This case revolves around the legal battle between the domestic company Nuziveedu and other subsidiaries and the company called Monsanto based on US Multi-National Company about patent infringement. This case has been majorly talked about by many states as there were overrules that happened. This case was transferred in three courts right from Delhi High Court to Delhi High Court bench to Supreme Court. Let us look into the facts and issues and judgment of this case understand how the courts have handled this case differently.
MEANING FOR IMPORTANT KEYWORDS:
1. GM seeds – When we do a certain genetic manipulation or modification in the DNA of the crops is called GM (Genetically Modified) crops.
2. GEAC – Genetic Engineering Appraisal Committee is an apex body established to regulate the manufacturing of genetic crops and other organisms which are genetically engineered. This committee is responsible for GMOs.
3. BT– Bacillus Thuringiensis is a bacterium that naturally occurs in soil which produces proteins which are specialized in killing certain targeted insects. Biotechnologists are allowed to use this BT protein to develop insect protective crops and protect against the damage of the insects.
In 2004, the Monsanto Company went into a sublicense agreement with our domestic companies like Nuziveedu and other local companies for an initial period of 10 years. Both the companies have gone into an agreement stating that these Indian companies would use GM cotton seeds supplied by Monsanto within the limits of the agreement. Monsanto licensed its patent IN214436 titled “Methods for Transforming Plants to Express Bacillus Thuringiensis Deltaendotoxins” (1). According to their agreement, Nuziveedu and their subsidiaries would pay a trait fee to the Monsanto Company as mentioned in the agreement with a lifetime fee of Rs.50 Lakhs.
FACTS OF THE CASE:
By using the patent, the Monsanto Company has created so many BT cotton seeds and then they would distribute them to the Indian companies including Nuziveedu as per the agreement. To have affordability on Biotech products for the farmers and to avail them easily the State Government has fixed the MSP (Minimum Support Price) and trait value which is less than the amount that these companies have agreed upon in their contract.
Keeping this in mind, the Nuziveedu and other subsidiaries refused to pay the trait fee which they have contractually agreed upon, and told them that they would pay the trait fee according to the amendment done by the State Government. And so, Nuziveedu asked the Monsanto Company to reduce the trait fee as per the new policies of the State Government but they refused to reduce it. Due to the refusal to the reduction of the trait fee, Nuziveedu and other companies stopped paying royalties to Monsanto in 2015.
Followed by that, Monsanto filed a lawsuit against Nuziveedu and the other local companies seeking injunctions for trademark and patent infringement. In response to this lawsuit, Nuziveedu filed a counter-claim for the revocation of Monsanto’s patent regarding its validity as per section 3(j) of India’s Patent Act, 1970.
ISSUE OF THE CASE:
1. Whether Nuziveedu has infringed the Patent of Monsanto?
2. Whether the patent can be considered invalid just under Section 3(j) of the Patents Act?
3. Whether the injunction can be granted?
DECISION 1: SINGLE JUDGE OF DELHI HIGH COURT:
When this case came to the desk of the single judge of Delhi High Court, the judge has restored the agreement between Monsanto and Nuziveedu and ordered Nuziveedu and others to continue to use this biotechnology from Monsanto and ordered them to pay the trait fee as per the law of State Government and not as per the contract they have signed upon. Besides that, the single judge has held that the patent was prima facie valid.
APPELLANTS: The appellants argued that the patented NAS is a man-made chemical and not a creation of a biological process. A summary judgment was not appropriate for this suit because the issue for the existence of the patent and objection under Section 3(j) of the Act was a profoundly mixed question of law and facts it required formal proof and expert evidence at the hearing of the suit. (2)
RESPONDENTS: The respondent argued that they did not follow the exact procedure as per the patent for the installation of the Bt gene into plants. They argued that they did the process of cross pollination to have the Bt gene in the cotton and that ultimately comes under the biological process since it doesn’t involve any type human interference. With this argument they tried to prove that they can claim under section 3(j) of the India’s Patent Act.
DECISION 2: DIVISION BENCH OF DELHI HIGH COURT:
Both the companies in not being satisfied with the decision given by the single judge of Delhi High Court appealed this case to the division bench of Delhi High Court. This court revoked the patent of Monsanto as the invention is not patentable under section 3(j) of the Patent Act, 1970.
The reason behind this decision has been explained by the Delhi High Court stating that the BT gene was useless unless it is inserted into the cotton hybrid. But here, the process takes by the process of cross-pollination which means that the insertion of this gene is carried out by the seed companies, who cross a BT gene containing plant with proprietary cotton varieties which is a natural process that covers Section 3(j) of Patents Act, 1970.
FINAL JUDGMENT: SUPREME COURT OF INDIA:
Again this case was further appealed by these companies to the Supreme Court of India. In 2019, The Supreme Court held that the patent could not be revoked just with the basis of summary and lack of facts and evidence. It further stated that the court has to consider Section 64 of the Patents Act, 1970 and Section 6 of Civil Procedure Code, 1908 before revoking a patent.
The court also said that the decision given by the Division bench would not be considered justifiable as the bench did not consider any experts’ advice as the case is technical in nature. Besides that the Supreme Court also said that the bench did not examine any documents or witness before giving the decision which was a big error. The Supreme Court concluded that the decision given by the single judge from Delhi High Court was acceptable and so the case was remanded to him for disposal.
In my opinion, if patents are revoked in such a manner would result in the discouragement of importance in the research and development of agricultural biotechnologies. And also if every patent is revoked under this Section 3(j) of the Patents Act, there would be only a few biotechnologies be patented and the other doesn’t have any protection at all and that would result in the reduction of industries collaborating with our country. And so the Supreme Court has validated that the patents are necessary and integral to the innovations and also reinforces the faith in the Indian Judiciary and our Patent system. Because of the SC ruling, it would encourage the technologists to invest more money in biotech industries so as to bring good development in agricultural areas.
1.Dias Michelle Jerry, Monsanto V. Nuziveedu, KHURANA & KHURANA ADVOCATES AND IP ATTORNEYS (Jun.8, 2019) https://www.khuranaandkhurana.com/2019/06/08/monsanto-v-nuziveedu/
2. Admin, BT COTTON: A CASE STUDY, LAWCUTOR ( Jun 8, 2020)
3. Teaminvntree, Monsanto Vs Nuziveedu Patent dispute: Brief Analysis of Judgement, INVNTREE, (May 15, 2018)
4. Nidhisha Garg, Monsanto v. Nuziveedu: A Missed Opportunity by the Supreme Court?, KLUWER PATENT BLOG, (Jan 27, 2020)
5. Divyanshi Arora, India: Monsanto Vs Nuziveedu Seeds: The BT Cotton Judgment, KHURANA & KHURANA ADVOCATES AND IP ATTORNEYS (May.27 2019)