SC sets aside Delhi HC ruling against Monsanto

SC sets aside Delhi HC ruling against Monsanto

News:

Supreme Court upholds Monsanto’s patent claim on Bt cotton seed

Important Facts:

• India’s Supreme Court ruled that Monsanto’s patent for Bt cotton seeds is valid, overturning a judgment by the High Court of Delhi that said certain items such as seeds, plants and animals can’t be patented.

Background of the issue:

• The ruling is the result legal battles between Monsanto and domestic seed companies, led by Nuziveedu Seeds Ltd.
• In 2004 Monsanto entered into a sub-license agreement with domestic company Nuziveedu for an initial period of 10 years.
• The agreement had entitled the Indian firms to commercially exploit genetically modified hybrid cotton planting seeds with help of Monsanto’s technology within the limits of the agreement on the payment of a license fee.
• Local seed firms, which get licenses from Monsanto to sell genetically-modified seeds, used to pay a “trait fee” fixed by the government.
• Recently Nuziveedu Seeds was arguing that the U.S. company was not entitled to get any more money from them and had petitioned in the court to cancel Monsanto’s patent
• Soon after, Monsanto had lodged counter cases for patent infringements by Indian companies.
• The agreement was terminated in November 2015, giving rise to the patent suit.
• The Single Judge, in March 2017, restored the agreement and ordered the parties (Monsanto and companies like Nuziveedu) to adhere to their obligations under it.

Significance of SC ruling:

• Monsanto was facing legal challenges in the U.S. over allegations that its Roundup weed killer can cause cancer but after SC ruling Monsanto which faced the risk of losing revenues without a claim can utilize exclusive rights in India.
• The verdict may also boost foreign investors’ confidence about the validity of patents awarded to firms in India.
• The ruling may prompt some biotech companies to revive expansion plans that were placed on hold amid restrictions imposed by the government and local courts in recent years.
• SC ruling will bring certainty in the policy environment and looking to improve Indian cotton farmer’s competitiveness.