There's mud getting slung down on the farm. Monsanto (NYSE: MON) and DuPont (NYSE: DD) have escalated their squabble over DuPont's license of Monsanto's Roundup Ready gene.
Monsanto gave DuPont a license to use the technology but doesn't want its competitor to combine the trait with a similar gene developed by DuPont. That's understandable, considering that the combined seed would likely result in crops superior to Roundup Ready alone. DuPont cried foul, claiming Monsanto has a monopoly. Monsanto went to court last May, but the war of words has just begun.
Monsanto's CEO Hugh Grant reportedly sent a letter to DuPont Chairman Charles Holliday Jr. this week characterizing DuPont's allegations that Monsanto has a monopoly as "misleading to the public and a serious breach of business ethics far beyond honest competitor behavior." Them's fightin' words.
Monsanto is upset that DuPont is supporting organizations that are attacking Monsanto. It's is kind of an easy target, and even some of my fellow Fools aren't too fond of the company.
I'm not convinced that Monsanto is to blame here, though. It's not like Monsanto isn't capable of getting along with its rivals. It's developing a new corn combining its traits with those of Dow Chemical (NYSE: DOW). Monsanto has also swapped licenses with Syngenta (NYSE: SYT) and has a deal with BASF to discover new traits.
It seems to me that the patent holder should be able to license -- or not -- the technology to whatever companies it wants and be able to limit the scope of those partnerships. No one seems to be complaining that Pfizer (NYSE: PFE) combined its Lipitor drug with a high blood pressure drug to make Caduet, but it hasn't licensed the blockbuster drug to any of its competitors that I know of..Brian Orelli
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It is my understanding that farmers must obtain a Monsanto licensing number to purchase the Monsanto gene seed no matter which company they use. Dupont would have a point in claiming the Roundup Ready gene is a monopoly if they don't actually have a similar product. If Dupont does actually have a similar product, why aren’t they producing it? And, if they have it, why would they need the expense of a licensing agreement with Monsanto in the first place?
If they have the technology and can produce a similar product and aren’t, then, they are not only doing the farmer an injustice but they have no reason to say Monsanto has a monopoly. It appears the suggestion that Dupont wants to develop a superior product is the more logical argument.
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