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Monsanto patent victory seen as a boost for biotech investment in India

Reuters  |  NEW DELHI/MUMBAI 

By and Rajendra Jadhav

NEW DELHI/MUMBAI (Reuters) - The ruled on Tuesday that Monsanto can claim patents on its genetically modified (GM) cotton seeds, a victory for the U.S. company that is expected to encourage firms to step up investment in the country.

The decision on appeal overturns an earlier ruling by the that Monsanto - the world's biggest seed maker, which has been bought by Germany's - could not claim patents on cotton seeds.

The outcome is positive for foreign agricultural companies such as Bayer, and which have been concerned they could lose patents on crops in

The ruling was criticised by a group, which has links to the ruling and which favours technologies and "first" economic policies, but it was welcomed by one of India's main farmers' associations.

"This is a very good move as most international companies have stopped releasing new technology in the Indian market due to the uncertainty over patent rule," said Ajit Narde, a of the Shetkari Sanghatana, a farmers' body, which has been demanding access to new technologies.

Access to advanced technology was important to help Indian farmers compete with rivals overseas, Narde said.

approved Monsanto's GM cotton seed trait, the only lab-altered crop allowed in India, in 2003 and an upgraded variety in 2006, helping transform into the world's top and second-largest exporter of the fibre.

Monsanto's went on to dominate 90 percent of India's cotton acreage. But for the past few years Monsanto has been at loggerheads with Indian seed company (NSL) over patents, drawing in the Indian and U.S. governments. (reut.rs/2ncBknn)

The ruling came after NSL argued that India's Patent Act does not allow Monsanto any patent cover for its genetically modified (GM) cotton seeds.

M Ramasami, of the which represents foreign seed makers, said the ruling would encourage the development of new and farm processes which in turn would benefit farmers and improve the competitiveness of India's farm economy.

Biotech (India) (MMB), a joint venture between Monsanto and India's (Mahyco), sells GM cotton seeds under license to more than 40 Indian seed companies, which in turn sell product to retailers.

Monsanto's Indian joint venture had terminated its contract with NSL in 2015 after a royalty payment dispute, escalating tensions over

The on Tuesday also said the would examine Monsanto's claims that NSL infringed its intellectual property on Bt cotton seeds.

NSL said in a statement after the ruling that it stuck to its claim that India's Patent Act does not allow Monsanto any patent cover for its GM cotton seeds and that it was also "confident of succeeding" before the Delhi court.

After the court verdict, shares of climbed as much as 13.4 percent before paring most losses to close up 2.8 percent.

The group close to Narendra Modi's BJP that opposes GM technology said it would seek a legislative amendment to the rules governing patents.

The government has not taken a stance on this case and a at the farm ministry did not immediately respond to an email seeking comment on the Supreme Court ruling.

The ministry has twice slashed royalties that local seed companies pay to Monsanto in the past two years. The ministry also cut cotton seed prices.

Monsanto has also been battling a proliferation of illegal planting of its herbicide-tolerant cotton varieties.

After a spate of unfavourable government orders and a tussle over royalty payments, Monsanto in 2016 withdrew an application seeking approval for its next generation of GM cotton seeds in India. (https://reut.rs/2jbDq80)

(Additional reporting by Suchitra Mohanty; Editing by and Susan Fenton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 08 2019. 20:35 IST
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