The Facts on Monsanto's Approach to Licensing
While some of our multinational competitors have historically taken an approach of not broadly licensing their germplasm or trait inventions, Monsanto has chosen a much different path. We broadly license germplasm and our trait innovations so farmers can realize the benefits from these inventions through the brands they prefer to plant on their farm.
We believe Monsanto’s broad licensing approach has made a huge difference in the choices available to farmers. This approach has been an important step in putting farmers first in our business. The way we have licensed our inventions does not prevent seed companies from using and selling competitive traits. For example, a company licensing Genuity® Roundup Ready 2 Yield® soybeans may continue to sell and market first-generation Roundup Ready® soybeans and they may in-license and sell any other soybean trait. All seed companies, including us, need to produce seed based on farmers’ demand.
While our agreements do not permit us to discuss the specific terms of particular licenses, we can speak generally about them. Much of what is commonly said about our licenses is wrong, and we’d like to set the record straight.
Here are some key things that you should know about our approach to licensing:
- Licenses provide opportunity without obligation. While we license our traits broadly, our licensing agreements do not require licensees to use our traits in their seeds. Our licenses simply enable the seed company licensees to use our traits in their seed, if they so desire.
Licenses are shaped around needs. Our license agreements include provisions that are common in agreements throughout the industry. When another company expresses interest in licensing a Monsanto technology, we work together to craft a licensing agreement.For companies that have their own traits, both parties discuss a wide range of options and reach agreement on specific terms that reflect the unique circumstances.
Some of Monsanto’s license agreements include stacking rights. Our agreements with other companies that have their own traits often include rights to create stacks. These agreements contain a specifically negotiated set of rights and obligations. The vast majority of independent seed companies have generally not sought a license to create stacks. This is primarily because these companies have not invested in developing and maintaining the research and development, regulatory and stewardship resources necessary to seek approvals for new biotech trait combinations and to steward trait combinations globally. Properly managing stacked products is very important to ensure the grain produced by U.S. farmers can be shipped to export markets.
We care about our business partners. Our licensing agreements, just like thousands of other agreements, have change of control provisions. These provisions are very common in business agreements that last over an extended number of years. Most companies care whom they do business with, and so does Monsanto. Change of control provisions are standard in commercial contracts and allow parties to exit a contract if the other party changes during the life of the contract.