This piece has been authored by Aryan Dalal, 3rd Year, Hidayatullah National Law University, Raipur
Introduction
In the ever-evolving intersection of intellectual property rights and agriculture, the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (hereinafter “the Act”), emerges as a pivotal legal framework in India. Enacted to navigate the delicate equilibrium between the interests of breeders, researchers, and farmers, this legislation stands as a linchpin in conserving diverse plant varieties while fostering agricultural progress. As we delve into the complexities of this legal landscape, a recent case involving PepsiCo’s exclusive rights to the FL 2027 potato variety serves as a lens to scrutinize the challenges in balancing corporate interests and farmers’ rights. This case offers crucial insights into the nuances of intellectual property dynamics in agriculture. Against this backdrop, this project aims to dissect the intricacies of the Act, examining its implications and the way forward for a harmonized intellectual property ecosystem.
“Intellectual Property Framework in Agriculture”
Overview of the “Protection of Plant Varieties and Farmers’ Rights Act, 2001”
India, being a member of the World Trade Organisation (WTO), has adhered to the “Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement” since its introduction in 1994. Under, the said agreement, member nations are required to establish patent protection for plant varieties, either by aligning their domestic laws with the agreement or by developing a distinctive legal framework, known as sui generis. In line with this, India opted for the latter approach and enacted the Act in 2001. The Act stands as a landmark legislation in India, designed to address the intricate dynamics between intellectual property rights, agricultural innovation, and the rights of farmers. Enacted in 2001, this comprehensive legal framework plays a pivotal role in conserving and promoting the development of diverse plant varieties, ensuring a delicate balance between the interests of breeders, researchers, and farmers.
Objectives and Safeguarding the Plant Varieties
At its core, the Act aims to safeguard plant varieties and recognize the rights of stakeholders involved in their development and cultivation. The Act provides a unique legal structure that allows farmers to save, use, and sell their produce, including seeds of protected varieties. One of the distinctive features of this legal framework is that it allows the farmers and any other person to file opposition to the registration of the variety. In addition to this, certain regulations govern packaging and labelling to prevent unauthorized use or misrepresentation One of the primary aims of the act is to foster the development of novel plant varieties and inculcate the spirit of innovation. By protecting the rights of breeders and researchers, the Act encourages the development of new plant varieties, fostering innovation in the agricultural sector.This is particularly crucial in a country like India, where agriculture is a significant contributor to the economy, and diverse plant varieties are essential for ensuring food security and sustainability.
Navigating restrictions
The Act outlines infringement in the form of a non-registered agent or licensee who engages in the sale, exports, imports or produces a protected plant variety without breeder’s permission. In other words it gives exclusive rights to the breeder or his successor. The Act outlines infringement, who not being a registered agent or licensee, engages in the “sale, exports, imports or produces a protected variety without the breeder’s permission”, only gives the exclusive rights to the breeder or his successor.This mechanism acts as a deterrent against the unauthorized use of plant varieties, ensuring that the rights granted under the Act are respected and upheld.
Guardians of Compliance: Establishment and Role of the Authority
The “Protection of Plant Varieties and Farmers’ Rights Authority” (hereinafter “the Authority”) was established to further strengthen the implementation of the Act. Operating under the Ministry of Agriculture and Farmers Welfare, the Authority acts as the regulatory body responsible for overseeing the enforcement of the Act. Its role is pivotal in ensuring that breeders, researchers, and farmers have a reliable mechanism to protect their rights in case of violations.
Beyond legal intricacies, the Act is a testament to India’s commitment to promoting a balanced and sustainable agricultural ecosystem in line with the TRIPS Agreement. By acknowledging and protecting the rights of farmers, the Act aligns with the socio-economic realities of a predominantly agrarian society. Simultaneously, it provides the necessary incentives for breeders and researchers to invest in the development of new plant varieties, contributing to agricultural growth and resilience.
Brief Background of the case
In 2016, PepsiCo, secured exclusive rights of FL 2027 potato variety , which is used in making the Lay’s potato chips. This was the beginning of a complex legal battle involving intellectual property laws in India and other regulatory agriculture and food laws in the country.
PepsiCo’s FL 2027 potato variety
This type of potato was first cultivated in the USA by a R.W Hoopes who was employed by PepsiCo. This type of potato is used by PepsiCo to make Lay’s and is a significant component because it is dry and low in sugar content. It boasts lesser moisture content as compared to the normal potatoes’. This was registered in the USA in 2005. PepsiCo applied for its registration in India in 2011, which was granted in 2016. In the year 2016, Indian farmers cultivated the FL 2027(commercial name is FC5) under a contractual agreement with PepsiCo. Under the said agreement the farmers have to sell the said potatoes to PepsiCo at a pre-determined price.
