EXCERPT: In a similar case a year ago, a Tennessee farmer opposed to Monsanto's genetic seed licensing practices was sentenced in a St. Louis federal court to eight months in prison for lying about a truckload of cotton seed he hid for a friend.
Kem Ralph's prison term for conspiracy to commit fraud was believed to be the first criminal prosecution linked to Monsanto's crackdown on farmers it claims have been violating agreements on using genetically modified seeds.
Ralph already has been ordered to pay Monsanto more than $1.7 million.
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Appeals court sets aside $780,000 Monsanto award in dispute with farmer
JIM SUHR
Associated Press, Wed, Apr. 28, 2004
ST. LOUIS - An appeals court has thrown out the $780,000 in damages a Mississippi farmer was ordered to pay Monsanto Co. in a seed-patent dispute, calling the agriculture biotechnology giant's formula for calculating such damages "unenforceable" under Missouri law.
Under the ruling from a three-judge federal court panel in Washington, a judge or jury in Missouri must decide what Homan McFarling actually owes the company for saving and replanting genetically altered seeds in violation of an agreement with Monsanto.
The 30-page ruling, issued April 9, affirmed that McFarling, a soybean grower, infringed on St. Louis-based Monsanto's patent and breached his contract with the company.
"This ruling once again confirms that Monsanto's market approach to selling patented seed and traits is legal and enforceable," the company said Wednesday. "We now turn our attention to the jury trial to determine patent-infringement damages independent of the contract provision."
McFarling attorney Jim Waide of Tupelo, Miss., was out of town this week and unreachable for comment, his office said.
In November 2002, the St. Louis-based U.S. District Court for Missouri's eastern district ruled that McFarling violated a Monsanto-held seed patent and ordered him to pay the company $780,000 in damages, given his admission that he saved seeds after harvesting crops grown from Monsanto's patented Roundup Ready soybean seed.
Such seeds have been genetically engineered to resist Monsanto's Roundup brand herbicide.
Monsanto bars farmers from saving or reusing the seeds once the crop is grown. Seed-saving has been a common agricultural practice, and some farmers bitterly oppose Monsanto's forbidding it in licensing agreements, calling the pricing excessive.
In agreeing in writing to the prohibition when he first bought the seeds from Monsanto, McFarling also agreed that if he breached the deal he would have to pay damages of 120 times the $6.50-per-bag technology fee the company gets from each bag of soybeans sold.
Monsanto, arguing its fees are justified so it can recoup costs and pay for future research, has said it has filed more than 70 lawsuits against farmers in recent years over the issue. Monsanto first sued McFarling in 2000.
McFarling admitted he saved 1,500 bushels of seed from his 1998 crop - enough to plant about 1,500 acres - and replanted it in 1999, then saved 3,075 bags of soybeans from his 1999 crop and replanted those the next year.
But in its ruling this month, the federal appeals court declared the 120 multiplier "not a reasonable estimate of the harm that would be anticipated to flow from breach of the prohibition prohibiting replanting seed." Waide had argued as much, questioning the constitutionality of a contract "asking for enormous damages for what was a very small actual loss."
In a similar case a year ago, a Tennessee farmer opposed to Monsanto's genetic seed licensing practices was sentenced in a St. Louis federal court to eight months in prison for lying about a truckload of cotton seed he hid for a friend.
Kem Ralph's prison term for conspiracy to commit fraud was believed to be the first criminal prosecution linked to Monsanto's crackdown on farmers it claims have been violating agreements on using genetically modified seeds.
Ralph already has been ordered to pay Monsanto more than $1.7 million.
ON THE NET Monsanto Co. http://www.monsanto.com
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