Monsanto patents many of the seed varieties we develop. Patents are necessary to ensure that we are paid for our products and for all the investments we put into developing these products. This is one of the basic reasons for patents. A more important reason is to help foster innovation. Without the protection of patents there would be little incentive for privately-owned companies to pursue and re-invest in innovation. Monsanto invests more than $2.6 million per day in research and development that ultimately benefits farmers and consumers. Without the protection of patents, this would not be possible.
When farmers purchase a patented seed variety, they sign an agreement that they will not save and replant seeds produced from the seed they buy from us. More than 325,000 farmers a year buy seed under these agreements in the United States. Other seed companies sell their seed under similar provisions. They understand the basic simplicity of the agreement, which is that a business must be paid for its product. The vast majority of farmers understand and appreciate our research and are willing to pay for our inventions and the value they provide. They don’t think it's fair that some farmers don’t pay.
A very small percentage of farmers do not honor this agreement. Monsanto does become aware, through our own actions or through third-parties, of individuals who are suspected of violating our patents and agreements. Where we do find violations, we are able to settle most of these cases without ever going to trial. In many cases, these farmers remain our customers. Sometimes however, we are forced to resort to lawsuits. This is a relatively rare circumstance, with 147 lawsuits filed since 1997 in the United States. This averages about 8 per year for the past 18 years. To date, only 9 cases have gone through full trial. In every one of these instances, the jury or court decided in our favor.
Whether the farmer settles right away, or the case settles during or through trial, the proceeds are donated to youth leadership initiatives including scholarship programs.
We pursue these matters for three main reasons. First, no business can survive without being paid for its product. Second, the loss of this revenue would hinder our ability to invest in research and development to create new products to help farmers. We currently invest over $2.6 million per day to develop and bring new products to market. Third, it would be unfair to the farmers that honor their agreements to let others get away with getting it for free. Farming, like any other business, is competitive and farmers need a level playing field.