At the heart of this issue is a potato known as the FC5 potato (registered in US as FL2027). Compared to other types, the FC5 variety, has a 5% lower moisture content. This variety is said to be better suited for processing. The breed offers characteristics including resistance to herbicides and diseases caused by insects, bacteria, fungi, or viruses, according to patent records. In 2005 after being first registered in US as FL2027 they were first commercially used in India in 2009. PepsiCo later in June 2011 applied for (plant variety protection) certificate for the potato variety in India. Accordingly in February 1, 2016 the certificate of registration was granted by the Registrar in favor of (PepsiCo). PepsiCo (India) Holdings Pvt. Ltd.'s PVP (plant variety protection) certificate for the FC5 potato was revoked on December 3, 2021 by order of the Protection of Plant Varieties and Farmers' Rights Authority (PPVFRA) Chairperson. This has been done under the ambit of the Protection of Plant Varieties and Farmer's Act, 2001. This judgement is seen by many to be a precedent setting judgement with far reaching implications for the Intellectual Property regime in India. Also, this move has been hailed as a significant step toward protecting farmers' rights, which has been the primary motive behind this legislation, but on the other, it has been viewed as a danger as it compromises the stringency of the intellectual property protection laws, which may discourage foreign market investment and innovation in India.
Background of the Dispute
PepsiCo (India) Holdings Pvt. Ltd. in April of 2019 filed a lawsuit alleging infringement on its patent for the FC5 potato and demanded for over Rs.1 crore from each nine Indian farmers. Both political parties and farmers reacted negatively to the patent infringement case. PepsiCo, though, quickly withdrew the lawsuit “after discussions with the government”. In a statement, it said that it was “relying on the said discussions to find a long term and an amicable resolution of all issues around seed protection”.
Concerned about how the registered variety will affect the farmers' ability to support their families, Ms. Kavitha Kurungani, a farmer's rights activist then submitted an application to revoke the certification in June 2019. She had asked for the protection to be revoked for a number of reasons, including inaccurate information supplied by PepsiCo and claims that the protection had not been granted in the public interest.
Contention of Both the Parties
PepsiCo contended that since it is the developer of the FC5 potato variety and has even registered the characteristic in 2016, giving them exclusive ownership of the particular protected type of potatoes. PepsiCo further based its argument on Section 64 of the Protection of Plant Varieties and Farmers' Rights Act, 2001 which specifies that when someone who is not the breeder, registered agent, or licensee sells, exports, imports, or produces a variety without the breeder's authorization and does so in a way that confuses the public, that person has infringed a right established by it.
Farmers argue that the seed was available on the market for a very long time before PepsiCo registered it, hence they are entitled to protection under Section 39 (1) (iv). The reason PepsiCo took action in 2019 when it could have started much earlier is brought up by this. In accordance with the provisions of Section 39 of the Act, "a farmer shall be deemed to be entitled to save, use, sow, re-sow, exchange, share or sell his farm produce including seed of a variety protected under this Act in the same manner as he was entitled before coming into force of this Act". According to the law, it was claimed that farmer rights prevailed above breeder rights.
Furthermore, it was argued that PepsiCo India's certificate of registration was granted based on the provision of false information. For instance, even though Dr. Hoopes was listed as the potato breeder, several other organizations, including Frito-Lay North America, filed the application. There was no submission addressing the assignment deed between Frito-Lay and PepsiCo India; only an assignment deed between Dr. Hoopes and Frito-Lay without the required stamp was made as evidence.
Lastly it was said that it was contended that the multinational company had harassed the poor farmers by bringing such huge cases against them and thus it was a matter of public interest.
Revocation of the varietal registration and the reasons thereof.
- The claim that there was an assignment between Frito Lays and PepsiCo India was rejected by the authority since no required paperwork or special assignment deed had been submitted. As a result, In accordance with Sections 34(b), (a), and (c), the certificate was issued to a person who was not qualified for protection, was based on false information submitted by the applicant, and the breeder failed to provide the Registrar with the information, documents, or materials required for registration. The authorities observed that the Registrar had only swiftly glanced over the information without confirming its accuracy and comprehensiveness.
- It was claimed that the fact that some farmers faced the imminent threat of paying hefty fines for allegedly violating rights that didn't even exist caused them great difficulty. According to Section 34(h), this was against the public interest because even "without being the legitimate breeder or without being the legitimate breeder or his successor and also not being the assignee of the breeder of the potato variety FL 2027, the Registered Breeder (PepsiCo) exercised his Plant Breeder's right to file a suit for infringement against farmers". It was noted that "the registrar being protector of farmers' rights, violated the rules and this has caused hardship to farmer and other."
Implications of the Decision & Conclusion
- As a win for farmer rights
The ruling is viewed as a significant victory for Indian farmers and establishes a precedent that anything endangering a farmer's right under section 39 should be treated as an issue of public interest. This ruling would serve as a deterrent to any other seed or food corporation that attempted to violate India's lawfully guaranteed farmer seed freedoms.
- As a benchmark for handling IPR laws' procedural issues
The judgement exposed the multiple procedural flaws in the issuance of certificates for plant variety registration. The authority highlighted that several lessons should be learned from this instance to safeguard both farmers' and plant breeders' rights. In accordance with the Act and its rules and regulations, the registrar was tasked with creating a standardized document review process for applications of registration of plant types. Additionally, it was advised that the Registrar form a committee that would provide in-depth findings on how to prevent similar occurrences in the future.
- As a representation of inadequate IP enforcement and flaws in the system
The case highlighted a number of flaws in the registration of plant varieties in India, with a lack of sufficient documentation serving as the primary justification for revocation in this instance. The business had been operating in the nation for many years and had been enjoying the privileges for the last five. Additionally, its revocation on the grounds of public interest would discourage plant breeders from making investments and conducting business in India.