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Pepsico vs farmers: MNC proposes out-of-court settlement to potato growers

Prachi Gupta

Global beverage brand PepsiCo has proposed an out-of-court settlement to the farmers after the hearing in an Ahmedabad court on Friday. However, the two parties have not reached an agreement so far, a person aware of the matter told Financial Express Online. The next hearing is scheduled for 12 June 2019.

PepsiCo sued nine Gujarat farmers early in April for growing its patent potato variety FC-5. The company claims exclusive rights over this variety in India. It then demanded Rs 1 crore each from the farmers as damages. PepsiCo had cited the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPV&FR Act) to back its claim. The farmer community cited Section 39 of the same act in its defence.

What is section 39 of the PPV&FR act?

Section 39(1)(iv) of the Protection of Plant Varieties and Farmers Rights Act, 2001, cited by farmers provides them with the right to save, use, sow, resow, exchange, share or sell their farm produce including seed of a variety protected, however, the only restriction to this right is that the farmer shall not sell branded seed of a variety protected under the Act.

The issue

Section 28 of the Act provides PepsiCo exclusive right to produce the variety and according to Section 64 of the Act, PepsiCo said that their right has been infringed. However, These provisions will have to be interpreted in a harmonious manner keeping the intent of the legislature in mind and going by the statement of objects and reasons of the Act, Debanshu Khettry, Principal Associate, law firm Leslie & Khettry told Financial Express Online.

The complication in the case arises from the fact that the law safeguards the interest of both parties. However, Section 42 of the Act provides the farmers protection against infringement if it can be shown that they were not aware of the existence of Pepsi s rights that were infringed. So we need to see if farmer s rights are above Pepsi s rights under the Act and whether any alleged infringement was done with knowledge or not, Debanshu Khettry added.

UPOV — International Union for the Protection of New Varieties of Plants — is an organisation that works to promote new plant varieties. India is not a part of this Union because of the conflicting laws in place which protects the interest of breeders as well as farmers under The Protection of Plant Variety and Farmers Right Act, 2001.