On Wednesday 21st February, US-based agribusiness Monsanto announced it would appeal against a decision made by the Brazilian Supreme Court of Justice over its patented seeds.

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The court had ruled against granting Monsanto an extension on its patented Roundup Ready soybeans. The ruling has serious implications for the company, as it was made during a bitter legal spat over royalty payments between Monsanto and millions of Brazilian soybean growers.

The court ruled that Monsanto is not entitled to collect royalties on its genetically modified RR1 soybeans; farmers' organisations claim Monsanto's patent on the seeds expired in2010 and have refused to continue paying royalties. The soybeans at the centre of the row have been engineered to resist applications of Roundup, Monsanto's best-selling glyphosate herbicide.

Brazil is the world's second largest producer of genetically modified crops, most of which are soybeans. Roundup Ready soybeans account for about 85 percent of the Brazilian crop; prior to their being legalised by the Brazilian government, huge amounts of GM seeds were smuggled into Brazil from neighbouring Argentina.

When the crops were legalised, Monsanto began charging farmers a 2 percent royalty fee, which farmers have since rejected, arguing it amounts to paying twice for the same seed and violates Brazilian law. In 2009, a number of farming unions banded together to mount a legal challenge, which was supported first by a regional court in the southern state of Rio Grande do Sul, then by judges in Federal courts.  

Monsanto claims its renewal of the Brazilian patent on RR soy was intended to bring it into line with the patent term granted in the United States, which lasts until 2014. The company justifies its quest for royalty payments from farmers by claiming that many Brazilian growers still use illegally bought seeds, and that charging royalties allows the company to recoup some payment for its "intellectual property." 

Monsanto legal spokesperson Todd Rand said on Wednesday, "We plan to file an immediate appeal with the Superior Court of Justice and look forward ultimately to presenting our case to the Supreme Court of Brazil at a later date."

Although the company is challenging the Supreme Court's royalties ruling, in January it also struck a deal with farmers over the patent dispute. Brazil's Confederation of Agriculture (CNA), along with 11 other groups representing 70 percent of the country's soy producers, agreed to terms laid out by Monsanto. However, powerful unions in Mato Grosso State rejected the deal outright, insisting they had the backing of the authorities.

On Monday (25th February), Carlos Fávaro, president of Aprosoja, the Mato Grosso Association of Corn and Soybean Producers, said "The decision of the Supreme Court gives us the full conviction that we were right. It is a big win [and is] practically decisive for the case."

Also on Wednesday, CNA announced it had rejected the deal struck with Monsanto in January. CNA said individual agreements Monsanto had put to soybean producers in Brazil, "do not meet the terms of the Declaration of Principles signed between the parties [in January]." CNA claimed Monsanto's individual agreements also dealt with technologies other than RR1 soybeans, which was not discussed when farm unions accepted the company's terms earlier in the year.

In a statement CNA declared it "repudiated the company's conduct" and demanded the annulment of individual agreements signed outside of the agreed terms.

Until the legal spat is resolved, soy growers are making their royalty payments to a third party, rather than paying Monsanto, in the hope of recouping the money if they are victorious in court. Farm union Famato, which also rejected Monsanto's deal in January, estimated in mid-February that US $ 1.7 billion has been deposited in escrow throughout the country.