Monsanto Technology LLC v. Nuziveedu and Ors.



Citation: Civil Appeal No. 6472 of 2004

Bench: Justice B.N. Agarwal & Justice P.P. Naolekar

Court: Supreme Court of India


Facts:

Monsanto Technology LLC (“Monsanto”) and Nuziveedu Seeds (“Nuziveedu”), with their subsidiaries, formed a sub-licensing agreement on 21st February, 2004.


Monsanto manufactured several donor BT cotton seeds, which were created with the help of a certain patented technology. These were distributed among domestic seed companies including Nuziveedu and its subsidiaries to introduce desired genetic characteristics into their hybrid plant varieties by the technique of back-crossing and paid them a royalty for the same.


With the objective of building an efficient pricing arrangement, to aid farmers procure these seeds at a just and affordable price, and to render uniformity in the regulation of all GM technology, the State Government fixed the MSP and introduced a trait value that was significantly lower than that agreed by contract between Monsanto and its subsidiaries.


Nuziveedu did not pay the extra amount according to the contract with Monsanto with the justification that they were legally obliged to pay not more than the value put forth by the State Government. Thus, Monsanto terminated this contract.


Monsanto later filed a suit for an ad interim injunction to restrain Nuziveedu and its subsidiaries from using its trademarks “BOLGARD” and “BOLGARD II”, and from marketing and selling the GM hybrid cotton seed patented by the Plaintiff.

Nuziveedu met this contention with the argument that the patent on the cotton seed was not legal as per Section 3(j) of the Patents Act, 1970.



Issue:

Whether gene sequences that were included in the claims of the GM hybrid cotton seed were excluded from patentability under Section 3(j) of the Patents Act, 1970?


Laws:

Section 3(j) of the Patents Act, 1970.


Analysis:

The Delhi High Court’s Single Judge instructed Monsanto to continue the supply of the GM hybrid cotton seeds according to the initial sub-license agreement in 2004. However, the rate of the trait fee was imposed on the plaintiff, which was to be paid according to local laws. However, this was a clear violation of the contract signed by the parties because it stated that a certain rate of trait fee ought to have been paid regardless of a change in local laws.


The patent was canceled. This act was unjustified because while Section 3(j) states that one cannot patent a plant, an animal or a biological process, it does not talk about artificially-created biotechnology inventions, such as the one that the Plaintiff engineered. Further, according to rule 26(5) of the European Patent Convention, “A process for the production of plants or animals is essentially biological if it consists entirely of natural phenomenon such as crossing or selection.” The Plaintiff’s invention is essentially artificial, due to which the decision of the bench is inept.


India, being a signatory to the TRIPS Agreement, is obligated to fulfill the provisions of Article 27(3)(b) of the Agreement, which implies that signatory countries ought to protect plant varieties under patent law or a sui generis system of law or perhaps a combination of the two. However, this judgment lacked any mention of the same.


When the case was appealed in the Supreme Court of India, the bench stated that Section 64 of the Patents act, 1970 and Section 9 of the CPC, 1908 ought to be mandatorily taken into account before the revocation of a patent, after which the single judge bench decision was upheld.


Conclusion:

This decision clarified the legal status of GM technology under patents and answered several questions with respect to the validity of inventions that deal with biotechnology. The protection offered under the Patents Act, 1970 still stands and companies continue to innovate in the field of biotechnology - related research under the same Act.


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