Monsanto's Public-Relations Challenge

Monsanto (NYSE: MON) is in a sticky situation. It needs to protect its intellectual property but at the same time not look like a big corporate bully that's picking on the little guy.

In its most recent patent dispute, with a grain-elevator co-op in Missouri, Monsanto won. The co-op agreed to stop saving seeds and will also pay an undisclosed sum of money, but Monsanto's not taking the cash. Instead, the money is going to fund college scholarships for local students with an interest in agriculture. Nice touch, Monsanto: Make the co-op hurt where it counts, but don't look like the bad guy by taking the money.

Monsanto has filed about 125 lawsuits to stop patent infringement, and it has been able to avoid court in all but eight of those cases, winning those eight.

Perhaps more than any other industry, seed makers have to defend their intellectual property because their products are so easily reproduced. Monsanto and the rest of the agricultural biotech companies have to walk a fine line. They have to make sure that farmers understand that they've pumped hundreds of millions of dollars into developing the seeds, and therefore farmers can't just buy them once and propagate them. But they've got to do it in a way that doesn't upset their customers.

So far, so good, Monsanto.