Mertam is a US R&D Company devoted to produce genetic modified seeds. One of the most successful developments is a modified variation of Soybean seed know as M-116. The modified variation has been properly patented in the US.
Since Brazil is a big soybean producer, Mertam has decided to fill the patent in that country. Brazil and the US have a Bilateral Investment Treaty. While the patent of M-116 was under examination by the Brazilian Patent Office, Mertam signed a license agreement with a local laboratory named, Bricadeira. The contract allowed Bricadeira to produce and distribute the M-116. Bricadeira produced and licensed the seed to local producers. Feijao, is a mayor soybean agricultural producer in Brazil and decided to obtain the license from Bridacaeira. After singing, Feijao sold FOB a 100 ton of manufactured soybean to ¨Mar del Viña” the biggest trader of agricultural products in Chile. Mertam already had the M-116 patented in Chile.
The Brazilian Patent Office decided to deny the patent in Brazil arguing that seeds can not be patented because would be a violation to the human right principle of free access to food. As a result of that, Feijao, decided not to pay royalties to Bricadeira, since the seed is considered to be in the public domain. At the same time, because of the denial of the Brazilian Patent office, Mertam required an injunction from a Chilean Court avoiding the distribution of the soybean M-116 in that country. The Chilean Court granted the injunction, and the shipment dispatched by Feijao must remained in port. As a consequence, Mar del Viña decided to initiate actions against Feijao for breaching of the sale contract. No jurisdiction nor applicable law was determined.
Finally, Mertam and Bricadeira Jointly sued the Brazilian Government at the ICSID court for a violation of a Bilateral Investment Treaty.
Answer these questions
the Lawyer of Feijao:
strategy to repel the action for breach of contract initiated by Mar del Viña.
strategy against Mertam because of the injunction. (Using international
antitrust arguments would be recommended).
You are an
arbitrator at the ICSID court, you need to decided:
is a violation of the bilateral investment treaty.
human right mentioned by the Brazilian Patent Office prevails over the BIT.