by Patrick Bickley

Although it may be hard to feel bad for a $44 billion company dominating its industry with over $11 billion in sales last year, poor Monsanto has had a rough couple of months.  Monsanto has dominated the seed market through its sales and licensing of its genetically modified seeds.  In the 1970’s, Monsanto patented a new herbicide called Roundup that quickly killed weeds and any other plants prior to planting seeds.  In the 1990’s, Monsanto isolated a gene, called CPS4, from Roundup resistant bacteria found in the company’s waste ponds and placed the gene into its patented soybeans and corn.  These Roundup Ready seeds allowed farmers to continue using Roundup even after planting.

First, in September, Judge Jeffery S. White in the Northern District of California ruled that the U.S. Department of Agriculture failed to assess the environmental impact of genetically engineered sugar beets before approving the crop for farmers to use, according to The New York Times.  The next issue to be decided in the case is what remedy should be imposed.  One possible option is ban on planting the crops until the Department of Agriculture completes the environmental impact statement.  The ban is possible, even though the plants have already been widely adopted by farmers (one survey indicated that 95% of all sugar beets planted this year were genetically engineered), a ban on planting the crops until an environmental impact statement is complete is possible.  In 2007, a different judge in the Northern District of California ruled that genetically modified alfalfa could no longer be planted until the environmental impact statement was completed.  Today, the statement has still not been completed, and the modified alfalfa is, “with rare exceptions,” not being grown.

The Department of Agriculture did conduct an initial environmental assessment before approving the sugar beets for planting in 2005 which concluded that the beets would have no significant impact.  However, the federal judge pointed to concern that the pollen from the genetically-engineered beets might spread to other sugar beets or related crops, such as Swiss chard and table beets.  Monsanto and other seed producers were not allowed to intervene in the case except to file amicus briefs that will be considered when determining the remedy in the case.  The judge’s concern over pollen spreading to non-modified plants is a legitimate concern, although with 95% of this year’s sugar beet crop resulting from genetically modified beets already, there may be little non-modified stock left to contaminate.  Additionally, after several years of plantings, the damage to Swiss chard, table beets, and the remaining unmodified 5% of sugar beets may have already been done.

On top of its problems with sugar beets, Monsanto is now getting unwanted attention from the Departments of Agriculture and Justice over competition and antitrust concerns in the seed industry.  Earlier this year, in a licensing dispute, rival seed maker DuPont countersued Monsanto, seeking relief under antitrust laws.  The Justice Department began an examination of competition and antitrust concerns in the seed industry in August. Although Monsanto only controls about 30-35% of the corn and soybean markets, DuPont and other critics point to the broad licensing deals with over 200 other companies, including DuPont, meaning Monsanto’s patented genes are present in almost all of the seed planted each year.  However, as part of its licensing agreements, Monsanto places restrictions on what other genetic modifications can be present with the patented Roundup Ready gene.  Monsanto claims these restrictions are to protect its brand and customers from making sure the technology functions as promised, but critics point to the price of patented seeds doubling in the past decade, outpacing the growth of crop yields.

The public would be well served by a stringent investigation of any antitrust behavior by Monsanto.  Even though patent rights are often thought of as a government-sanctioned monopoly, albeit for a limited time, these rights are not absolute.  Patent holders are limited by the doctrine of misuse under 35 USC 271 (d).  Although the Justice Department did not file any antimonopoly cases under the previous administration, the Obama administration has declared itself more willing to take on dominant firms.  Because the Roundup Ready genes are so prevalent, Monsanto has been accused of using its position to keep competitors and their technologies out of the marketplace.

Whatever the results, the market acceptance of Monsanto’s products indicates that genetically engineered seeds are not going away any time soon.  However, by requiring realistic environmental impact assessments and compliance with antitrust laws, we can at least make sure these business giants play by the rules.