Monsanto and Intellectual Property

Abstract

This case presents the issues and dilemmas that Monsanto faced in deciding how to market its genetically modified products. It also covers patent issues, intellectual property, and licensing strategies.

Excerpt

UVA-E-0216

MONSANTO AND INTELLECTUAL PROPERTY

Jim Tobin, director of biotech business development at Monsanto, had to prepare for a planning meeting with management. He was part of a team whose functions included marketing, breeding, microbiology, entomology, regulation, public affairs, and product development. Monsanto already had a contract with Delta & Pine Land (D&PL), the largest breeder and producer of cottonseed, to market a genetically modified form of cotton that manufactured its own insecticide. These cotton plants, which would be marketed under the name BollgardÒ, had been genetically modified by the addition of Bacillus thuringiensis (Bt), a soil bacterium that produced a protein toxic to the cotton bollworm. Organic farmers had used Bt as an alternative to chemical pesticides. Monsanto researchers led by Ernest Jaworski took the gene that produced the protein and inserted it in plants like tomatoes, corn, and cotton.

The agreement with D&PL called for Monsanto to do market research to find out what premium farmers were willing to pay for the modified seed. A typical price was about $ 8 to $ 10 an acre for seed, and, on average, the farmer would have to spray four times during the year with each spraying costing about $ 8 to $ 10. Any price below $ 32 an acre would be a competitive price for farmers. If, however, they used the seed from one generation of Bollgard to plant the next, such a price would not be profitable for Monsanto, especially given the costs of research and development.

The stakes were high, because whatever solution Tobin and his team evolved for Bollgard could be applied to other genetically modified (GM) crops, such as soybeans made genetically resistant to Monsanto's herbicide RoundupÒ.

Betting the Company

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Keywords: ethical issues, market analysis, marketing strategy, product development, public/relations/publicity