In a breather to Monsanto Technology LLC, the Delhi High Court on Monday stayed the immediate restoration of a sub-licence agreement between the American biotechnology major and Hyderabad-based Nuziveedu Seeds for the use of the former’s patented Bt cotton technology. A division bench led by Justice S Ravindra Bhat stayed the single-judge March 28 order that had ruled that Monsanto’s termination of its sub-licence agreement with Nuziveedu Seeds was illegal and arbitrary and had directed restoration of the sub-license agreements with the Indian seed manufacturer. The bench has asked both parties to file written submissions so that the matter can be heard in a timely manner.
Monsanto’s senior counsel Kapil Sibal argued that the impugned order could not have directed restoration of inter-party contracts which have been terminated by one of the companies.
Monsanto India spokesperson said that the Delhi High Court interim order “validates our position that the sub-license agreements of NSL and its group companies stand terminated and cannot be restored or modified. In November 2015, MMB was forced to terminate the license agreements of Nuziveedu and its group companies due to their repeated refusal to pay contractually agreed upon amounts.”
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“MMB (Mahyco-Monsanto Biotech Ltd) has made several unsuccessful attempts to amicably resolve the bilateral dispute that resulted from NSL’s illegal withholding of amounts payable under long-standing agreements despite having profited from the use of our technologies for over a decade,” it further said in a press statement.
The single judge’s order had allowed Nuziveedu to continue to use Monsanto’s Bollgard and Bollgard II trademarks and had directed the sub-licensing agreements between the two companies to be modified as per the GM Technology Licensing Agreement found in the Licensing and Formats for GM Technology Agreement Guidelines, 2016.
It had also held that all future royalty payments or trait fee for the use of Monsanto’s patented Bt cotton technology would be as per government stipulations.
Monsanto Inc, through its Indian arm Mahyco-Monsanto Biotech, sued Nuziveedu Seeds and its subsidiaries Prabhati Agri Biotech and Pravardhan Seeds last year for allegedly continuing to sell seeds using its patented technology despite termination of its sub-licence agreement in November 2015.
Rejecting the claim, the single judge had held that the sub-licensing agreements allowing Nuziveedu Seeds to use Monsanto’s GM hybrid cotton seed technology still continued to be in force and was binding on both parties.