Farmers’ Backlash, Withdrawal, and Ongoing Dispute
In 2019, PepsiCo India initiated legal action against farmers from Gujrat, alleging that the said farmers infringed upon PepsiCo’s exclusive rights over the potato variety. They alleged infringement under the Act, and sought damages to the tune of Rs. 1 crore to 2 crore. This triggered widespread protests by farmers and activists across the country and people even called for boycotting PepsiCo products. Many farmers even wrote to the Government of India, asking to intervene in the matter. This, therefore became a focal point in the larger discourse on IPR in the agriculture sector.
Amidst the protest, PepsiCo withdrew all the cases, citing discussions with Government, which was centred around long-term resolution of seed production issue. This withdrawal was seen by many as a significant development, signalling a potential shift in the approach towards farmer rights and intellectual property issues.
However, problems were only beginning to start for the FMCG giant, as a farmer activist Kavitha Kuruganti (associated with ASHA) filed before the Authority to revoke PepsiCo’s registration for FL 2027 potato variety. Under the provisions of the law, registration grants the breeder or their successor, agent, or licensee an exclusive entitlement to engage in activities such as production, sale, marketing, distribution, import, or export of a particular variety. Therefore, registration of the potato variety becomes extremely crucial for PepsiCo.
PepsiCo’s Patent Scrutinized: From Grant to Revocation
The Authority decided to revoke PepsiCo’s patent on December 3, 2021, citing procedural lapses, inaccurate information, and public interest concerns. The revocation was grounded in the violation of Section 34 of the Act, emphasizing incorrect information furnished during the registration process.
Procedural lapses and inaccurate information
The Authority’s decision to revoke PepsiCo’s patent, was grounded in several key factors. The authority identified procedural lapses in PepsiCo’s application process, emphasizing the importance of accurate and transparent documentation during the registration of plant varieties. Incorrect information provided by PepsiCo during the registration process played a crucial role in the decision, highlighting the significance of adherence to legal requirements.
Violations of Public Interest Considerations
Beyond procedural and informational aspects, the revocation underscored concerns related to public interest. The Authority, in its decision, took into account the potential hardships faced by farmers due to baseless infringement claims. This consideration aligned with the broader goals of the Act, which seeks to balance the interests of breeders and farmers while promoting agricultural development.
Section 34 of the Act: Legal Basis for Revocation
The legal grounds for the revocation, as outlined by the authority, were rooted in Section 34 of the Act. This section delineates the circumstances under which the protection granted to a breeder may be revoked. In the present case, the violation of Section 34, pertaining to incorrect information provided during the registration process, formed the crux of the authority’s decision. The careful examination of legal provisions highlighted the scrutiny applied to uphold the integrity of the intellectual property framework. As a consequence of these developments, the Authority contemplated reassessing the application in accordance with Section 34(a), (b), (c), and (h) of the Act, leading to the revocation of the certificate by the authority.
“34. Revocation of protection on certain grounds.—Subject to the provisions contained in this Act, the protection granted to a breeder in respect of a variety may, on the application in the prescribed manner of any person interested, be revoked by the Authority on any of the following grounds, namely:—
(a) that the grant of the certificate of registration has been based on incorrect information furnished by the applicant;
(b) that the certificate of registration has been granted to a person who is not eligible for protection under this Act;
(c) that the breeder did not provide the Registrar with such information, documents or material as required for registration under this Act;
(h) that the grant of the certificate of registration is not in the public interest,
Revocation upheld by Delhi HC
After the order of revocation by the Authority, PepsiCo challenged the said order before the Delhi. High Court, Justice Navin Chawla dismissed the appeal filed by PepsiCo and upheld the revocation of registration. The court’s rejection of the appeal lay emphasis on Section 34 sub-section (a).
New Variety Vs. Extant Variety: Difference in terms of Novelty
The court pointed out the fact that PepsiCo had given the date of commercialisation FL 2027 in India in December, 2009. However, this is contrary to the fact that many years after allowing for its commercialisation, PepsiCo, sought registration of the potato variety on February 16, 2012 as “new variety”. The inference which can be drawn from the facts above is that, although commercialisation of it was started in 2009, PepsiCo had filed for registration as a new variety afterwards. This difference is of upmost importance when dealing with intellectual property rights infringement. Further, if “new variety” is applicable, it must adhere to the criteria of novelty. Further, if a “new variety” is applicable, then it has to conform with the criteria of novelty . To satisfy the criteria of novelty it is required that the harvested material(in this case potato) is not sold in India one year prior to the date of filing of application for registration. Since, PepsiCo had failed the novelty test, the court opined that it could only be granted registration as an “extant variety”. The want for classification of such variety is uniformity, stability and distinctiveness but not novelty.
