The Delhi High Court on Wednesday disallowed a plea by American agricultural biotechnology giant Monsanto to enforce its patent for its genetically modified (Bt) cotton seed varieties ‘Bollgard’ and the widely used ‘Bollgard II’ in India. The ruling could make it even more difficult for the firm, hit by government controls on trait value (royalty) it receives on the technology from some 50 domestic seed companies, to do business in the country. Also, many analysts feel that weak intellectual property rights protection could send wrong signals to innovator-companies. Use of Bt seeds has led to a jump in India’s cotton productivity over the last several years.
However, a bench of justices S Ravindra Bhat and Yogesh Khanna gave Monsanto a three-month window to apply for registration of these seed varieties under the Plant Varieties Act (PVA). A registration under the PVA would still entitle the firm to trait fee. However, it’s just a control over reproductive materials of the plant, not the key genetic material. In the absence of a patent, the plant genetic material would be unprotected and would be available to the public for further research and development.
After the verdict, Monsanto pleaded that the decision be kept in abeyance for a few weeks till it can challenge it the Supreme Court. However, the court declined the plea but granted the US company a certificate of fitness to file an appeal in the apex court.
Both Monsanto and Hyderabad-based Nuziveedu Seeds had filed cross-appeals against the high court’s single-judge order in March last year that ruled that Monsanto’s termination of its sub-licence agreement for genetically modified hybrid cotton seeds with Nuziveedu Seeds was illegal and arbitrary. The single judge had also directed restoration of the sub-licence agreements with the Indian seed manufacturer to use Monsanto’s Bollgard and Bollgard II trademarks as per the GM Technology Licensing Agreement found in the Licensing and Formats for GM Technology Agreement Guidelines, 2016.
However, the single judge while rejecting Nuziveedu’s plea that the US-based major was incorrectly granted patent for Bt cotton seeds varieties had 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.
The Indian companies had challenged the rejection of this claim by the single judge before the division bench of the HC.
Two years ago, the Indian government had imposed price controls on the widely-used Bollgard II variety of Bt cotton seeds and slashed the trait value payable to Monsanto. Last month, the government reduced the seed’s maximum retail price (MRP) in the retail market and the trait value further. The MRP for the Bt cotton seeds in the 2018-19 kharif season has been fixed at `740 for a 450-gm packet, down 7.5% from earlier, while trait value was cut by a steeper 20% to Rs 39 per packet.
Before the Centre capped retail price of the Bt cotton seed, its price was in the range of Rs 830-1,000 per 450-gram packet, as existed in 2015-16 kharif season.
The price-control has resulted in a sharp reduction in the royalty received by Mahyco Monsanto Biotech (MMBL), the India-incorporated firm, which has sub-licensed the Bt cotton seed technology to several domestic seed companies since 2002.
Last year, the Delhi HC had stayed the immediate restoration of a sub-licence agreement between the American biotechnology major and Nuziveedu Seeds for the use of the former’s patented Bt cotton technology.
Monsanto, through MMBL, had 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.
Currently, 90% of India’s cotton area of 11.8 million hectares (in the 2015-16 season) is under Bt cover. Domestic cotton output has risen manifold since farmers started using Bt seeds, from 13.6 million bales in 2002-03 to 30.1 million bales in 2015-16.