Home / Companies / Supreme Court upholds Monsanto’s patent claim on Bt cotton seed

New Delhi: The Supreme Court on Tuesday restored Monsanto Co.’s patent claim on genetically modified (GM) Bt cotton until its validity is decided by a single judge of the Delhi high court.

As a result, the patent held by Monsanto over its Bollgard-II Bt cotton seed technology, a GM variant that resists the bollworm pest, will be enforceable in India for now.

A bench comprising Justices R.F. Nariman and Navin Sinha also restored the single judge’s order of 28 March 2017 that had dismissed Monsanto’s plea against Nuziveedu Seeds Ltd alleging that it was using technology patented by Monsanto even after termination of licence.

The single judge had directed Monsanto to continue with its obligations under sub-licence agreements.

With its ruling, the Supreme Court also set aside a 2 May order of the division bench of the Delhi high court, which had held that plant varieties and seeds cannot be patented under Indian law by companies such as Monsanto and that royalties on GM technology would be decided by a specialized agency of the agriculture ministry.

“We are satisfied that the division bench ought not to have disposed of the suit in a summary manner by relying on documents only, extracted from the public domain and not even filed as exhibits in the suit, much less examination of expert witnesses, in the facts of the present case," the apex court said.

“This (the order) will bring certainty in the policy environment. IPR, whether global or Indian, needs protection and this verdict is a shot in the arm for India’s agri-biotech industry that has been looking to improve Indian cotton farmer’s competitiveness," said Shivendra Bajaj, executive director, Alliance for Agri Innovation, which works to promote plant-breeding technologies.

The verdict validates that patents are integral to innovation, according to Dr M. Ramasami, chairman, Federation of Seed Industry of India.

On 28 March 2017, Justice R.K. Gauba of the Delhi high court observed that the issues arising in the suit necessarily required formal proof, particularly expert opinion, which in complicated matters such as patents were crucial for ascertaining the breadth of the monopoly granted by the specifications of a patent claim. The parties were asked to remain bound by their obligations under the sub-licence agreement.

Counter appeals against this order were brought before a division bench comprising Justices Ravindra Bhat and Yogesh Khanna by Monsanto and Nuziveedu. The division bench permitted Mahyco Monsanto Biotech (India) Pvt. Ltd (MMBL)—a 50:50 joint venture between Mahyco and Monsanto Holdings Pvt. Ltd—to approach the Protection of Plant Varieties and Farmers’ Rights Authority under the agriculture ministry for registering the variety within three months, following which the authority had to decide on a benefit-sharing mechanism.

The court had also directed Monsanto to continue with its obligations under the sub-licence agreements and allowed “the suit to proceed with respect to the claim for damages and other reliefs", in the light of the sub-licence termination notices issued by Monsanto.

The court’s order came in a case filed in 2015 by Monsanto, through MMBL, against Nuziveedu Seeds and its subsidiaries for selling Bt cotton seeds using its patented technology despite termination of a licence agreement in November 2015. The order and the court’s interpretation of section 3(j) of the Patents Act, 1970, could prove to be an impediment for the entry of new technology in the Indian agriculture sector as technology developers will lose pricing freedom.

Monsanto had appealed the order in the Supreme Court.

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