Post Patent Puzzle

Roundup Ready 1 Patent Expires, Leaves Questions in Its Wake

Emily Unglesbee
By  Emily Unglesbee , DTN Staff Reporter
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Roundup Ready 1 soybeans are coming off patent, but growers should check with their seed dealer before they try to save any seed this fall. (DTN file photo by Benjamin Krain)

ST. LOUIS (DTN) -- Twenty years have passed since Roundup Ready 1 soybeans were first deregulated, and the trait is coming off patent this year into a changed agricultural landscape.

Biotech traits in agriculture are the norm, new herbicide-tolerant crops are close at hand, and Roundup Ready 1's original patent-holder, Monsanto, is eager to relegate its very first biotech trait to the annals of history.

But for now, countless farmers still grow soybeans with the Roundup Ready 1 trait, and its transition off patent leaves a host of questions for the industry and farmers. Will seed be cheaper this fall? Will generic Roundup Ready seed be available? Will farmers start saving seed again? And perhaps most importantly, will the trait remain marketable?

Monsanto has promised to maintain international registrations for their post-patent Roundup Ready 1 soybean trait through 2021, which means companies and farmers can safely send the seed into the commercial grain stream for the next seven years. However, the availability of generic seed and the future of the Roundup Ready 1 trait remain uncertain.

A SEED BOTH GENERIC AND RARE

Starting with this year's soybean harvest, growers can legally save soybean seed with the Roundup Ready 1 trait, but only if there are no other patents on that seed.

That's a big catch. Most companies that have licensed the Roundup Ready 1 trait from Monsanto have put it into soybean varieties that are themselves patented -- a process called "varietal patenting."

One of the largest suppliers of Roundup Ready 1 seed is DuPont Pioneer. Every soybean product at Pioneer is protected by multiple patents, usually for genetics, other biotech traits, or specific breeding techniques, Pioneer spokesperson Jane Slusark pointed out.

"We will continue to enforce and defend our intellectual property across our soybean product portfolio," Slusark told DTN in an e-mail. "DuPont Pioneer has a field education effort to help growers understand the importance of protecting intellectual property, in addition to product compliance checks to ensure IP [intellectual property] regulations are being followed."

Dermot Hayes, a professor of agribusiness at Iowa State, said in a best-case scenario, the end of this patent would lead to cheaper, more abundant supplies of the Roundup Ready 1 seed.

"The positive outcome would be a lot of competition for Roundup Ready 1, and it becomes kind of a cheap commodity product with a lot of availability," Hayes told DTN. "And that's what should happen. Farmers have paid licensing fees for this technology for 20 years."

Yet growers expressed doubt to DTN that they would see cheaper Roundup Ready 1 seed varieties next spring, and Slusark confirmed their suspicions. "Our pricing is driven by the value the product provides to growers -- not licensing fees," she told DTN.

Theoretically, a company could scoop up the un-patented trait and slip it into some generic soybean seed, but the result wouldn't be very valuable to a farmer, Ray Gaesser, farmer and president of the American Soybean Association, pointed out.

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"They would have to sign a license agreement with a genetics company to start their own business, because I don't know where you're going to get many yield-competitive public varieties out there," he told DTN. Moreover, public breeding projects at universities often patent their seed, in order for the universities to recoup some of their costs, he added.

Independent state breeding programs, like the Missouri Crop Improvement Association, are a possible source of generic seed, University of Missouri soybean breeder Andrew Scaboo told DTN. Growers interested in saving generic soybean seed should check with their own state crop improvement associations to see if they will offer generic Roundup Ready 1 seed in the future.

Before saving seed, Monsanto says growers should consult their seed dealer and use this "decision tree," created by the company to determine if there are additional patents on the seed: http://goo.gl/….

TO SAVE OR NOT TO SAVE

Gaesser said he doubts many soybean farmers will hold back Roundup Ready 1 soybean seeds this fall for the spring. Not only is generic Roundup Ready 1 seed scarce, but the process of cleaning and storing your own seed is no longer as straightforward and cost-effective as it used to be.

"We don't have the same system we had 30 to 40 years ago when a lot of people saved their own seed and planted it every year," Gaesser said.

Seed cleaners have slowly retreated from the Midwestern landscape, he pointed out. "It used to be you'd have a seed cleaner within 10 miles of your house," he recalled. "Today because of genetic patents and trait patents, farmers are no longer saving seed, and there just isn't a market or demand for that."

There are also costs to storing and replanting your own seeds, such as yield drag and separate seed treatment applications, Monsanto's U.S. Oil Seeds Product Management Lead Norm Sissons noted.

Storing your seed at the right moisture and temperature to ensure germination in the spring can be difficult and expensive, and yield loss might still occur. "A lot of historical research suggests that saved seed yields up to 2 bushels less than commercial seed," Sissons noted.

PHASING OUT ROUNDUP READY 1

Monsanto and most major seed companies have signed the GEMAA (Generic Event Modernization and Access Agreement). The document gives companies facing patent expirations three options: independently maintain the trait's regulatory requirements in the major export markets at no cost to users of the trait, share the maintenance of those regulatory requirements, or discontinue them entirely.

Fortunately for the companies and farmers using Roundup Ready 1, Monsanto has agreed to the first option and will maintain regulatory approvals in export markets like China, South America, and Europe until 2021.

"Seven years was the time frame that we determined made sense to allow for an orderly transition," Monsanto Product Communications Lead Danielle Stuart told DTN in an e-mail. She estimated that this regulatory maintenance will cost the company up to $1.5 million a year.

After 2021, any company that wants to continue using the trait is free to take over regulatory maintenance as outlined in the GEMAA's framework, Stuart said.

Monsanto itself wiped the last traces of Roundup Ready 1 out of its brand a couple years ago, and would prefer growers do the same.

"It is really not a significant point of market importance any longer, because we've transitioned to Roundup Ready 2 Yield," Sissons said of the company's new genetic platform, which was launched in 2009.

Sissons said the company has extensive data showing an average yield advantage of 4 to 5 bushels with Roundup Ready 2. He said the superior genetics of the new platform will eventually drive other companies and growers to leave the Roundup Ready 1 trait behind and transition fully to Roundup Ready 2.

"That's really our goal -- to continue to provide growers with enough value that they want to continue purchasing our products, and that's what we've been able to do with Roundup Ready 2 yield soybeans and that's what we plan to do with Roundup Ready Xtend soybeans," he said.

Hayes said he would prefer to see the Roundup Ready 1 trait stay available indefinitely, and questioned claims that Roundup Ready 2's yield advantages have rendered the older trait obsolete.

"Roundup Ready 1 is a fantastic technology and it's a low cost, and free [of licensing fees] now, and I think farmers would want access to it, period," he said. "Roundup Ready 2 came along with potentially higher yields, but some of those higher yields may be associated with seed treatments and other things required with the technology. It's not clear to me that, as a standalone, it's worth the additional premium."

Ultimately, the future use of Roundup Ready 1 will be determined by the growers, MU soybean breeder Andrew Scaboo noted. "I'm going to continue to breed with it as long as farmers find the value in it," he told DTN. "If they come to me and say I can't export my beans, there's no reason for you to work on Roundup Ready 1 beans, I'll stop."

See the GEMAA agreement here: http://goo.gl/….

See the website devoted to Roundup Ready 1 patent questions and information here: www.soybeans.com.

Emily Unglesbee can be reached at emily.unglesbee@dtn.com

Follow Emily Unglesbee on Twitter @Emily_Unglesbee.

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Emily Unglesbee