Despite Monsanto's legal win, biotech firms may defer innovation in India

The Supreme Court judgement, say sources, isn't motivating enough for them to walk the extra mile as, regulatory interference such as capping royalties or unpredictable policies remains a roadblock

Despite a Supreme Court's validation of Monsanto's patent for GM seeds in a landmark judgment on Tuesday, leading bio-tech companies are not keen yet to introduce the new technologies they had put on hold after Monsanto’s GM Cotton controversy surfaced.

The Supreme Court ruled on Tuesday that Monsanto’s patent for Bt cotton seeds is valid, overturning a judgment by the Delhi High Court saying items such as seeds, plants and animals can’t be patented under Indian laws. A two-judge bench of the apex court, headed by Justice Rohinton F Nariman, said a lower court will decide if Indian companies infringed Monsanto’s patent on Bt cotton seeds.

A spokesperson of Bayer, which now owns Monsanto, said, “We welcome the judgement of the Supreme Court.”

Today’s ruling has certainly improved sentiment, as now there is an element of certainty that all current and future research will be patentable. Biotech companies have been conducting extensive research in this field and multinational companies were also waiting to introduce new patents and technologies in the farm sector, which they had put on hold the past two years.

Shivendra Bajaj, Executive Director, Alliance for Agri Innovation, said,”we welcome the judgement favouring Monsanto’s patents on Bt Cotton and appreciate the fact that the Court has recognised that products of biotechnological processes such as man-made DNA constructs are patentable in India. We believe this will bring certainty in the policy environment. Intellectual Property Rights, whether global or Indian, need protection and this verdict is a shot in the arm to India’s agri-biotech industry, which has been looking to improve Indian cotton farmer’s competitiveness.” Alliance for Agri Innovation is a body of leading biotech and agri research firms.

Biotechnology holds a great deal of promise in enabling India to increase its agricultural productivity and enhance the competitiveness of its farm economy. The ruling also safeguards the interest of public and private investments in agricultural R&D and will prove immensely beneficial in providing continuous innovations across sectors, not just limited to agriculture. But according to Bajaj, while the major issue has been addressed, several other challenges remain.

Industry players are still not enthused and motivated enough, and several global bio-technology companies have been reluctant to put in more money in India or introduce new technologies. Two years ago, the government had capped royalty payment to Bt cotton technology holder Monsanto and asked it to grant licences to more seed companies for using Bt cotton. After that, Monsanto, now under Bayer's fold, had said it was holding back introduction of Bollgard-2 RRF and other Bt cotton varieties that were introduced globally.

The judgement, according to sources, is still not motivating enough for companies to walk the extra mile as, ”regulatory interference such as capping royalties or unpredictability of regulatory policies continues to be a major hurdle,” said an industry observer who declined to be identified.

Bayer’s Submergence and Bacterial Leaf Blight (BLB)-tolerant hybrid rice seed Arize, which can withstand flooding for two weeks in vegetative stages, was launched in Bangladesh but hasn't yet been introduced in India, although sources say Bayer is working towards introducing it in India.

Similarly, a few other multinational companies have held back new innovations in India and are awaiting regulatory clarity.

Other challenges for the Indian market, especially for GM seeds, are intact. Regulatory clarity is one aspect when company wants to commercialise a product technology, but for GM seeds field trials, the state government’s NOC is a big hurdle. For example, moratorium on Bt brinjal will complete nine years next month and for GM mustard, the government has asked companies for more research results. However, for that, more field trials are required, and state permissions to carry them out are still awaited.