The agreement, announced this week, follows a patent infringement lawsuit filed by the Iowa State University Research Foundation (ISURF) in May this year.
Filed in the US District Court for the Southern District of Iowa, the lawsuit claimed that after the Research Foundation was awarded several patents relating to a low-linolenic acid content soybean, Monsanto started marketing the products.
The biotech company claimed that it came to an agreement with Iowa over the use of the patent back in February to stop the problem escalating, and denied that it ever used patented soybean technology from Iowa State University.
"Monsanto's scientists developed its patented soybean product containing low-linolenic acid, using publicly available germplasm. We did not use any patented material from ISU and did not infringe upon any of ISU's patent. Nevertheless, when we learned there was a dispute, to avoid litigation, we worked to resolve the issue…We did indeed reach an agreement on this issue," said Monsanto at the time.
The firm and ISURF have now come to another agreement, which this time looks to be more definitive, and which is designed to pave the way for future collaboration.
Under the terms of the agreement, Monsanto will receive a commercial license from ISURF for current and future low linolenic acid product lines developed by Iowa State University. The University will receive a research license for the use of Roundup RReady2Yield soybeans.
Additional terms of the agreement were not disclosed.
Most soybeans contain high levels of linolenic acid, which reduces the shelf life and stability of products made from soy oil. To overcome this problem, soy oil is often partially hydrogenated to reduce linolenic acid levels. But this, in turn, produces artery-clogging trans fatty acids.
And with the growing need to remove trans fats from product formulations, plant breeders have responded by tackling the problem in the bean, in order to eliminate the need for hydrogenation.
According to Iowa State University, low levels of linolenic acid in soybean oil are also good for the food industry because they increase a product's shelf life.
Demand for the oil from the food industry has also been high because of its "excellent frying and flavor stability without the hydrogenation process that creates trans fats," states the university on its website.
It claims that some of its most recently produced oils contain only one gram of saturated fat per tablespoon, thereby matching the saturated fat content of canola oil and reducing by half the saturated fat found in traditional soybeans.
Today, soybean oil - together with palm oil - accounts for over half of all oil consumed in the world. A report from analysts Business Communications Company suggests that US production of major crude vegetable oils is slated to reach 8.6 million metric tons in 2008, with soybean oil accounting for nearly 87 per cent of the major vegetable oil production at 7.4 million metric tons.