CCI cover for Indian companies retaining Monsanto technology

Interim order prevents obligatory destruction of seeds, patent lines and germ plasm

Indian seed companies that use global agriculture firm Monsanto's technology will not need to destroy Bt cotton seeds, patent lines and germ plasm once their contract ends, said the Competition Commission of India (CCI) in an interim order.

The domestic companies had filed an anti-competition case against Monsanto for the inclusion of such causes in the licence agreement these have with the global giant.

"If the seeds, parent-lines and germ plasm, containing the technology of Monsanto are destroyed according to the post-termination obligations, it may not be possible for the Indian seed companies to restore the same at a later point of time. Thus, such destruction would cause irreparable and irretrievable harm to the latter and needs to be prevented," said CCI.

This order would be applicable only after it is approved by the Delhi High Court.

However, the CCI prevented the Indian companies from selling any seeds manufactured using Monsanto technology after November 30, 2015. The companies have also been asked to keep a proper record of these seeds.

Germ plasm is a living tissue (genetic source) from which new plants can be grown.

According to Article 9 of the sub-license agreements with Monsanto, whenever the agreement is terminated, the Indian seed companies have to immediately cease selling or distributing the seeds, destroy all the seeds, destroy the parent lines or other cotton germ plasm.

Monsanto had terminated the sub-license agreements with three Indian companies - Nuziveedu Seeds, Prabhat Agri Biotech and Pravardhan Seeds - on 14 November last year.

After filing an anti-competition complaint on 15 December last year, the Indian seed companies moved an application on 22 December asking interim relief.

On Tuesday, the commission observed the process of development of Bt cotton seeds entails various stages. The process takes five to seven years. "Apart from seriously prejudicing the Indian seed companies, such destruction (of seeds, parent lines and germ plasm) would also adversely affect the dependent farmers and subject the entire ecosystem of Bt cotton cultivation to risk," the regulator said.

"Given the significant presence of the Indian companies in the Bt cotton seeds market (claiming to have a total market share of about 20 per cent), it is further apprehended that such destruction is likely to cause adverse effect on competition," it added.

On 10 February this year, the CCI had prima facie found Monsanto abusing its dominant position and forcing anti-competitive agreements on Indian companies in the market of Bt cotton technology in India.

"The termination conditions of the sub-licence agreement entered in between MMBL and the informants are found to be excessively harsh and do not appear to be reasonable as may be necessary for protecting any of the intellectual property rights… Such agreements discourage and serve as a major deterrent for the sub-licencee from exploring dealing with competitors," said the fair trade regulator on 10 February.

SHORT RELIEF

CCI has granted Indian seed companies interim relief from Monsanto agreement which forces them to destroy Bt cotton seeds technology after termination of licence

• 14 November 2015: Monsanto terminates sub-licence agreements with three Indian seed companies
   
• 15 December 2015: Seed companies file complaint against Monsanto in CCI, citing abuse of dominant position and forcing anti-competitive agreements
   
• 22 December 2015: They ask CCI for interm relief restraining Monsanto from terminating the sub-license agreement.
   
• 10 February 2016: CCI finds merit in seed companies' anti-competition complaint, asks DG office to investigate it thoroughly
   
• 18 February 2016: CCI starts hearing arguments on the interim relief application; seed companies now just want a suspension of the enforcement of post-termination obligations
  

 

13 April 2016: CCI gives interim relief to Indian seed companies. However, they are not allowed to sell seeds manufactured after November 30, using Monsanto's technology