Delhi High Court restrained Indian firm Nuziveedu Seeds from selling Bt cotton seeds using the trade-mark of US-based agro major Monsanto’s Indian arm Mahyco Monsanto biotech Ltd(MMBL).The justice asked the Hyderabad based seed company to pay royalty to MMBL, a joint venture between US-based Monsanto and Mahyco, after selling the old stock manufactured prior to November 2015. The bench restrained Nuziveedu Seeds from selling seeds manufactured after November last year when the license agreement was terminated. MMBL had terminated the license agreements of Nuziveedu and its group companies on account of continued refusal to pay contractually agreed trait fees amounting to more than Rs 165 crore. MMBL has also approached the Bombay High Court over non-payment of about Rs 400 crore of royalty fees by some Bt cotton seed manufacturers including Nuziveedu.

Genetically Modified Organisms (GMOs) breed controversy like no other. Little wonder then that Monsanto’s much-maligned Bt cotton has spawned the mother of all intellectual property (IP) disputes in India, involving at least 15 different proceedings in various courts, government agencies and tribunals at last count. Most proceedings appear to have come at the behest of certain seed companies led by Nuziveedu. Its founder, Prabhakar Rao, is leaving no stone unturned to ensure that these seed majors beget a better deal than what they bargained for when they first contracted with Monsanto to licence its proprietary GM technology. A recent controversy centers around which of the two IP regimes governs the dispute: the Patents Act or the Protection of Plant Varieties and Farmers’ Rights Act (PPVFRA). I think, this appears to be a false dichotomy and a red herring of sorts. Both these legislations apply and one does not necessarily trump the other. Let’s discuss some facts to better describe the need of co existence of both the companies.

  • Monsanto patented a number of components related to Bt cotton, a biotech invention involving the infusion of the Bt gene into the cotton genome. Bt stands for Bacillus thuringiensis, a bacteria whose genome codes for a protein that kills the bollworm, a pest that has perennially plagued the cotton plant. The patent does not cover the plant itself, as plants and animals are ineligible for patent protection in India, as are ordinary biological processes for creating them. However, microbiological processes and microorganisms are patentable under the terms of the Indian Patents Act, and Monsanto’s patents cover most of these components. It bears noting in this regard that Bt cotton technology was never static, but evolved over time to cater to the pest resistance that soon developed.
  • Using the patented technology, Monsanto created a host of donor Bt cotton seeds and distributed them to seed companies under specific agreements mandating the payment of royalties. Seed companies in turn used these donor seeds to initiate the desirable genetic trait into their own specific hybrid varieties by backcrossing.
  • Monsanto’s patents cover various components of the technology embedded in the donor seeds handed out to seed companies. Any seed company that uses this donor seed and creates a new plant variety is entitled to register such variety under the PPVFRA.
  • Section 66 of the Patents Act has been invoked, an exceptional provision that provides for revocation on grounds that the patent is “mischievous to the state or generally prejudicial to the public”. The key contention appears to be that the patent is no longer effective, given the pest resistance that developed over time. A ground not likely to pass musters with a court of law, given the rather high bar for invoking Section 66. Quite apart from the fact that it appears a tad bit paradoxical that while one wing of the government (the Ministry of Agriculture) has recently issued a draft notification qualifying GM technology as an industry “standard” that must mandatorily be licensed on FRAND (Fair, Reasonable and Non-Discriminatory) terms to as many seed companies as possible, another one (DIPP) insists that the technology is useless!
  • The Ministry of Agriculture, with no proven expertise or jurisdictional competence over patent issues, would go out on a limb and suggest (in an official draft notification no less) that Monsanto’s patents over upstream GM technology must necessarily yield to downstream plant variety rights.
  • There may be merit in regulating GMO patents, this must be done after following due processes under the law, through the relevant competent authority , and not through abusive lawmaking designed to seemingly favour one set of stakeholders who are essentially engaged in a private commercial dispute.

Considering the above facts one wonders why the government chooses to concentrate all of its eggs in the Bt cotton basket. I think our government should be encouraging a diversity of approaches in Indian agriculture, entailing both GM technology and the more traditional processes that have stood the test of time.