Monsanto Co.’s patent claim on genetically modified (GM) Bt cotton.

The Supreme Court on Tuesday recently restored Monsanto Co.’s patent claim on genetically modified (GM) Bt cotton.

How does the case evolve?

• Mahyco Monsanto Biotech (India) (MMB) is a joint venture between Monsanto and India’s Maharashtra Hybrid Seeds Co (Mahyco).
• It has sub-licensed Bt cotton technology to various domestic seed companies since 2002.
• Italso sells GM cotton seeds under license to more than 40 Indian seed companies, which in turn sell product to retailers.
• India has approved Monsanto’s GM cotton seed trait in 2003.
• This has helped in transforming the country into the world’s top producer and second-largest exporter of the fibre.
• Monsanto’s GM cotton seed technology dominates 90% of India’s cotton acreage.
• The problem started when MMB terminated its contract with Nuziveedu Seeds Ltd (NSL) in 2015 after a royalty payment dispute.
• A case filed in 2015 by MMB against NSL and its subsidiaries for selling Bt cotton seeds using its patented technology, despite termination of a licence agreement in November 2015.
• The Delhi High Court on May 2018held that plant varieties and seeds cannot be patented under Indian law by companies such as Monsanto.
• Also, royalties on GM technology would be decided by a specialized agency of the agriculture ministry.  
• This has made Monsanto unable to claim patents on GM cotton seeds.
• The Supreme Court recently overturned this judgement saying that Monsantocan claim patents on its genetically modified (GM) cotton seeds.

What will be the consequence?

• Bollgard technology is about a genetic sequence from a microorganism called Bacillus thuringiensis(Bt).
• This sequence, when modified and inserted into plant cell, produces a toxin that repels pests like bollworm.
• Any attack on the ability of Monsanto to earn royalty from its IP would have resulted in Monsanto not introducing newer technologies in India.
• This is critical as bollworms would, over time, become resistant to the current strain of the pest-repellent toxin, and would require further innovation.
• With the ruling, the patent held by Monsanto over its Bollgard-II Bt cotton seed technology will be enforceable in India for now.
• The outcome is positive for foreign agricultural companies which have been concerned that they could lose patents on GM crops in India.
• Also, most international companies which have stopped releasing new technology in the Indian market due to the uncertainty over patent rule would re-think their strategies.
• Access to advanced technology in cotton production was important to help Indian farmers to compete with rivals overseas.
• Thus, the verdict validates that patents are integral to innovation.
• However, SC has left the validity of Monstanto to claim royalty on Bt cotton to be finally decided by the Delhi high court.

What is the other related case?

• In Divya Pharmacy vs Union of India and Ors, the High Court of Uttarakhand passed an order against Divya Pharmacy that makes ayurvedic medicines and nutraceutical products.
• Various companies manufacturing ayurveda-based cosmetics have been operating unregulated.
• In that case, the High Court gave a purposive interpretation to the provisions of the Biological Diversity Act, 2002.
• It adjudicated that an Indian entity also has to comply with the demand raised by a state biodiversity board towards fair and equitable benefit sharing (FEBS).
• The High Court observed that indigenous and local communities, who either grow “biological resources” or have traditional knowledge of these resources, are the beneficiaries under the Biological Diversity Act.
• Thus, in return for their parting with this traditional knowledge, they are liable to receive certain benefits as FEBS.
• Hence, the above judgement has given impetus to the efforts of the National Biodiversity Authority as well as state biodiversity boards in a particular direction, which were struggling to implement provisions of the Act.

What are the takeaways?

• In one scenario, the Supreme Court has upheld the intellectual property rights of an MNC in the Monsanto case.
• On the other case, the High Court of Uttarakhand upheld the liability of another MNC, Divya Pharmacy, to share the benefits it was deriving from exploitation of local biological resources.
• Thus, it is critical to adopt a balanced approach, when there emerges a question of rights of corporations versus the rights of the populace.