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NEW YORK — Monsanto Co., facing antitrust probes into its genetically modified seeds, may benefit from previous court rulings in which intellectual property rights trumped competition concerns, antitrust lawyers say.
The Justice Department and seven state attorneys general are investigating whether the world's largest seed company is using gene licenses to keep competing technologies off the market. At issue is how the company sells and licenses its patented trait that allows farmers to kill weeds with Roundup herbicide while leaving crops unharmed. The company's Roundup Ready gene was in 93 percent of U.S. soybeans last year.
"Justice is clearly trying every way it can to see whether Monsanto is exceeding its rights under the patent," said James Weiss, a Washington-based attorney who helped defend Microsoft Corp. against a federal antitrust probe. "At the end of the day, they may not be able to do much with it because of the scope of those patents. In almost all the cases, the courts come out on the side of intellectual property."
Yet Monsanto's seeds are so ubiquitous that they have become like AT&T's telephone lines before the company's 1984 breakup or Microsoft's Windows operating system in the 1990s, said James Denvir, an attorney who represents rival seedmaker DuPont and led the government's AT&T case.
"Both cases involve what I think of as a classic platform monopoly," Denvir said. "It's a facility that competitors need access to, to compete against the monopolist."
Monsanto and DuPont, which are suing each other over a biotech seed license, hired former Justice Department lawyers who have handled high-profile cases.
Monsanto's attorney, Dan Webb, defended Microsoft in 2002 against government antitrust claims. A former U.S. Attorney in Chicago, he also prosecuted Admiral John Poindexter in the Iran-Contra affair.
Webb credits Monsanto with "revolutionizing the agriculture marketplace" and said antitrust claims such as those in DuPont's suit aren't an uncommon response to patent infringement cases such as Monsanto's.
"The perception among farmers is that DuPont's complaints about exclusivity are without merit," Webb said.
Denvir, who represents DuPont, said farmers are among the victims.
"Clearly, we are too," he said. "The bigger harm, the more important harm, is to farmers in denying them the best seeds they can get at the lowest possible prices."
While patents provide some protection from antitrust claims, giving a company a legal monopoly for a specified time, patent rights can be abused, DuPont lawyers and others said.
"The question becomes whether or not somebody in that position has engaged in some bad acts that either got it in that position or are designed to maintain that position or to extend that position to other markets," said Charles Rule, who ran the Justice Department's antitrust unit under President Ronald Reagan.
"When you have that sort of monopoly power, it can lead to abuse, which is what we've been experiencing over the past several years," said Thomas Sager, DuPont's general counsel.
DuPont claims Monsanto protects its lead in biotech seeds, including the Roundup Ready seeds sold since 1996, by controlling whether competitors can add their own genetics.
Monsanto also has begun switching seedmakers and growers from Roundup Ready soybeans to the newer Roundup Ready 2 Yield version in advance of the original's patent expiration in 2014. DuPont says Monsanto is using incentives and penalties to switch the industry to the new product in a way that unlawfully extends the Roundup Ready monopoly.
At least seven states are investigating many of the same claims, as well as whether Monsanto illegally offered rebates to distributors who limit sales of competing seed, according to one person involved in the probe who asked not to be named because he isn't authorized to discuss it.
Monsanto has amended its practices to address some criticisms. The company will help the introduction of generic Roundup Ready soybeans by maintaining foreign import approvals during the transition, a process that will be followed for off-patent biotech seeds in the future, CEO Hugh Grant said in a January interview. Monsanto last year stopped giving rebates to dealers who limited competing seeds' sales, said Kelli Powers, a spokeswoman.
DuPont filed its federal antitrust case last year after Monsanto sued to block its rival from adding the Roundup Ready trait to seeds already modified to tolerate Roundup weed killer.
"Trait development has been stunted by the inability to get access to the Roundup Ready platform," Denvir said. Roundup Ready is "licensed so broadly that if you want to offer any trait, it has to be somehow combined with that trait."
While Monsanto has promised to allow generic versions of its products to emerge, Denvir said he is unconvinced that will happen without government intervention.
Monsanto got its lead in seed biotechnology because it invested in research long before DuPont and other competitors, said Webb, Monsanto's counsel. The company spent $6 billion on seed research in the 10 years through 2008 and $1 billion a year since then, said Powers, the company spokeswoman.
