IP Valuation

Analysis of Protection of Plant Varieties and Farmers Rights Act, 2001 in Light of Judicial Decisions Laid Down by the Indian Courts

The Protection of Plant Variety and Farmers Rights Act, 2001 (PPVFRA) is a legislation that provides for the establishment of an effective system for the protection of plant varieties, the rights of farmers and plant breeders and to encourage the development and cultivation of new varieties of plants. The Act introduced intellectual property protection in Indian agriculture.

The Inception and Objectives of this Legislation

The Indian government and the public sector had always been concerned with the development of new plant varieties and agricultural research, and earlier there was no legislation the in-country to protect the new varieties. In 1994, India became a signatory to the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS), which laid the foundation for the inception of the PPVFRA. This was because Article 27.3 (b) of the agreement necessitates member nations to protect plant varieties either by a patent or by an effective sui generis system, or by any combination thereof. Hence, the members had the choice to draft legislation suiting their own domestic framework and India exercised this option.

Since the Indian Patent Act, 1970 did not provide for agricultural or horticultural methods of production and India rejected the framework of plant breeders’ rights given by the International Union for Protection of New Plant Varieties (UPOV Convention), the PPVFRA was enacted under the sui generis system. This was enacted to protect plant varieties by integrating the rights of breeders, farmers, and village communities. Moreover, it also took note to scrutinize equitable sharing of benefit and offered flexibility with regard to protected species, level, and period of protection, when compared to foreign legislations on the same subject. While the Act does cover all plant categories, it does not include microorganisms.

The act aims to recognize and protect the rights of farmers by taking into consideration the contribution made by them at any time in conserving, improving, and increasing the availability of plant genetics for the development of new plant varieties. It also bolsters agricultural development in the country by protecting plant breeders’ rights and stimulating investments for R&D in both public and private sectors for innovation and creation of new plant varieties. Moreover, it facilitates the development of the seed industry, ensuring the availability of high-quality seeds and planting material to the farmers.

Analysis

The following is a brief discussion and analysis of the various developments in the PPVFRA in light of these prominent judicial decisions.

1. Ambiguity Regarding Sale and Propagation of Hybrid Seeds

In Maharashtra Hybrid Seed Co and Anr v. Union of India and Anr [(2015) 217 DLT 175], the petitioners impugned Registrar, PPVFR Authority’s order which held that parent lines of known hybrid varieties cannot be registered as ‘new’ plant varieties under the PPVFRA. It was held that if the hybrid falls under the category of ‘extant variety’ about which there is common knowledge, then its parental lines cannot be treated as novel.

There were several issues regarding certain provisions in the Act which the Delhi HC clarified, the first one being that a hybrid seed does not fall within the definition of ‘propagating material’ as it is incapable of regenerating any of the parent line varieties. While the Act does not define “harvested material”, “propagating material” has been defined under Section 2(r) of the Act defining it as a plant or a seed that is capable of regenerating.[i] Furthermore, the court held that the sale of hybrid varieties does not comply with Section 15(3)[ii] of the Act, in case of those varieties that may germinate into either parent plants, amounting to the exploitation of such plants. Going by the petitioner’s interpretation of the Act, they would gain exclusive rights over the hybrid and the parent seeds for a maximum of 45/54 years, which is significantly more than the period 15/18-year period provided in the Act.

The High Court used the mischief rule to decide against the petitioners even though the language of Section 15(3) is ambiguous. The court did so because it is well established that when there is ambiguity in the language of a statute, a purposive interpretation that furthers the intent of the Legislature must be adopted. The Legislative intent of the PPVFRA is to safeguard farmer’s and plant breeders’ rights. Moreover, the Administrative and Legal Committee of UPOV as per Article 6(1) of the 1991 Act of the UPOV Convention, had held in a similar dispute that the novelty of the parent lines is lost by commercial exploitation of its hybrid, and therefore such interpretations are not viable. India was obliged to protect the intellectual property rights of certain plant varieties since it had ratified the TRIPS agreement.

