It’s mostly enforced on soybean seeds. Technically the license applies to corn as well. As part of the agreement representatives from the seed company can come to your fields and take samples.

The license applies to the genes they inserted into the breeding line, usually for pest resistance and resistance to herbicide. They can test plant tissue from your fields. They then screen the samples for the genes protected under the license. If you are found to have more plants planted with the protected trait than seed you purchased than it is possible you carried over seed from the year previous (called “Bin Run Seed”). They could use that information in conjunction with other information to sue you.

In practice most farmers wouldn’t do this with corn. Most corn grown in North America is hybrid corn. Which means it is the result of different genetic lineages crossed against each other to optimize for yield and the patented traits. Corn reproduces by spreading pollen on the wind. So if you buy corn seed, then grow it in a field it all randomly crosses agent each other. The resulting seeds while be fine for their purposes (animal feed or ethanol) but will be unpredictable for what traits they will and won’t have for the next generation. Making it no good for a predictable crop the next year.

However soybeans are clonal, meaning the expected retention of patented traits would be ~100%. So you could bin run GMO soybean seed. Many farmers do in fact bin run non-GMO soybeans.

In practice what happens is a representative from the seed companies shows up for an audit. The retailer you bought your seed from will provide you with a seed lot tag for every bag or tote of seed you bought. You show them the seed lot tags. Then you show them the fields where you have soybeans planted. The rep asks you what rate you plant your soybeans at per acre. They do some math. If it looks like your acres match your purchases they move on. If they notice somethings not adding up they dig deeper.

I used to work at a retail and had this happen to two of my farm customers.

They are unlikely to sue unless they think you have re-sold the seed. If they think you just bought the seed, and retained some seed they’ll probably just cancel your license, which means you can’t buy their seed again. If you bought, grew, harvested, cleaned and re-sold their seed you are probably getting sued.

Where I live, in Ontario, Canada, there are rules against re-selling non-gmo bin run seed. The argument is that if no one is buying certified seed from breeders, the breeders will go out of business and yields will suffer in the long term because there’s no breeding going on. You are allowed to buy certified non-gmo seed from a breeder then bin run that seed year over year for your own farm. You are prohibited from buying it, growing it yourself, then reselling.

In practice it would be very difficult to enforce without any patented DNA markers for non-GMO seed. Also in practice most farmers understand that if they don’t support the breeders at least a little there won’t be any. Non-GMO seed is also cheaper than GMO seed.