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Citing an Indian law that excludes seeds from being patented, Nuziveedu Seeds Ltd (NSL) argued that the U.S. seeds company was not eligible to claim patents and charge royalties from Indian seed companies.
On Wednesday, the Delhi High Court agreed with NSL, ruling that India's Patent Act does not allow Monsanto any patent cover for its GM cotton seeds, said Narne Murali Krishna, a company secretary for NSL.
"Today's order will have wide-ranging, negative implications for biotech-based innovation across many sectors within India, and is inconsistent with other international markets where agricultural innovation has flourished," the spokesman said in a statement.
Monsanto's "false claim has got exposed today," Kalyan Goswami, director general of the National Seed Association of India, said in a statement.
Late last year, NSL said it would not settle a long-standing intellectual property dispute with Monsanto over genetically modified cotton, despite some other Indian companies doing so.
In 2016, the Indian farm ministry cut Monsanto's royalties by more than 70 percent, triggering a long-running feud that drew in the Indian and U.S. governments.
More than 90 percent of India's cotton crop is genetically modified.
(Reporting by Suchitra Mohanty; editing by Mayank Bhardwaj and Adrian Croft)