2. Mahyco Monsanto Biotech Ltd & Nuziveedu Seeds Ltd BT Cotton Seed [2018 SCC OnLine Del 8326] – Patentability Dispute

The Supreme Court in 2019[iii] set aside Delhi High Court’s (DHC) order, which stated that Monsanto Technology’s patents on BT cotton seeds are invalid since seeds cannot be patented under Indian IP laws. Monsanto sold genetically modified cotton in India in a joint venture with Maharashtra Hybrid Seeds Co, called Mahyco Monsanto Biotech (India) Ltd (MMBL). The dispute reached the court when Nuziveedu Seeds Ltd (NSL) continued to sell the genetically modified seeds even when MBBL had terminated its license with NSL. The Supreme Court ruled out the order of the division bench and restored the order of the single judge bench.

While the dispute between NSL and MMBL is long-standing and has been in litigation for years, the DHC in a dispute between the two, gave the landmark judgment in 2017 and held section 24(5) of the PPVFRA was broad, arbitrary, and sweeping. Section 24(5) reads “The Registrar shall have the power to issue such directions to protect the interest of a breeder against any abusive act committed by any third party during the period between the filing of Application for Registration and decision taken by the Authority on such Application.”[iv] The main issue contended by NSL was that the provision was ultra vires since it gives wide powers to the Registrar of PPVFR Authority and provides the de-facto right to the applicants which can be misused. The court held that the provision is broad and arbitrary, and not defining “abusive act” can provide a very broad range to acts that can be covered under its ambit. The court further stated that the claims of this provision are very inchoate when compared to other IP laws. Conclusively, the court stated that while it is an adequate remedy, it is susceptible to abuse and is also contrary to Article 14[v], hence declaring section 24(5) of the PPVFRA void.

3. PepsiCo vs Farmers – Trademark Dispute

The PPVFRA was heavily tested when PepsiCo India initiated legal proceedings against four farmers in Gujarati farmers asking for 1.05cr each for “illegally” growing its potato variety registered under the Act and violating its Intellectual Property Rights. The company said that farmers infringed its patent rights by growing the potato variety used in its product called Lays chips. PepsiCo has invoked Section 64 of the Act which prohibits anyone other than the breeder of seeds or a registered licensee of that variety to sell, export, import or produce such variety.

The pertinent question here is who can grow what crops under this IPR regime. PepsiCo had two hybrid varieties of two hybrid potato varieties, FL 1867 and FL 2027 in Feb 2016 for a period of 15 years, and the latter was marketed under the trademark FC-5. Although, planting a registered variety is not an offense per se under Section 39 of the PPVFRA, and the farmers took this defence as they were not selling branded seeds of the registered variety. PepsiCo did recall the case eventually, but it did present many questions directed at the Act. While the farmers could not sell “branded” seeds as per the Act, the FC-5 could be made available and distributed under the buyback system, without violating the law per se. The Commercial Court at Ahmedabad had extended an ex-parte ad-interim injunction on four farmers until June 2019 barring them from growing or selling FC-5. The notable developments were that the Gujarat government announced to back the farmers, which ended in an out of court settlement between the government and the company, leading to the latter withdrawing most of its cases.

The notable takeaway from this case is that FC-5 was registered as an “extant” variety, meaning that it existed before it was registered and there was common knowledge about it. But from PepsiCo India Holdings Pvt. Ltd. versus Bipin Patel[vi] it can be inferred that the company presented it incorrectly as a “new” variety instead of an “extant” one. The latter method of registration was criticized by experts since it gives companies the opportunity to register known varieties and then sue farmers for using them. Moreover, the case did highlight the ambiguity of the law in this regard and it became a matter of perspective since activists expressed that this can violate farmers’ rights, while this could cost the company significant losses as it generates massive amounts of revenue from annual sales of Lays.

