to them."

In this respect, the seed lawsuits resemble the record industry's actions
against people who share music files on the Internet. There, too, the goal
is not primarily to recover money from particular defendants but to
educate the public, and perhaps to scare other potential offenders.

Ms. Armstrong acknowledges that Monsanto must walk a fine line.

"These people are our customers," she said, "and we do value them. But we
also have to protect our intellectual property rights."

Legal experts say Monsanto is likely to win its appeal, in part because
Mr. McFarling signed a standard contract when he bought the seed. He said
he did not read the contract at the time and it had never occurred to him,
until Monsanto contacted him with a $135,000 settlement offer, that he had
done anything unlawful. He had paid about $24,000 for 1,000 bags of seeds,
including a "technology fee" of $6.50 per bag.

The contract, which Monsanto calls a technology agreement, said buyers
could use the seed "only for a single season" and could not "save any seed
produced from this crop for replanting."

One judge, dissenting in an earlier appeal that upheld an injunction
against Mr. McFarling, wrote that the boilerplate contract did not give
Mr. McFarling a fighting chance.

"The terms printed on the reverse of the technology agreement are not
subject to negotiation and Monsanto's billions of dollars in assets far
exceed McFarling's alleged net worth of $75,000," wrote Judge Raymond C.
Clevenger III of the United States Court of Appeals for the Federal
Circuit. The same court is hearing Mr. McFarling's second appeal.

"Even an attorney reading the technology agreement might not understand
that it purports to subject one to patent liability in Missouri," where
Monsanto is based, Judge Clevenger continued. Someone versed in the
specialized decisions collected in law books might have understood it, he
wrote, "but we may presume that few feed stores stock the Federal Reporter
on their shelves."

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http://www.nytimes.com/2003/11/02/national/02SEED.html?ex=1068785507&ei=1&en
=dd5891cbe6e13a6a

Copyright 2003 The New York Times Company

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