When is saving money not a good idea? One instance, according to Stuttgart, Ark., attorney C. D. “Duff” Nolan, Jr., is when it involves selling or planting seed for which someone has protection under patent law or the Plant Variety Protection Act.

“Science and money have created a world-class platform for development of germplasm that can be of great benefit to society,” he told members of the Mississippi Crop Improvement Association at their recent annual meeting.

But developers of those seeds expect to be paid royalties for their efforts, he says, and anyone who illegally sells or plants seed of patented or protected varieties is exposing himself to the possibility of extensive financial hurt in the courts.

Nolan, who's been involved in this type litigation since 1995, says there has been “a lot of confusion and bad advice” related to these seed issues, but the bottom line is, “If it ends up in court, it can be very costly.” And ignorance of the law won't wash with a judge, he cautions. “Intent is not required as a condition for liability under the Plant Variety Protection Act.” Those who sell “brown bag” seed are bucking legal precedent that allows the owner of the variety to be compensated for lost profits, expected profits amounting to treble damages, attorney fees, and all costs related to the action (“investigation fees alone can run into the thousands of dollars”).

Further, Nolan notes, the law allows the variety owner to receive damages on all seed offered for sale — not just whatever may have been purchased by investigators to cinch their legal case. It's not even necessary to prove that the unsold seed was the variety owner's product, he says. “The seller has to prove it wasn't, and that's tough. “Some think, ‘Well, if I get caught, I'll just pay the royalties that would've been due on what I sold.’ But that won't wash. Damages have to be paid on all the seed, whether sold or not.”

For a bag of Roundup Ready soybeans, damages have been established at $48 per bag. For a bag of wheat, $18. Multiply the number of bags by the allowable triple damages and it doesn't take a math wizard to see the potential for a big financial hit — even more so when the legal/investigative costs are added. That's not all: Under the Plant Variety Protection Act, the variety owner is given the right of injunction, “which means a whole warehouse could be locked down.”

A farmer who buys illegally-sold patented or protected seed isn't home-free either. About the only way to avoid legal entanglement is to feed the seed to livestock. “Any planting of the seed constitutes an illegal act, even if it's for wildlife food or erosion control purposes,” Nolan says.

And it doesn't have to be single variety seed. A bag of blended seed can also be a legal no-no if it contains one or more protected varieties. “All that does,” Nolan says, “is create more plaintiffs” who are apt to seek their day in court.


e-mail: hbrandon@primediabusiness.com.