Untenable interpretation

The infringement suit filed by PepsiCo India Holdings Pvt Ltd (PIH), Indian subsidiary of the US multinational corporation, against potato farmers in Gujarat is premised on an untenable interpretation of law on plant breeders in the country.  Yet, on the basis of a claim of an infringement of its potato variety by the accused farmers, the company makes an offer for a ‘settlement’, but with conditions. 

Both houses of the Indian Parliament passed the Protection of Plant Varieties and Farmers’ Rights (PPV&FR) Act in 2001.  As explained by M S Swaminathan, this would be the first Act in the world to simultaneously consider farmers’ and breeders’ rights. That makes the law unique. 

The opening lines of the legislation explain that it is meant to establish protection for both farmers and plant breeders. Our legislators in all their wisdom guaranteed rights to farmers as conservers, cultivators and breeders. 
In the case at hand, the rights of the defendant-farmers as cultivators of an IPR-protected variety are under question. 

To contain the rights of the breeder who holds a valid plant variety certificate vis-à-vis the farmers’ seed freedoms, the breeder is limited inter alia by a time period (15 years for crops) and in that time duration by a claim vis-à-vis the cultivator farmers only over any seed sold in a commercial manner in a package or container labeled with the breeder’s brand name.

Section 28 of the PPV&FR Act lays down that a certificate of registration for a variety confers exclusive right on the breeder to produce, sell, market, distribute, import or export the said variety. 

In the present case, PIH has been granted these breeder rights over its potato variety, namely FL 2027, which it imported from USA. The rights are for a term of 15 years: February 2016 to January 2031.

Section 39(1)(iv) of the PPV&FR Act recognises that farmers are entitled to save, use, sow, resow, exchange, share or sell their farm produce, including seed of an IPR-protected variety. 

The proviso to the section only puts an embargo on farmers with respect to the sale of branded seed of an IPR-protected variety. 

Section 39(1)(iv) makes it clear that the farmers’ seed freedoms as provided for therein are notwithstanding the breeder’s rights over the variety.

The infringement provision – Section 64 invoked by the company is ‘subject to the provisions of this Act’ and therefore can be said to be subject to Section 39 as well. The three provisions have to be read harmoniously. 

Potatoes don’t grow from a seed, but what is called a potato seed, a small tuber that has sprouts. 

Post-harvest if and when potatoes are too small for processing, they are unable to be sold. This leaves the farmer a leftover/rejected part from the harvest. 

The law allows farmers to freely use this vegetative propagating material and even sell both the potato produce and potato seed sans branding. 

According to the company, its potato variety was being marketed in India since 2009. That was the year when India’s PPV&FR Authority began issuing the very first plant variety certificates under the law.  The same year, the company chose to introduce its potato variety in the country under a commercial name FC5. Thereafter on February 16, 2012, PIH filed an application before the PPV&FR Authority for plant breeder rights for its FL 2027, which were granted to the company with effect from February 1, 2016. 

The company undertakes potato multiplication and production under contract farming with farmers through vendors. Under these arrangements, the company sells and supplies its potato variety, FL 2027/FC5. 

The defendant-farmers apparently did not have any direct contact with the company. There does not seem to be any contractual arrangement between the defendant-farmers and the company. 

If allegedly PIH’s potato seed reached the farmers through any other means, whether as FC5 or any other name, it raises the question of gaps in the seed traceability mechanism of both the company and the government seed functionaries. 

In such a situation too, a farmer is safeguarded by the legal provision (Section 42) on innocent infringement if at the time of such infringement, he was not aware of the existence of the breeder’s right, and a relief to the plaintiff in an infringement suit cannot be granted by court against a farmer who proves that.

This year in April, PIH initiated legal actions against four farmers and got an ex-parte temporary injunction against their use of its potato variety. But due to the negative publicity in the days leading up to the hearing on April 26, 2019, PepsiCo India was forced to take a more conciliatory stance. 

Before the learned commercial court in Ahmedabad, Gujarat, PIH submitted that it wants to ‘settle’ the dispute with the farmers. It suggested that either the farmers give an undertaking that they shall not use the registered variety or they should enter into an agreement with PepsiCo India to purchase seeds from it with a buy-back on terms and conditions that PepsiCo India has been offering to farmers of Gujarat. But given that the law is settled, there should be no scope for such an out of court settlement.

IPR are neither meant to be absolute nor unlimited. Both legislatures and governments have to ensure that they also meet public policy ends. 

Binding international rules such as the WTO’s TRIPS Agreement imposes high standards for IP protection in all fields of technology including seeds. 

Nonetheless, India made legitimate use of an option in TRIPS to go for a lighter version of IPR on plant varieties, rather than patents, keeping its farmer population and seed practices in mind. This cannot now be interpreted down and implemented to go against India’s farmers. 

Author is an independent legal researcher and policy analyst working on agro biodiversity issues