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Photo: Bloomberg.
Photo: Bloomberg.

Opinion | SC Bt cotton verdict is relief for Monsanto

The SC's suggestion that all aspects related to Monsanto's patents on GM seeds can be considered could allay apprehensions of technology developers over losing pricing freedom

The Supreme Court’s restoration of Monsanto’s patent claim on Bt cotton till its validity is decided by the Delhi high court ought to reassure biotech companies that had held back on introducing new technologies in India after the controversy over genetically modified (GM) cotton erupted. The fact that the patent held by Monsanto—now Monsanto Bayer—over its Bollgard-II Bt cotton seed technology will be enforceable dispels some of the regulatory fog around the patentability in India of biotechnological processes, such as DNA tweaks. Protecting intellectual property rights is vital to improving the competitiveness of the Indian farmer, and the Supreme Court’s suggestion to the Delhi high court—a division bench of which had ruled that life forms cannot be patented—that all aspects related to Monsanto’s patents on genetically modified seeds can be considered could allay apprehensions among technology developers over losing pricing freedom in India.

The regulatory issues surrounding biotechnology in India, however, are not restricted to upholding intellectual property rights. The government has capped royalty payments to Monsanto and asked it to grant licences to more seed companies for using Bt cotton. Indian seed companies pay a government-mandated trait fee, as such royalty is called, on genetically modified seeds. Multinational biotechnology companies are naturally chary: Monsanto has held back other Bt cotton varieties from India and Bayer has gone slow in introducing a hybrid rice seed that can withstand flooding for two weeks. Moreover, regulatory clarity over field trials for genetically modified seeds is overdue. A moratorium on field trials for Bt brinjal, for instance, is in its ninth year and the government wants more research done for GM mustard, which involves more field trials that, in turn, await permissions from state governments. This week’s judicial validation of safeguards for private investment in agricultural research is unlikely to spur multinational biotechnology companies into pouring money into India.

The verdict should prod India, the world’s biggest producer of cotton, to encourage innovation in agriculture. For Monsanto, which faces global suspicion about its genetically modified organisms, the ruling is a vindication, apart from ensuring returns on its Indian investments. For Nuziveedu Seeds, which had approached the court seeking Monsanto’s patent be cancelled as its seeds had distinct characteristics and no royalty needed to be paid by it despite the licensing agreement, the issue is still to be decided by the Delhi court. Once the legal position on the issues raised by protracted litigation is resolved, Indian policymakers must turn their attention to crafting a more welcoming environment for farm research. Agriculture, despite its dipping contribution to gross domestic product, remains central to a wide swathe of interventions by both the federal and state governments, and the removal of regulatory knots for improving farm productivity needs a more enthusiastic approach than it has received so far.

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