Monsanto seeks arbitration on tech licensing dispute
May 28, 2004 12:00 PM, By Forrest Laws Farm Press Editorial Staff
Monsanto Co. said it will seek the right to terminate its technology licensing agreements with Delta and Pine Land Co. because of “long-standing” unresolved business disputes with the Scott, Miss.-based D&PL.
Officials with St. Louis-based Monsanto said they have filed a request with the American Arbitration Association to end the agreements, which include the technology for Monsanto's Roundup Ready and Bollgard cotton traits.
D&PL executives, who said they had not seen a copy of the arbitration filing, said they do not believe D&PL has violated the terms of any of its agreements with Monsanto.
“It was our understanding that any disputes would be referred to a panel of senior executives if they could not be resolved,” said Tom Jagodinski, D&PL's president and CEO. “But I am confident that we have not breached any agreement and that Monsanto's filing is without merit.”
Although sources said it was too early to determine what impact, if any, the filing might have on D&PL's ability to deliver varieties with Roundup Ready and Bollgard traits, Monsanto said it would work to minimize potential seed supply disruptions.
“We have various options to do this, including terminating Delta and Pine Land's licensing agreements in a timeframe that we believe will minimize the effect in the marketplace,” said Kerry Preete, vice president of U.S. Crop Production for Monsanto.
Preete said Monsanto believes D&PL has violated its duties to and its contracts with Monsanto in a variety of ways including:
- Failing to calculate, collect and ensure that Monsanto was paid all royalty amounts due under the agreements;
- Breaching its fiduciary duty to Monsanto as the managing agent of D&M Partners by neglecting to properly collect and allocate the income of the D&M partnership;
- Misusing Monsanto's intellectual property by inappropriately providing Monsanto's technology to an unlicensed party.
Delta and Pine Land said the issues raised by Monsanto during the dispute resolution process “have been reviewed carefully and D&PL believes these claims are without merit.”
Monsanto and Delta and Pine Land entered into the licensing agreements for Monsanto's Roundup Ready and Bollgard technology in 1996. Delta and Pine Land's NuCotn 33B and NuCotn 35B were the first varieties to contain the transgenic traits.
“Monsanto remains committed to licensing our technology so that our value-added traits are available to U.S. cotton growers in a broad range of varieties,” Preete said in a statement released by Monsanto.
“This approach requires that the companies to whom we license our technologies be responsible business partners and stewards of the technology. If we believe one of our licensees is not taking their responsibilities seriously, we must act to protect our intellectual property, our other seed licensees, and our shareowners.”
Representatives of both companies have had in-depth negotiations on several disputes, some raised by D&PL and some by Monsanto, for the last two years, Delta and Pine said.
“The arbitration filing purportedly relates to some of the issues that remain unresolved,” D&PL said in a statement. “Pursuant to the terms of these licenses, matters in dispute must first be submitted to a panel of senior management to seek resolution. If the issues cannot be resolved by the panel, either party may submit the disputed issues to arbitration.”
Monsanto currently licenses its cotton trait technologies, including the Roundup Ready herbicide-tolerant trait and the Bollgard insect-protected cotton traits, through 10 seed companies, including Delta and Pine Land.
e-mail: flaws@primediabusiness.com
