BASF Sues Farmer for Allegedly Saving Seed

Lawsuit alleges Clearfield rice seed piracy

Sep 16, 2004 10:16 AM

Lawsuit seeks damages as well as a permanent injunction.

By David Bennett

JONESBORO, Ark. -- Contending Clearfield rice - a crop tolerant of Newpath
herbicide - is being grown illegally, BASF has filed a lawsuit against
several northeast Arkansas farmers. The company claims the farmers around
Walnut Ridge, Pocahontas and Bono, Ark., saved (brown-bagged) Clearfield
seed from the 2003 harvest to plant this season.

Also named as defendants are "John Does 1-25" representing anyone
contributing, facilitating or enabling the named defendants to infringe on
the BASF patent.

The Dutch-based company filed the complaint Sept. 3 in the U.S. District
Court for the Eastern District of Arkansas in Jonesboro, claiming the
farmers infringed patented technology and violated the company's Clearfield
rice stewardship agreement. The lawsuit seeks damages as well as a
permanent injunction.

"The first issue we're concerned with is out-crossing and the issues that
arise with it," says Randy Ouzts, general manager of Horizon Ag, LLC - the
company that manages Clearfield rice seed varieties. "This is very
different from folks saving Roundup Ready seed illegally, which is bad
enough. With Clearfield rice, we can't tolerate any out-crossing in our
seed stocks."

Ouzts says both Horizon and BASF have been adamant with growers from the
technology's outset. "First, you can't save seed because it's patented.
More importantly, you can't save it because you can't guarantee the saved
seed will be red rice-free and have the proper tolerance associated with
the imidazolinone chemistry used on it."

Ouzts says investigators have been looking at illegally planted Clearfield
since April. While suspecting some farmers were planting the seed, no one
realized the magnitude of the acreage involved. Investigators are trying to
determine the exact acreage of illegal Clearfield rice.

"This is probably one of the largest events of piracies in the history of
the industry," says Ouzts. "We believe this involves several thousand acres
of pirated seed - perhaps as much as 5,000 (acres)."

Alleging breach of contract, the companies on Sept. 9 gained an injunction
to prevent the destruction of evidence related to the case. According to
the injunction, among other things, the accused agreed to allow their
harvests to be monitored, for their records to be opened, and to cooperate
"fully and completely" with company investigators. They further agreed to
"provide direction to each field on which rice was planted, including any
fields already harvested as well as any grain bins, storage trucks, bags or
other storage facilities."

The pirated crop can be sold only for milling "or other non-seed or
non-reproductive purposes."

As a result of this action, according to a Bruce Cranfill, BASF marketing
manager for Clearfield rice, the company "anticipates that none of the
harvested crop grown from saved seed will enter the seed channel."

Ouzts says he's unsure if investigators will be riding combines, but does
promise continued and increased vigilance regarding Clearfield. While this
case focuses on Arkansas, investigators have made forays into other Delta
states. Anyone who thinks this is the end of investigations and subsequent
lawsuits is mistaken, he says.

"These aren't the only people who will be caught. We're going to find
others and they'll be treated the same."

About 200,000 acres of Clearfield rice (14 percent of the state's total
rice acreage) were planted in Arkansas. With more than 1.5 million acres of
rice, Arkansas is responsible for about half of the nation's total production.

The Nolan Henry law firm, with offices in Stuttgart and Fayetteville, Ark.,
represents BASF in the case.

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