Misleading Information
PepsiCo provided an inaccurate first date of sale, stating it was December 17, 2009, whereas the variety had already been commercialized in 2002 in Chile.Thus, the certificate was obtained on the basis of inaccurate information provided by the applicant.
Implication for Intellectual Property Rights
This judgment by the Delhi HC highlights the importance of farmers’ rights within the umbrella of Intellectual Property Rights. The test of novelty and wrong material facts put at the time of registration, were deciding factors in the case. This ruling underscored that farmers maintain specific rights to cultivate and trade seeds of a extant variety.
Division Bench: Reversing the Revocation
High Court’s decision to reinstate PepsiCo’s application
In a significant set of events, a Letter Patent Appeal(LPA) filed by PepsiCo and the matter came before the division bench of Justice Yashwant Verma and Justice Dharmesh Sharma. The bench in their judgment allowed for the renewal of registration. The bench observed that incorrect mentioning of first date of sale and non-submission of relevant documentation is no sufficient ground in invalidating the eligibility PepsiCo to apply for registration. Further, first sale did not provide additional benefits to PepsiCo. However, it agreed with the learned single judge so far as classification of “new” and “extant” variety, however, the mistake of styling was remediable.
Petitioner’s limited substantiation
The appellant-respondent(in the present case; petitioner initially) failed with regards to the assertion that PepsiCo’s initiation of multiple lawsuits infringed upon farmers’ rights under the Act, the court holds the view that the petitioners needed to demonstrate that PepsiCo had undertaken the actions with the sole purpose of “pressuring and intimidating farmers”. Moreover, the petitioners failed to substantiate that these suits were grounded in entirely baseless allegations. The court noted that the petitioners failed to establish that these legal actions by PepsiCo were vexatious or strategically initiated as part of PepsiCo’s predatory manoeuvres.
Legal respite: High Court’s ruling safeguards special lays potato variety
The renewal application for PepsiCo’s patent has been returned to the registrar for revaluation, marking a positive outcome for the company. However, this legal event highlights the intricate challenges in safeguarding intellectual property rights within the agricultural domain, emphasizing the nuanced equilibrium required between corporate interests and the rights of farmers.
Conclusion and Way Forward
Way Forward :
Nurturing a Balanced Intellectual Property Ecosystem
As we navigate through the intricate landscape of intellectual property rights (IPR) in the agricultural sector, it is imperative to chart a course forward that harmonizes the interests of corporate entities, farmers, and the broader public.
- Revaluating patenting criteria: Looking ahead, it becomes imperative to reassess the standards for awarding patents on plant varieties. Guaranteeing a rigorous yet fair procedure will deter the abuse of intellectual property rights. Precise instructions regarding the submission of correct and thorough details during the registration process can maintain the integrity of the patent system.
- Facilitating dispute resolution mechanisms: Creating effective mechanisms for resolving disputes is essential. Utilizing alternative dispute resolution methods, along with providing platforms for dialogue between corporations and farmers, can aid in achieving prompt and equitable resolutions. This proactive approach has the potential to prevent prolonged legal conflicts, thereby minimizing challenges for all parties involved.
- International collaboration: Considering the global nature of agricultural markets, encouraging international collaboration on intellectual property rights (IPR) in agriculture is crucial, aligning with the TRIPS Agreement. Sharing best practices, harmonizing standards, and learning from diverse experiences can contribute to a more cohesive and effective framework for intellectual property, in line with the principles outlined in the TRIPS Agreement.
Conclusion
In this complex landscape of intellectual property rights and agriculture, the current case has presented an array of legal insights. The dispute, marked by lawsuits, revocations and court battles, shows that there is a need for balancing corporate interest and the rights and demands of the farmers.
One of the central issue regarding the dispute was PepsiCo’s compliance(or non-compliance) with statutory regulations. The verdict elucidates, that there is need for more stringent adherence to procedural norms in IP registrations, emphasising legal obligations that accompany the rights. In essence, the PepsiCo case serves as a case study, unravelling the multifaceted layers of intellectual property dynamics in the agricultural landscape. As stakeholders grapple with evolving challenges, this landmark decision adds to the ongoing narrative of harmonizing innovation, corporate interests, and the welfare of those at the heart of agriculture – the farmers.