The Monsanto judgment

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PRAVIN ANAND and DHRUV ANAND say Supreme Court decision is a lease of life for biotech innovation

The Supreme Court of India pronounced the most anticipated judgment on patent law issue in recent times on 8 January 2019, restoring the patent of Monsanto for Bt technology, which is now back in force and on the register of patents.

Pravin-Anand-Anand-and-Anand
Pravin Anand

The present issue in dispute having been wrongly touted as a Farmer David v Monsanto – a fight against a foreign Goliath, was a controversial one in which the Supreme Court appeared to have rightly considered as one involving the future of innovation in the field of biotechnology, in particularly agro-biotechnology, in India.

BACKGROUND OF DISPUTE

Monsanto has a patent over a novel artificial DNA construct that, when inserted into a plant, makes the plant bollworm resistant. Monsanto had licensed this technology to seed companies in India, including Nuziveedu (NSL) by sale of 50 donor seeds that incorporated the patented Bt technology of Monsanto.

Monsanto initiated a patent infringement action of their Bt patent against NSL pursuant to the termination of the licence agreement. Post termination, Nuziveedu continued to use the Bt patented technology and refused to pay the licence fees to Monsanto on the basis of the government-issued seed control order.

The Single Judge, after hearing interim arguments, ruled in favour of the patentee Monsanto as regard the prima facie validity of the patent granted to it, and its infringement by Nuziveedu, but held the termination of the licence agreements by Monsanto unlawful and reinstated the same. The Judge directed Nuziveedu to pay Monsanto as per the government fixed tariff.

Aggrieved with the interim order, both Nuziveedu and Monsanto cross-appealed to the Division Bench. The Division Bench, after hearing both parties summarily, held that the patent of Monsanto was invalid on the ground of it being non-patentable subject matter under section 3(j) of the Indian Patent Act, a provision that prevents patents on plants, animals and their parts, seeds, or essentially biological processes for producing them.

Dhruv-Anand-Anand-and-Anand
Dhruv Anand

The Division Bench also held that Monsanto’s innovation was more suited to protection under the Protection of Plant Varieties and Farmers’ Rights Act. Monsanto appealed this decision before the Supreme Court.

The importance of this matter to the agro-biotech industry in India is evident by the number of other petitioners/intervenors who either filed fresh petitions of their own, or intervened in the matter.

While associations like the Federation of Seed Industries of India and Shetkari Sangathan supported the stand of Monsanto, All India Kisan Sabha, the National Seed Association of India, the Research Foundation for Science Technology and Ecology and Swadeshi Jagaran Foundation supported the stand of Nuziveedu.

THE VERDICT

After hearing the parties for more than 40 hours, the Supreme Court passed a verdict in favour of Monsanto. The Supreme Court agreed that the petitioner’s patent had been summarily adjudicated upon. It held that summary adjudication of a technically complex suit without expert evidence was neither desirable nor permissible in law.

It further held that the suit involved complicated mixed questions of law and facts with regard to patentability, which could not be examined at the preliminary stage with the evidence before the court.

The Supreme Court set aside the order of the Division Bench and restored the order of the Single Judge, leaving open all questions of facts and law. Importantly for Monsanto, the court observed that it was satisfied that the nature of the injunctive relief granted by the Single Judge was in order, and merited no interference during the pendency of the suit.

RAMIFICATIONS OF VERDICT

The judgment passed by the Supreme Court is extremely significant for many reasons, most important of which are:

  1. It is the first time that the Supreme Court has heard a complex patent dispute involving patent eligibility under section 3(j) of the Patents Act;
  1. By holding that the suit involved complicated mixed questions of law and facts with regard to patentability, and leaving the same open for trial, the Supreme Court agreed in principle with the arguments of Monsanto that issues involving section 3(j) were mixed questions of law and fact, and could not be summarily decided without evidence being led in the matter;
  1. Finally, the decision came as a huge boost to India’s agro-biotech industry, which was adversely affected by the findings in the Division Bench judgment, especially as there is ongoing research and development regarding “novel genes” that help deal with biotic and abiotic stresses, enhance productivity and nutritional quality. This was a very positive development, as the fate of about 23 biotech crops and 67 biotech traits (39 of which are via the public sector) had been put in jeopardy because of the Division Bench decision.

Anand-and-Anand

PRAVIN ANAND is the managing partner and DHRUV ANAND is a partner at Anand and Anand. Udita M Patro, a managing associate, assisted with the article.