A European Court of Justice adviser has determined that Monsanto Co. cannot seek royalties from a company that imported from Argentina soy meal containing residues of Monsanto’s patented gene. Case C-428/08, Monsanto Tech. LLC v. Cefetra BV (Op. of Advocate Gen. Mengozzi, delivered March 9, 2010). Monsanto has no patent on its Roundup Ready® soy beans in Argentina. In 2005 and 2006, the company had shipments of soy meal from Argentina impounded in Amsterdam harbor, and testing showed that it contained some of the seed traits that Monsanto has patented in the European Union (EU). The company then sued the importers for infringement, and a Dutch court hearing the dispute sought guidance from the EU tribunal.

Disagreeing with Monsanto, which argued that its EU patent covers the DNA sequence, the adviser opined that under Directive 98/44, “a DNA sequence must be regarded as protected, even as a self-standing product, only where it performs the function for which it was patented.” After harvest, the code is no longer active in its purpose of resisting the application of glyphosate, the pesticide that Roundup Ready® seed is engineered to resist. Because “the patented DNA sequence does not perform any function within the soy meal,” the adviser determined that EU patent protection could not be extended to it, stating, “It seems to me that the interpretation proposed by Monsanto would ultimately lead the holder of a biotechnological patent to be granted too wide a range of protection. . . . [I]t is not possible to say for how long, or up to which stage of the food and derived product chain, traces of the original DNA of the genetically modified plant are still identifiable. Plainly, those sequences no longer perform any function, but their very presence means that an unspecified number of derivative products would come under the control of the person who had patented the DNA sequence of the plant.”

Monsanto reportedly expressed disappointment with the decision; a spokesperson indicated that the company would await the court’s final decision, expected within six months of the adviser’s opinion. According to the company, “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. We have tried to find ways to be properly compensated for quite a while. This was one of those steps.” See BusinessWeek, March 9, 2010; Courthouse News Service, March 11, 2010.