Brazilian court orders suspension of Bayer's royalty collections

Date:12-26-2024

A state court in Mato Grosso, Brazil, has ordered Bayer to suspend its royalty collections from soybean farmers for using Intacta RR2 Pro technology. 

The ruling favors a class action lawsuit filed by the Mato Grosso Soybean and Corn Producers Association (Aprosoja-MT).

Judge Célia Regina Vidotti of the Specialized Court for Public Actions ruled that Bayer could no longer collect royalties after the genetically modified seed patent entered the public domain. The terms of the two patents were adjusted to December 12, 2020, and March 3, 2018.

This means farmers should receive reimbursement for amounts charged after these dates, totaling an estimated BRL10 billion (Brazilian Reais), according to Aprosoja-MT. The repayment must include inflation adjustment based on the National Consumer Price Index (INPC), plus 1% monthly interest from the citation date.

Aprosoja-MT's president, Lucas Costa Beber, called the victory a reinforcement of the association's role in protecting farmers. "This victory demonstrates our association's fundamental role in defending farmers' rights, correcting a practice that directly harmed the sector and compromised producers' profitability, especially small and medium-sized operations," he stated.

The association also argued that the decision reaffirmed the social function of intellectual property. They maintained that technologies with expired patents should be accessible to the public, benefiting the entire production chain.

Although favorable, the ruling was issued in the first instance. Bayer can still appeal. Aprosoja-MT's attorney, Sidney Pereira de Souza Jr., believes the result will stand. "The judge based her ruling on a Supreme Federal Court decision, so we believe it will be upheld," he said.

In March of this year, Brazil's Supreme Federal Court recognized farmers' right to reimbursement. Following that decision, the court returned the case to Mato Grosso state jurisdiction, Brazil's largest soybean producer.

In an official statement, Bayer said it learned of the decision through the press and will appeal. "There are no changes to the pillars of our business model, including the testing and collection system at Points of Receipt (PODs)," the company stated. 

They emphasized that "Intacta RR2 Pro^® technology is protected by intellectual property rights, including various patents granted and valid in Brazil and abroad."

The case may see further developments in higher courts. Meanwhile, producers await the state court-ordered reimbursement. Aprosoja-MT recently challenged the collection practices before CADE (Administrative Council for Economic Defense), arguing that royalty collections restricted competition and economically harmed soybean farmers.

Bayer's full statement:

Bayer was informed through the press about a decision reportedly issued by the Specialized Court for Collective Actions of Mato Grosso regarding the process to correct the validity period of some Intacta RR2 PRO^® soybean technology patents.

Although the decision has not been officially published, the company is closely monitoring the case to understand potential implications.

Intacta RR2 PRO^® technology is protected by intellectual property rights, including various patents granted and valid in Brazil and abroad. Bayer trusts in the soundness of legislation guaranteeing its rights.

Regardless of the decision's content, the company will file appropriate appeals. There are no changes to the pillars of our business model, including the testing and collection system at Points of Receipt (PODs).

(Editing by Leonardo Gottems, reporter for AgroPages)