May 5 (Bloomberg ) -- Monsanto Co., the world’s biggest seed maker, sued DuPont Co. to prevent it from producing Roundup herbicide-resistant corn and soybean seeds by combining Monsanto’s genetic traits with its own.

DuPont is violating Monsanto’s U.S. contract rights and patents by using the Roundup Ready trait with DuPont’s so-called GAT genetics, Monsanto said today. Monsanto is seeking to stop DuPont from infringing on its Roundup Ready patent and to terminate the soybean-license agreement, according to the lawsuit filed yesterday in federal court in St. Louis.v DuPont since 2005 has said its GAT technology would be an alternative to Roundup Ready crops, which tolerate applications of glyphosate herbicide. DuPont last year reversed course to include Roundup Ready technology in its Optimum GAT soybeans, scheduled for sale in 2011, prompting St. Louis-based Monsanto to enter into dispute resolution.

“As the saying goes, imitation is the sincerest form of flattery,” Monsanto Chief Executive Officer Hugh Grant said today in a statement. “However, unlawfully taking technology is neither imitation nor flattery. It is unethical and wrong.”

DuPont, the No. 2 seedmaker, said Monsanto is trying to stifle competition at the expense of improved crop yields for farmers. Companies should be allowed to combine genetic traits in their seeds “without restrictions imposed by trait providers,” DuPont said in a statement.

‘We Have A Right’

“We believe we have a right to do what we are doing,” Dan Cosgrove, DuPont corporate counsel, said in a telephone interview.

DuPont next year will begin selling Optimum GAT corn seed without Roundup Ready traits, and the company is testing a combination of GAT corn and the Monsanto trait, Cosgrove said. DuPont discovered last year that the two technologies have “a synergistic effect” in soybeans that boosts crop yields, he said.

“DuPont has attempted to work in good faith through the mediation process that Monsanto requested,” DuPont said in the statement. “We fundamentally disagree with Monsanto’s position that they can use their current trait monopoly to prevent the introduction of competitive seed products for U.S. growers.”

Monsanto genetics, including licenses to rivals, were planted on 88 percent of the global biotech area last year. Monsanto last year had 36 percent of U.S. corn-seed sales and 29 percent of soybean sales, topping DuPont, which had 29 percent and 24 percent, respectively, according to UBS AG.

Share Performance

Monsanto rose 85 cents, or 1 percent, to $89.85 at 4:15 p.m. in New York Stock Exchange composite trading. DuPont, based in Wilmington, Delaware, dropped 33 cents, or 1.1 percent, to $29.07.

DuPont said last month it plans to include Roundup Ready genetics in its Optimum GAT soybeans to meet its standards for resistance to glyphosate, the generic name for Roundup weed killer. DuPont “is misusing the Roundup Ready trait to mask problems” with its Optimum GAT technology, Monsanto said.

The lawsuit may be a tactic to pressure DuPont to boost royalty payments for Roundup Ready genetics, said Laurence Alexander, a Jefferies & Co. analyst in New York. DuPont, one of hundreds of seed producers that license Roundup Ready traits, pays Monsanto more than $200 million a year to use the technology, he said.

Market Share

“I think it’s a market-share play,” Paul Baiocchi, who helps manage $1.5 billion as senior market strategist at Delta Global Advisors, said by telephone from San Francisco. “Monsanto is trying to discredit DuPont’s product in the marketplace.”

Mark Gulley, a New York-based analyst at Soleil Securities, said Monsanto has legitimate concerns that its Roundup Ready brand could be hurt if DuPont uses the trait in an unauthorized manner that produces inferior crops. Monsanto spent $980 million on research and development last year.

“You make that kind of investment, you need to defend it,” Gulley said by telephone. “They are protecting their brand equity, their reputation.”

Sales of Optimum GAT soybean seed will be less than $100 million a year, and Optimum GAT corn seed revenue should exceed $400 million, DuPont said in a March 10 presentation.

GAT Seeds

GAT seeds were intended to end DuPont’s reliance on Monsanto genetics by using a proprietary technology that allows crops to detoxify glyphosate. Monsanto’s Roundup Ready trait produces an enzyme that acts as an alternative food-production pathway, allowing crops to survive as weeds are starved.

GAT stands for “glyphosate ALS tolerant,” because the seeds tolerate glyphosate and so-called ALS herbicides, including sulfonylurea. Roundup Ready seeds resist only glyphosate.

More than 147 million acres globally were sown with Roundup Ready soybeans last year, including 72.5 million acres in the U.S., Monsanto said in an Oct. 8 report. More than 68 million acres in the U.S. were planted with Roundup Ready corn.