INDUSTRY WATCH: A Glimpse Into The Pesticide Wars

What would it take for you to bring a lawsuit against one of your competitors in order to stop them from being able to launch a new product or service? Most pest management companies probably can’t imagine taking such a dramatic step against their competition, but the stakes are much higher in the pesticide manufacturing business. In that market, the primary competitors each generate billions of dollars of sales annually from successful products that are getting more difficult and more expensive to produce due to increased regulatory pressures.

So, when you’ve got a product that is about to be challenged by a new product that uses a similar chemistry, why not file a lawsuit alleging patent infringement? Believe it or not, this is a strategy that most pesticide suppliers have probably used at some point, although they’re all hesitant to admit it for obvious reasons.

The latest pesticide patent suit involved two industry heavyweights  — Bayer and Syngenta. And the argument focused on some prized real estate — a new active ingredient (thia-methoxam) that soon will be available to the structural pest control market.

Here’s a little history about thia-methoxam: Syngenta plans to use the active ingredient in several new products — among them, a grub control product called Meridian.

Bayer has a preventive grub control product called Merit (active ingredient: imidacloprid) and once Bayer representatives found out about thiamethoxam and realized it comes from the same pesticide class as imidacloprid, a patent infringement suit was born in 1994 — despite the fact that Syngenta hadn’t even received regulatory approval for thiamethoxam at the time. (Note: if imidacloprid sounds familiar, it’s because it is the active ingredient in Bayer’s  termite control product, Premise.)

Why all the concern about a product that wasn’t even ready to be sold yet? Well, thiamethoxam and imidacloprid belong to the same class of insecticides, which are known as neonicotinoids and are responsible for about $1 billion of global sales annually. Bayer wasn’t interested in sharing this market with its competitors, and who can blame it? More than seven years later, the two companies settled their lawsuit when Syngenta agreed to pay Bayer $120 million in return for full access to the crop protection and related markets worldwide, including structural pest control.

Now Syngenta personnel are preparing to introduce thiamethoxam to a number of markets and in a number of forms, and they’re ready to move forward. “Patent issues are fairly routine in our business, and they’re always quite complex,” said Kay Carter, a spokesperson for Syngenta. “This issue with Bayer was more complex than others because it involved multiple jurisdictions — it was really a global issue.”

“Reaching an agreement on this lengthy patent dispute was not easy but we are convinced that this is in the best interest of our customers,” said Dr. Jochen Wulff, president and CEO of Bayer’s Crop Protection division. Bayer will continue to serve all markets with its imidacloprid-based insecticides.

Coby Long, Syngenta’s brand manager for insecticides, acknowledged that thiamethoxam and imidacloprid are similar products, but he identified several differences as well. “Our position is that our product is of a different and a new subclass, and that’s where the differentiation started,” he explained. “There are also significant physio-chemical characteristics between the two products.

“There are some real physical differences in the chemistry and the active ingredient that allow the product to be more readily available for pest control...so that leads to the product acting faster and offering a longer residual,” Long said.

Syngenta officials said they expect thiamethoxam products will be available in the ornamental market and possibly even the structural pest control market this year. “We just got some great news...about thia-methoxam for the pest control market, and we should have a big announcement in the next 30 days or so,” Long said.  (Stay tuned to www.pctonline.com for details once the announcement is made.)

Although pest management professionals are most interested in products that affect their market, Syngenta says it will offer the product to other markets as well. “(The market is) even bigger for the do-it-yourself market, which we expect to have products for as well,” said Chuck Buffington, Syngenta’s turf and ornamental market manager.

With the patent infringement suit behind it, Syngenta now has to focus on dealing with the EPA. “We’ve all had things on the EPA work slate, but the Food Quality Protection Act (FQPA) created a lot of challenges for EPA and the manufacturers,” Long said, adding that he hasn’t noticed any changes in dealing with the EPA since the new administration took over early in 2001. “The people we deal with are the scientists and regulatory administrators, and they’re still committed to the road-map laid out by FQPA.”

The author is editor of PCT magazine’s sister publication, Lawn & Landscape. He can be reached via e-mail at bwest@pctonline.com.