Monsanto loses trademark infringement suit against Nuziveedu Seeds

Cancellation of sub-licensing agreement by Monsanto held illegal and arbitrary

The Delhi High Court on Tuesday dismissed Monsanto Technology LLC's trademark infringement suit against Nuziveedu Seeds Limited, after concluding that the American biotechnological company's termination of a sub-licensing agreement with the Indian seed manufacturer was illegal and arbitrary.

Rejecting Monsanto's plea, Justice R K Gauba held that the sub-licensing agreement allowing Nuziveedu Seeds to use the company's genetically modified hybrid cotton seed technology still continued to be in force and binding on both parties. The decision now allows Nuziveedu to continue to use Monsanto's Bollgard and Bollgard II trademarks.

In addition to reinstating the contract, the court said that future royalty payments for use of Monsanto's patented Bt cotton technology were to be made as per the cotton seed price control order issued by the central government. The 2015 price control order has reduced the cost of the seeds by 74 per cent from Rs 163 per packet to Rs 43, exclusive of taxes.

Justice Gauba held that Monsanto could not charge a higher trait fee than what was permitted under Indian laws and has asked Nuziveedu to deposit the appropriate fees with the registry of the court, in case Monsanto refuses to accept it. The court has also directed the sub-licensing agreement 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.

Monsanto had sued Nuziveedu and its subsidiaries for continuing to sell cotton seeds using the company's patented technology, even after the termination of the sub-licensing agreement in December 2015.

Although the court sided in favour of Nuziveedu, it clarified that any default in following the guidelines would disentitle the Indian seed manufacturer from the continued use of Monsanto's patents and trademarks (currently under dispute) for the sale of their merchandise.