TITLE: European Commission supports Argentina in Monsanto battle PUBLICATION: MarketWatch (DowJones) DATE: 10 August 2006 URL: http://www.marketwatch.com EUROPEAN COMMISSION SUPPORTS ARGENTINA IN MONSANTO BATTLE 10 August 2006 BUENOS AIRES (MarketWatch) -- Argentina has obtained an opinion letter from the European Commission supporting the country's argument that soybean byproducts aren't covered under European patents held by U.S. biotechnology giant Monsanto Co. (MON), Argentine Economy Minister Felisa Miceli said Thursday. "We received an important ruling yesterday from the Internal Market and Services Directorate-General of the European Commission which will be sent to all European Customs (agencies)," Miceli said. The letter "strongly supports the Argentine position with respect to soymeal," she said at a Council of the Americas Conference in Buenos Aires. Monsanto has filed eight cases against soymeal importers in Denmark, the Netherlands, the U.K. and Spain to collect royalties on imports of Argentine soymeal based on a European patent on the company's Roundup Ready soybeans. Monsanto says companies in Europe are illegally importing soymeal made from soybeans that Argentine farmers are using without paying royalties. Monsanto has a patent on the seeds in the E.U. but not in Argentina, where the seeds were introduced in 1996 without a patent. Roundup Ready seeds are used to plant around 98% of Argentina's soybean crop each year, according to Argentina's Agriculture Secretariat. Most farmers buy the seeds in an underground market or simply replant them each year after the harvest, which denies Monsanto royalties revenue every year. The St. Louis-based company says that later attempts to patent the seeds were rejected by the government, which changed its regulations. However, Agriculture Secretary Miguel Campos has denied this and blamed the company for being "greedy." In recent months, Monsanto has gotten European Union customs officials to temporarily detain a number of Argentine soybean meal shipments to prove that the ships' contents were derived from Monsanto-made soybean seeds. This has caused delays and increased costs to importers, leading both importers and exporters in Europe and Argentina to complain about the way Monsanto has trying to resolve its dispute with the Argentine government. Monsanto plans to continue its fight and dismissed the significance of the opinion. "We are not aware of any official document, bet even if it is confirmed, the development of the present cases should not be effected," said Monsanto Argentina spokesman Federico Ovejero. "This is a matter between private companies, and we have very solid cases in Europe." The opinion letter by the European Commission's legal experts found that E.U. law governing the protection of biotech inventions doesn't extend to derivatives of patented products, an E.U. official in Brussels said. However, the opinion isn't binding on national courts and the Commission isn't involved in the legal cases between Argentina and Monsanto, the E.U. official said. If the importers are found guilty by the Dutch and Danish national courts, it will be up to national courts to mete out sanctions, the official said. Argentina approached Commission experts recently to ask for a legal opinion. Argentine soymeal exporters say their business is suffering as their clients in Europe fight court battles with Monsanto. Miceli said that $3.6 billion per year in worldwide soy sales were threatened by Monsanto's actions. Argentina is the world's leading soymeal supplier, and the E.U. is its top client. The South American nation exported 11 million tons of soybean products to the E.U. last year, primarily soymeal for use as animal feed. As measured in dollars, soybean-related exports to Europe totaled about $2 billion in 2005, according to Agriculture Secretariat data.