Mar 28, 2010

Monsanto seeks legal right to claim royalty over Bt cotton seed

In lot many ways, Monsanto's application before the Andhra Pradesh High Court reminds me of the infamous broad patent on cotton granted to the US-based Agracetus in 1991, and revoked in October 1994. Patent 214436 filed in Nov 1999 by Monsanto, and granted in Feb 2008 by the Indian Patent Office, is a process patent for "methods for transforming plants to express Bacillus thuringiensis delta endotoxins." The patent is valid for 20 years from the date of filing, which means from Nov 1999 to Oct 2019.

Agracetus had claimed patent coverage for all transgenic plants regardless of the techniques and genes used for the transformation, and had filed for multiple patents in several of the major cotton producing countries -- India, China and Brazil. I remember some of us had raised this issue in India, and it was only after the direct intervention of the then Prime Minister Narasimha Rao that the Indian Council for Agricultural Research (ICAR) had challenged the patent.

According to The Times of India (Jan 25, 1995) a secret government paper had explained that the very objective of this patent was to deny the opportunity to biotechnologists in India to develop pest-resistant cotton plants by recombinant DNA techniques. And this was considered to be prejudicial to the public. I must also acknowledge that the then deputy director general of ICAR (who later became the director general) Dr Mangla Rai was actively associated with the challenge to the patent.

Interestingly, Agracetus was later acquired by Monsanto, which then went on to claim monopoly control over all transgenic soyabeans and cotton varieties. Monsanto had earlier opposed the Agracetus patent, but after acquiring Agracetus in 1996, it fought tooth and nail to preserve it. Eventually, after a 13-year legal battle initiated by ETC and Greenpeace, the European Patent Office turned it down.

Monsanto's legal case before the Andhra Pradesh High Court is essentially to stop the State government from fixing the seed price for its Bollgard-II transgenic cotton variety. The company argues that the State Government has no role to regulate the royalty that the company can get. The issue of price fixation had cropped up recently when the National Association of Seed Companies had made a plea for raising the seed price of Bollgard-II in view of the growing sales.

Incidentally, the technology fee (read royalty) as part of the seed price that farmers pay for Bt cotton (Bollgard-1) is the highest in India. In the US, royalty is around Rs 108 per acre whereas in China it is about Rs 38. In India, it was initially Rs 1200 per acre and has now come down to Rs 300 per acre.

But before we go into the price issue, I think it will be also useful to understand how wide is the patent claim. It is not only confined to cotton, but covers all Bt crops using the same technological process. Anyway, we will examine this later, but first let us hear what my colleague Dr G V Ramanjaneyulu from Hyderabad has to say:

Monsanto filed a case in AP High Court three days back to stop the State Government from taking any action to reduce trait value. It argued that State government has no role as it falls under the purview of the Central government and that cotton is back into Essential Commodities Act, so the new transgenic cotton regulation of act is not valid. Its argument is that the license agreement with seed companies is a private agreement and State government has no role to regulate the royalty. Among the papers submitted to the court, Monsanto also presented a paper, which shows that it acquired a process patent on transforming plants to express Bacillus thuringenesis delta endotoxins from Nov. 1999. The patent was granted in 2008. It may be noted that the Indian Patent Act 1970 was amended in 1999 to allow for process patents.

Though it has a process patent, the company is using it to control the entire Bt cotton market (which means making it work like a product patent).

As you may be aware, AP govt initiated actions again to reduce the trait fee (mind you not the cotton seed price) of the Bt cotton. This was to help some of the seed companies which want to have more share in the seed price. Monsanto is charging Rs 150 for 450 g  plus sales tax on Bollgard-1. The seed companies are paying Rs 150 for 450 g to the cotton seed producers, and keeping the remaining (from the seed price of Rs. 650 for 450 g) with them. Recently the National Association of Seed Companies made a request to AP government to allow them to increase seed price as the farmers are highly benefited with their Bollgard seeds (apparantly this is driven by vibha, pioneer etc who are allies of Monsanto) where as AP farmers unions (mostly driven by Nuziveedu seeds, pravardhan seeds etc) asked the State government to reduce trait fee.

Dr Ramanjaneyulu asks the more pertinent question: Whose 'food security' GM technology is going to ensure?

Meanwhile, do read the earlier blog post How Monsanto takes control over seed. The link is:

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