4. Seed Regulation

In India, the quality of commercially sold seeds is highly unregulated because the Seed Act, 1966 lacks an adequate framework. The rapid changes in the seed and farming sector, like the growth of private seed companies and the progressive introduction of transgenic seeds, point towards the need for new regulation. The PPVFRA plays a prominent role in seed regulation in the absence of such a law.

The Apex Court in Emergent Genetics India (P) Ltd. v. Shailendra Shivam[vii], held that Indian farmers have been producing their seeds locally for millennia and a large majority of the population depends on agriculture for their livelihood and sustenance. Farmers and peasants produce around 75% of these seeds themselves. The PPVFRA provides certain safeguards for these farmers, giving them the right to use, save, use, exchange, share, sell, sow, or re-sow, farm produce which includes inter alia, seeds protected under the Act. The sale of any registered material by a breeder has to be disclosed to the farmer. This is done so the farmer can predict the performance, and claim compensation in case of failure to provide the same. Hence, the act does provide for a decent regulatory framework for areas that the Seed Act does not take up in its ambit. It also protects the integrity of agriculture by not allowing patent seeds, which if were the case would strip the poor farmers off their livelihood since major corporations would take over and feed off the royalty.

Conclusion

While Intellectual Property protection in the form of Plant-Based Rights has been providing monetary rewards to developers and corporations from developed nations, the same does not happen with developing countries which usually provide the base materials for breeding and research. Thus, farmers’ rights increased in demand to strike a balance between breeders and farming communities. Since India did take a bold stand and chose to enact its own regime instead of adopting the UPOV, it should continue to uphold the strengthening of the PPVFRA with the changing times. In the current age of rapid privatization of agricultural trade, the Act does recognize the contribution of traditional farming communities and their rights in land conservation and growing new varieties. But it should work towards fixing the loopholes in the Act while simultaneously framing a national seed policy that bolsters the Act.

The aforementioned cases highlighted the ambiguity of certain provisions of the Act, which have led to major disputes showing the discord between farmers’ rights and breeders’ rights. Safeguarding farmers’ rights become essential in a nation like India where agriculture is a dominant sector. While the act does aim to benefit farmers holistically, the demand for hybrid seeds by breeders will not benefit all farmers equally, since most of them depend on public sector breeders. The government needs to augment this sector, as the private sector is far more developed and advanced. The Act also needs to clarify the ambiguity between extant and farmers’ variety, which was seen in the PepsiCo case. Moreover, the new Seed Bill also needs to be framed in such a manner that it does not directly conflict with certain provisions of the PPVFRA, like the 2004 bill.

Though the Act has certain flaws, it is still remarkable legislation that does showcase that balance can be established between both stakeholders. With a growing Intellectual Property laws framework, there is a lot of room for development with more reforms in the current legislation and judicial interpretations. This along with establishing harmony between the PPVFRA, the Seed Bill, and the Biodiversity Act, will make this Act a model legislation for other countries to draw inspiration from.

This Article Can Be Cited As

Pranav Nayar, Analysis of Protection of Plant Varieties and Farmers Rights Act 2001 in Light of Judicial Decisions Laid Down by the Indian Courts, Metacept- InfoTech and IPR, accessible at https://metacept.com/analysis-of-protection-of-plant-varieties-and-farmers-rights-act-2001-in-light-of-judicial-decisions-laid-down-by-the-indian-courts/ . 


[i] Protection of Plant Variety and Farmers Rights Act, 2001 § 2(r)

[ii] Protection of Plant Variety and Farmers Rights Act, 2001 § 15(3)

[iii] Monsanto Technology LLC v. Nuziveedu & Ors AIR 2019 SC 559

[iv] Protection of Plant Variety and Farmers Rights Act, 2001 § 24(5)

[v] India Const. art. 14.

[vi] PepsiCo India Holdings Pvt Ltd versus Bipin Patel – Commercial Trademark Suit Number 23 of 2019, Commercial Court at City Civil Court, Ahmedabad;

[vii] Emergent Genetics India (P) Ltd. v. Shailendra Shivam 47 PTC 494 (Del).

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