Seed giant Monsanto is a case study in how abusing patent laws can create serious anti-competitive results
. Monsanto, of course, patented various genetically modified seeds, and then aggressively used patent laws around the world to make it so that it was effectively impossible to do much without having to pay Monsanto. The US Supreme Court made things even worse a few years back by saying that Monsanto's patents were infringed
upon when farmers hung onto seeds from this year's crop to plant next year (a very common practice in farming). Last week, the US Supreme Court again helped out Monsanto by ruling (mostly) in its favor
in another case concerning Monsanto seeds.
However, the company is starting to see a lot more problems with its aggressive stance around the world. This week, the European Court of Justice smacked down Monsanto
over its attempt to bar the import of Argentinian soymeal. Apparently Monsanto had failed to get a patent on its famous Roundup Ready soybeans in Argentina (which now dominate the market), and dealt with it by blocking the import of such soybeans to other countries. Argentinian producers figured that if they couldn't sell soybeans directly, they could process it into soymeal and sell that. Monsanto claimed that because the soymeal came from soybeans that would be patented in Europe, the soymeal was also infringing. The court disagreed.
That the court disagreed wasn't a huge surprise. The court had more or less made that clear a few months ago. Because of that, Monsanto tried to duck an important ruling against it by settling the dispute
and withdrawing the original patent complaint. The European Court seemed to decide it wasn't going to let Monsanto off that easily. Even with the complaint withdrawn, the Court still went ahead with the judgment, making the point clear.
Separately, some governments are now kicking off investigations into Monsanto's advertising statements
about the very same Roundup Ready soybeans. Combine all of that and Monsanto also reported dreadful earnings
, with a 45% profit drop.
Once again, we're seeing what happens when you live off of artificial monopolies. They can make you rich in the short term, but they're no trick to building sustainable businesses. What the government gives in the form of monopoly rights, it can also take away.