Brazil court denies Monsanto bid to halt seed licensing to bankrupt firm

By Ana Mano

SAO PAULO (Reuters) - A Brazilian appeals court denied a request this month by Monsanto's local unit to suspend licensing of its popular Intacta soy seed technology to privately owned seed maker Sementes Talismã, according to a ruling seen by Reuters.

Monsanto sought to suspend the licensing of the genetically modified seed technology after Talismã filed for bankruptcy protection in January, one of the seed maker's lawyers, Daniel Amaral of DASA Advogados in São Paulo, said.

"Monsanto sought to end the licensing contract to try and negotiate better terms in Talismã's ongoing financial restructuring," Amaral said.

Press representatives for Germany's Bayer AG <BAYGn.DE>, which bought Monsanto in a $66 billion deal, said like various other creditors in Talismã's proceedings it is taking "the applicable legal measures to secure its rights."

Amaral said remaining a licensee of Monsanto's Intacta technology is crucial for Talismã as it seeks to reorganize the business and restructure about 180 million reais ($49 million) of debt.

Talismã said in a statement sent to Reuters on Thursday that maintaining rights to use the Intacta technology is key to keep the business afloat.

The appeals court decision, handed down in the state of Goiás on Oct. 11, sets a precedent for any Brazilian seed company in financial distress that chooses to repay overdue royalties under court supervision, Amaral said.

In July, a Brazilian judge ordered local units of Monsanto to deposit in an escrow account royalties related to its Intacta RR2 Pro technology pending the outcome of litigation over a patent dispute between the firm and Brazilian soy growers.

Talismã is still in the process of negotiating new terms for repaying all its debt obligations, Amaral said. Monsanto is Talismã's single largest unsecured creditor and is owed 40 million reais, he said.

Amaral said Goiás-based Talismã is up to date on royalty payments to Monsanto due after the bankruptcy filing, and has yet to negotiate terms of pre-filing obligations.

So far this year Talismã has paid about 8 million reais in royalties to Monsanto.

($1 = 3.6736 reais)

(Reporting by Ana Mano; Editing by Christian Plumb and Susan Thomas)