Bt Cotton: A Case of Regulatory Capture

In India, the creation of a new plant variety by any breeder, whether a seed or a biotech research company or an individual farmer, is protected under the Protection of Plant Variety and Farmers Right Act, 2001 (“the PPVFR Act”).  Mr. Essenese Obhan. Mr. Obhan is the Managing Partner of Obhan & Associates, a reputed IP law firm in Delhi. He has both a law and an engineering degree, and has been consistently ranked by multiple international agencies as one of India’s leading patent attorneys.

What is transgenic plant variety?

A transgenic plant variety is a plant variety that has one or more genes from a foreign organism, such as bacteria, incorporated in it by a biotechnology process in a lab. These genes confer certain additional ‘traits’ to the plant variety. Once a transgenic plant variety is developed and approved for release in to the environment, other transgenic plant varieties can be created from it by transferring the relevant genes to other plants by natural biological processes, such as selecting and crossing of plants.

Ordinarily, a transgenic plant variety ought to be registrable under the PPVFR Act so long as it satisfies the NDUS criteria (Novelty, Distinctiveness, Uniformity and Stability). To register a transgenic variety, additionally, the Authority requires an applicant to submit a No Objection Certificate (“NOC”) obtained from the entity that first introduced the gene into the plant. In the case of Bt cotton, that entity is Monsanto, and every Indian breeder who has since wanted to protect a new Bt plant variety has had to obtain an NOC from Monsanto as part of its application for registration. As it turns out, Monsanto has rarely offered an NOC unconditionally. As a result, Indian breeders who want to register a new Bt plant variety must enter into an agreement with Monsanto in exchange for the NOC, an agreement that the Indian seed companies find exploitative.

The Legal Position

On 1 September 2015, the Authority issued a public notice that the general guidelines for registration of essentially derived varieties was approved in its 23^rd Meeting held the previous month. These guidelines introduced the NOC requirement under section 23 of the PPVFR Act read with Rule 35. Strangely enough though, the Authority had been demanding such NOCs since at least 2009, at least six years before the Authority purportedly approved the requirement in its 23^rd Meeting. Further, Section 23 read with Rule 35 relates to the manner of testing essentially derived varieties, and the connection of such a legal provision with an NOC requirement is tenuous, to say the least.

Elsewhere, in response to an RTI query, the Authority claimed that the NOC requirement was stipulated under Section 18 of the PPVFR Act, and in particular, the requirement of declaration under Section 18, read with Section 20 and Section 23.

Section 18: forms of application

Section 18(1) (h): Every application for registration shall contain a declaration that the genetic material or parental material acquired for breeding, evolving or developing the variety has been lawfully acquired;

Section 18(1)(i): Every application for registration shall be accompanied by such other particulars as may be prescribed.

Section 18 is applicable to every application for registration. By extension, the requirement of ‘declaration’ under Section 18(1)(h) would be for all varieties, and not just transgenic varieties.

It is also relevant to note that Section 18(1)(h) refers to a declaration to be made by the applicant, and does not require the applicant to obtain any form of “authorization” from a third party. Indeed, the PPVFR Act uses the terms ‘authorization’ and ‘declaration’ in various provisions for different purposes. The word “declaration”, as commonly understood, means “making an official statement about something”, and cannot arguably be stretched to mean obtaining permission or an NOC from the creator of a trait.

Section 18(1)(i) require that additional information as may be ‘prescribed’ may also be required to be submitted in the application for registration. But whatever is “prescribed” must necessarily be prescribed under the rules made under the PPVFR Act (Section 2(q)).

NOC requirement

The NOC requirement also has a number of harmful consequences:

Firstly, Section 8 of the PPVFR Act casts a duty on the Authority to promote development of new varieties and to protect the rights of the farmers and the breeders. An NOC requirement arguably discourages breeders from creating new transgenic varieties and suppresses farmers’ and breeders’ rights, instead of protecting them.

Secondly, the NOC requirement has serious consequences for the benefit sharing provisions under the PPVFR Act. Under Section 26 read with Rule 43 of the PPVFR Act, any person or group of persons or firm or governmental or non-governmental organization can submit its claim for benefit sharing on the commercialization of a hybrid or variety developed using a plant variety containing the originally developed Bt trait.

An NOC also causes loss of revenue to the Authority. Under section 35 of the PPVFR Act, the Authority may impose a fee to be paid annually by every breeder of a variety, agent and licensee registered under the PPVFR Act.

The requirement of an NOC also causes loss of revenue to the National Gene Fund (“NGF”) constituted under Section 45(1) of the PPVFR Act. A key contributor to the NGF is the benefit sharing amount received from the breeder of a variety. The NOC requirement enables a trait provider to by-pass the NGF causing significant loss of revenue to it, and obstructs the fulfillment of the NGF’s objectives.

Lastly, the requirement of an NOC reduces the dignity of the Authority by making it an agency of a private party.