India: Supreme Court sets aside order in Monsanto case
Managing IP is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

India: Supreme Court sets aside order in Monsanto case

The new year brought new hopes for Monsanto with the Supreme Court setting aside a Division Bench order of the Delhi High Court dated April 11 2018 which held the Monsanto patent for Bt cotton invalid.

Background

The genesis of the dispute between the parties is a sub-licence agreement dated February 21 2004 in which Nuziveedu was authorised to develop "Genetically Modified Hybrid Cotton Planting Seeds" with the help of Monsanto's technology and to commercially exploit the seeds in the context of the limitations prescribed in the agreement. The agreement also provided for payment of a licence fee/trait value by Nuziveedu, for use of Monsanto's patented technology.

The agreement, after an extension, was ultimately terminated by Monsanto on November 14 2015 due to disputes regarding payment of licence fee/trait value in view of a subsequent price control regime introduced by the state. Monsanto filed a lawsuit (before a single judge of the Delhi High Court) and an injunction application a) to restrain the defendants from using their registered trade mark b) for violation of the registered patent during the duration of the suit in view of the termination of the agreement. The Court refused to grant an injunction and observed "that the issues arising in the suit necessarily required formal proof, particularly expert opinion". Nuziveedu filed a counterclaim seeking revocation of the patent, the primary argument being that Monsanto's patent claims violated Section 3(j) of the Patents Act which covers 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. On the counterclaim, the Court simply issued notice to Monsanto. Both sides appealed to the Division Bench of the Delhi High Court which heard the counterclaim of Nuziveedu and the refusal of the preliminary injunction to Monsanto together and came to the conclusion that Monsanto's patent was invalid.

Supreme Court ruling

The Court did not go into the merits of Monsanto's patent claim and the reasoning of the Division Bench in revoking the patent. The Court took the view that the challenge to the patentability was by way of a counterclaim by Nuziveedu Seeds Ltd. This was decided and considered by the Division Bench (a two judges bench) of the Delhi High Court in a summary manner by relying on documents extracted from the public domain and not even filed as exhibits in the suit. The Court was of the view that "the issues raised were complicated, requiring technological and expert evidence with regard to issues of chemical process, biochemical, biotechnical and microbiological processes and more importantly whether the nucleic acid sequence trait once inserted could be removed from that variety or not and whether the patented DNA sequence was a plant or a part of a plant" and these matters should be considered at the final hearing of the suit. Thus, it proceeded to set aside the Division Bench order, since the counterclaim of Nuziveedu (in which it challenged Monsanto's patent) was not even considered (on merits) by the single judge. The Supreme Court was of the view that the Division Bench "ought not to have examined the counterclaim itself, usurping the jurisdiction of a single judge."

Our comments

The issues raised in the suit are not merely technical but have a deep impact on the livelihood of farmers. When the Bt cotton technology was introduced, the yield of cotton increased tremendously and India became the second largest producer of cotton in the year 2007-2008. The problem started when the ability of cotton plants to resist pests was found to reduce with time. However, Monsanto demanded the same royalties from its licensees. This led to several state governments intervening to control the licence fee/trait value to be paid to Monsanto, resulting in disputes with licensees.

The trial and final decision of this case may take three to four years. However, it is clear that the decision will not be easy to make and has far-reaching ramifications considering this is the first patent case concerning a DNA sequence/DNA constructs and plant varieties based on the sequence/construct and therefore involves the objections under Section 3(j) of the Indian Patent Act.

narula.jpg
pandey.jpg

Ranjan Narula

Suvarna Pandey


more from across site and ros bottom lb

More from across our site

We provide a rundown of Managing IP’s news and analysis from the week, and review what’s been happening elsewhere in IP
Law firms that pay close attention to their client relationships are more likely to win repeat work, according to a survey of nearly 29,000 in-house counsel
The EMEA research period is open until May 31
Practitioners analyse a survey on how law firms prove value to their clients and reflect on why the concept can be hard to pin down
The winner of Managing IP’s Life Achievement Award discusses 50 years in IP law and how even he can’t avoid imposter syndrome
Saya Choudhary of Singh & Singh explains how her team navigated nine years of litigation to secure record damages of $29 million and the lessons learned along the way
The full list of finalists has been revealed and the winners will be presented on June 20 at the Metropolitan Club in New York
A team of IP and media law specialists has joined from SKW Schwarz alongside a former counsel at Sky
The Irish government has delayed a planned referendum on whether Ireland should join the Unified Patent Court, prompting concern about when a vote may take place
With more than 250 winners recognised during the ceremony, there are many reasons to be positive about the health of the IP industry in EMEA
Gift this article