Bayer AG has obtained an injunction from a Brazilian court, temporarily suspending a prior ruling that mandated reimbursement to soybean farmers for royalties paid on expired patents of genetically modified (GMO) soy seeds. This development is the latest in an ongoing legal dispute between the German multinational and Brazilian soybean producers.​ 

Background of the Dispute

The conflict centers on Bayer's Intacta RR2 PRO technology, a GMO seed trait that combines tolerance to the herbicide glyphosate and protection against caterpillars. Following Bayer's acquisition of Monsanto in 2016, the company inherited multiple legal challenges related to this technology in Brazil, the world's largest soybean producer and exporter.​

Recent Legal Developments

In December 2024, a lower court in Mato Grosso—a key soybean-producing state—ruled in favor of local farmers, granting them the right to reimbursement for royalties paid after the expiration of certain patents associated with the Intacta technology. The court adjusted the patent terms to December 12, 2020, and March 3, 2018, respectively, and ordered Bayer to repay amounts charged beyond these dates, estimated at approximately 10 billion Brazilian Reais (BRL).The reimbursement was to include inflation adjustments based on the National Consumer Price Index (INPC), plus 1% monthly interest from the citation date. ​ 

However, Bayer successfully obtained an injunction to suspend this ruling until the Mato Grosso court of appeals reviews the case. The company communicated to stakeholders that this outcome preserves the current status quo, ensuring that the core principles of their business model remain unchanged while the appeal is pending. ​ 

Financial Implications

The injunction prevents the immediate enforcement of the lower court's decision, which had significant financial implications for Bayer. The company has provided approximately 4.5 billion BRL (equivalent to $785.30 million) in "judicial guarantees" while two lawsuits are ongoing. In 2023, Brazil's Supreme Court ruled that patent rights could not be extended beyond 20 years, affecting 1.3 billion BRL in Intacta royalties previously paid by local farmers. ​ 

Ongoing Legal Proceedings

The legal proceedings are ongoing, with Bayer appealing the lower court's decision. The outcome of the appeal will have significant implications for the company's operations in Brazil and its financial obligations concerning the Intacta RR2 PRO technology.The case underscores the complexities of patent law in the agricultural sector and the challenges multinational corporations face in protecting their intellectual property rights across different jurisdictions.​

As the situation develops, stakeholders in the agricultural industry are closely monitoring the proceedings, given their potential impact on biotech innovations and the enforcement of patent rights in Brazil.

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