SC overturns Delhi HC ruling, grants Bt Cotton patent to Monsanto

Delhi HC had refused the patent stating that seeds, plants and animals can't be patented

In a rare judicial victory for Bayer Corporation-owned Monsanto, the Supreme Court on Tuesday ruled that the company was the rightful patent owner for Bt Cotton Seeds in India. Overturning a Delhi High Court division bench judgement which had ruled that items such as seeds, plants and animals could not be patented, the Supreme Court said that the division bench should have confined itself to the question of whether the injunction granted by the single judge was justified or unjustified in the facts and circumstances of the case.

“It was prima facie observed that the defendants having had the advantage of a sublicense ever since 2004, appeared unjustified in contending that they were not bound by the obligations under the agreement in view of the claimed statutory protections vis-à-vis the suit patent or the registered trademarks,” a two judge bench led by Justice Rohinton F Nariman said in its judgement.

The apex court also referred the matter to back to the high court and said that that all aspects related to Monsanto’s patents on genetically-modified seeds can be considered by it.

A division bench of the Delhi High Court had in April 13 this year ruled that Monsanto did not have a patent for its BT cotton seeds, a genetically modified variant which resists bollworms. The court had then allowed the company to seek registration of the seed variant it had developed under the Protection of Plant Varieties and Farmers’ Rights Act, 2001.

Earlier in March, a single judge of the high court had held Monsanto's decision to terminate its sub-licence given to three Indian seed companies, including Nuziveedu, for making and selling BT cotton seeds a genetically modified variant which resists bollworms as prima facie illegal. The court had, however, said that Monsanto still owned the patent for the seed varieties.

Nuziveedu had approached the courts seeking to cancel Monsanto’s patent contending that end seed of the breeding program it was pursuing had distinct characteristics and thus no royalty needed to be paid by it. Monsanto, on the other hand had claimed that that as the donor seeds being used by Nuziveedu to develop new varieties belonged to Monsanto, they should continue getting royalties as per the original sub-licensing agreement.

The company, through its Indian arm Monsanto Holdings and Mahyco-Monsanto Biotech, had moved the high court against Nuziveedu Seeds and its subsidiaries–Prabhati Agri Biotech Ltd and Pravardhan Seeds Pvt Ltd–seeking directions to stop them from using the technology. Monsanto Technology had alleged that Nuziveedu Seeds and subsidiaries were in violation of intellectual property rights using its patented technology despite termination of their sub-licence agreement in November 2015.  

Local seed firms, which get licenses from Monsanto to sell genetically-modified seeds, pay a “trait fee” fixed by the government.

While Monsanto said it welcomed the judgement of the apex court and would comment further only after studying the order in detail, Nuziveedu seeds Company Secretary Murali Krishna said that the top court order takes back the issue to square one.

“They chose not to decide either or on facts or on law without a trial and remanded matter back to single judge. Though we did not win as expected, we did not lose either,” Krishna said.