With the Bombay High Court asking Nuziveedu Seeds to deposit Rs 138 crore within two weeks, US seed-tech firm Monsanto has won a major battle against the Andhra Pradesh seed firm that was refusing to pay royalty for its technology. The Bombay High Court ruling, in turn, followed an arbitration court ruling in Monsanto s favour in January; Nuziveedu didn t pay Monsanto royalties from April to November 2015, after which Monsanto terminated its licence agreement.
And Monsanto won an even bigger battle when, in January, the Supreme Court overturned a ruling of the division bench of the Delhi High Court that said the patent it had got from the Indian Patent Office was illegal (yes, that is what it said).But there is an important caveat. When Nuziveedu refused to pay Monsanto, one of the arguments it made was that Monsanto s patent was not a valid one. When a single judge bench of the Delhi High Court ruled on this, it said that while a larger hearing on the validity of the patent would be held, prima facie, it appeared valid. When this was challenged before a division bench of the same court, it ruled that the patent was invalid. The Supreme Court, however, struck down this ruling. With the single bench ruling becoming the operative one, this meant that while the patent is valid right now, there will be a full hearing on whether this should be struck down. So while it took Monsanto 7-8 years to get the patent in 2008, it can take another 15-20 years for a decision on its validity whichever party loses the patent battle in the single-judge bench will appeal to the division bench and that, eventually, will be appealed before the Supreme Court.
This is where prime minister Narendra Modi comes in. His government has done a lot to hurt Monsanto, through a seed-price order, by trying to limit royalties, and even the additional solicitor general arguing the patent was illegal! This went down well with the RSS s anti-GM lobby, but with the Indian Patent Office under attack, will anyone bring in innovations that require patent protection? It is not just Monsanto, the Patent Office has given 70 similar patents including several to Indian companies. What happens to them?
The crux of the controversy centers around Section 3(j) of the Patents Act while Section 3 deals with what are not inventions and cannot be patented, 3(j) talks of plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals .
Monsanto s invention comprised (a) identification of desired gene (Cry2Ab) from the DNA of Bacillus Thuringiensis (BT) bacteria, which is found naturally in the soil; (b) making (synthesising) nucleic acid sequence by copying the Cry2Ab for insertion into a plant cell; and (c) the method of inserting this nucleic acid sequence into a plant cell. Once this was done, Monsanto licenced the technology to various seed companies, like Nuziveedu, and they used this to develop various cotton hybrids that had the essential qualities of what Monsanto developed. Monsanto argued its product was a biotech one, a microbiological process/microorganism, which was patentable under the Patents Act. It said Section 3(j) did not apply to it since what it had developed was not ordinarily part of a plant, it was inserted into a plant using its technology. The single judge bench agreed with this when it said Monsanto s technology involve(d) laboratory processes and are not naturally occurring substances which only are to be excluded in Section 3(j) .
The division bench, however, agreed with Nuziveedu when it said, the nucleic acid sequence, which is the invention in question (the Cry2AB gene), has no existence of its own; it is of use after introgression at a particular place, none else. Even thereafter, the seed material has to undergo further steps of hybridisation to suit local conditions. Therefore, these products are not microorganisms and consequently excluded from the exclusion clause in Section 3(j) . In other words, Monsanto s patent was really useful only after it was inserted into a plant, but once it was introduced into a plant, however, Section 3(j) applied! Additional Solicitor General Tushar Mehta, who appeared before the division bench even though the Central government was not a party to the case, argued something close to Nuziveedu s point when he said that, since the gene on which the patent was issued was later inserted into a plant, the patent was, in effect, being given to a plant; and, by law, that is not allowed.
Interestingly, while the Central government s actions were benefitting Nuziveedu primarily, the Andhra Pradesh government has cancelled its licence along with 13 other seed firms for their role in selling the next generation of GM seeds even though they were not approved by the Genetic Engineering Approval Committee. This followed the findings of a body of experts formed at the behest of the Prime Minister s Office that ruled out these seeds being supplied by Monsanto and said its tests showed some local firms were engaged in breeding the illegal seeds.Apart from restoring the credibility of India s patent office, Modi needs to intercede since GM seeds are critical for boosting productivity. In the case of cotton, for instance, in the absence of new seeds, the output of Indian farmers will remain below world levels; if farmers output is lower than global levels, Indian cotton and garments made from it will also be uncompetitive. If GM maize raises global productivity and India doesn t have this, similarly, it means India s chicken industry will become uncompetitive. That is, GM technology is not just about benefitting farmers, it is about benefitting Indian industry as well. That is also why, though the government put a cap of `800 on every bag of Monsanto s seed, when illegal varieties of the next generation of GM cotton were sold in India by the likes of Nuziveedu farmers were willing to pay even `1,200 since they benefitted from its properties.