Name of the Case: Nuziveedu Seeds Ltd. and Ors. v. Monsanto Technology LLC and Ors.
Mahyco Monsanto Biotech Pvt Ltd, the Indian joint venture of Monsanto and Maharashtra Hybrid Seed Company was licensing its BT products to various Indian seed companies including Nuziveedu and its subsidiaries. Monsanto licensed its patent IN214436 titled “Methods for Transforming Plants to Express Bacillus Thuringiensis Deltaendotoxins” relating to BT cotton for a preliminary period of 10 years for a recurring trait-value compensation along with lifetime fee of Rs. 50 Lakhs. The seeds patented were immune to boll-worm attacks due to the presence of Cry2Ab, a gene present in BT, a Nucleic Acid Sequence (NAS) when inserted into the DNA of a cotton plant cell destroyed the boll-worm, therefore resulted in superior quality yield. But when the local laws relating to trait fee on cotton were amended dispute arose between the two establishments.
Facts of the Case
1. Monsanto and Nuziveedu Seeds along with its subsidiaries entered into a licensing agreement on 21-02-04.
2. Using the patented technology Monsanto created a various donor BT cotton seeds which were later distributed among domestic seed companies including Nuziveedu and its subsidiaries for the purpose of introducing desirable genetic traits into their hybrid varieties by back crossing and paying royalty for the same.
3. In order to create an effective pricing system and to ensure availability to farmers at a fair and affordable price and for a uniform regulation of existing and future GM technologies, the State Government fixed the MSP and imposed a trait value which was lower than the contractually agreed trait value by Monsanto and its subsidiaries.
4. Nuziveedu refused to pay license fee in terms of the agreements with Monsanto, stating that legally they were obliged to pay no more than the trait value set by the State Government. Although renewed in 2015 unfortunately it was terminated on 14-11-15.
5. Monsanto sued Nuziveedu and its subsidiaries and sought for an ad interim injunction, for marketing and selling the genetically modified hybrid cotton seed which were patented and also restrained them from using its trademark “BOLGARD” and “BOLGARD II”.
6. On the other hand, Nuziveedu argued the legality of the subject patent stating that it was not patentable as per Section 3(j) of The Patents Act, 1970.
Issues of the Case
1. Whether there was infringement of patent and trademark?
2. Whether ad interim injunction be granted or not?
Legal Principles Applied
1. Section 3(j) of Patents Act, 1970: Excludes from patentability, “plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.”
2. Section 48 of Patents Act,1970: A patent granted under this act shall confer upon the patentee- “where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India.”
3. Section 64 of Patents Act,1970: “Subject to the provisions contained in this act, a patent, whether granted before or after the commencement of this act, may be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of given grounds.”
4. Article 27(3) (b) of TRIPS Agreement: “Members may also exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof.”
Analysis of the Case
The single judge of the Delhi High Court directed Monsanto to continue supplying BT Cotton seeds in accordance with the 2015 sub-license agreement except as to the rate of the trait fee, which would be payable according to the local laws. But this is a clear violation of the contract signed by the parties as they had agreed on payment of a certain amount of trait fee without any exception clause relating to change in local laws.
Further, in my opinion cancellation of the patent by the Division Bench of the Delhi High Court is not justified because according to Section 3(j) one cannot patent a plant, an animal or a biological process but the subject patent is a biotech invention encompassing the infusion of the BT gene into the cotton genome which includes human intervention and is artificial in nature. Moreover, according to Rule 26(5) of EPC “a process for the production of plants or animals is essentially biological if it consists entirely of natural phenomenon such as crossing or selection.” Hence, the patent is valid and the decision of the bench seems inapt.
Every country signatory to the TRIPS agreement is under an obligation to fulfill the provisions of Article 27(3) (b) which implies that “the countries have to protect plant varieties either under patent law or through an effective sui generis law or a combination of both.” Thus making an essential public policy decision.
Hence, when the case was appealed in the Supreme Court of India for further scrutiny and analysis, the Court stated that consideration of Section 64 of The Patents Act, 1970 and Section 9 of Civil Procedure Code, 1908 is essential before a patent is revoked and remanded the case to the single judge for disposal. By doing so it let go of an excellent opportunity to set an unprecedented example owing to the unique circumstances of the case.
The Supreme Court in its judgement made it clear that matters relating to intellectual property such as patents cannot be decided on the basis of summary and the matter must be heard intricately backed by expert advice if necessary. This way it would allow institutions to innovate and protect their creations within the legal framework of the land.
- Nidhisha Garg, ‘Monsanto v. Nuziveedu: A Missed Opportunity by the Supreme Court?’ (Kluwer Patent Blog, 27 Jan 2020), http://patentblog.kluweriplaw.com/2020/01/27/monsanto-v-nuziveedu-a-missed-opportunity-by-the-supreme-court/?doing_wp_cron=1589970367.6787729263305664062500, accessed17 May 2020.
- ‘Monsanto v. Nuziveedu Patent Dispute: A brief Analysis of Judgement’, (Invntree, 15 May 2018), https://www.invntree.com/blogs/monsanto-vs-nuziveedu-patent-dispute-brief-analysis-of-judgement, accessed 18 May 2020.
- ‘What the Supreme Court said in its BT Cotton Judgement’, (The Wire, 9 Jan 2019), https://thewire.in/law/bt-cotton-monsanto-nuziveedu-supreme-court, accessed 17 May 2020.
- Divyanshi Arora, ‘Monsanto v. Nuziveedu seeds: The BT Cotton Judgement’, (Khurana and Khurana, 2 May 2019), https://www.khuranaandkhurana.com/2019/05/02/monsanto-vs-nuziveedu-seeds-the-bt-cotton-judgment/, accessed 18 May 2020.
- Dias Michelle Jerry, ‘Monsanto v. Nuziveedu’, (Khurana and Khurana, 8 June 2019), https://www.khuranaandkhurana.com/2019/06/08/monsanto-v-nuziveedu/, accessed 18 May 2020.
AIR 2019 SC 559