India: Nuziveedu Seeds Ltd. & Ors. v. Monsanto Technology LLC & Ors., C.M. Appl. 13348-13352/2017

In an appeal preferred over the decision of a single judge of the Delhi High Court, Nuziveedu counter claims in a suit of infringement that the patent granted to Monsanto is liable to be refused. The patent granted to Monsanto included a "nucleic acid sequence" and the process to insert this Bt. Trait gene into the cotton plant seed cell. This Bt. Gene protected the crop from Bollworm, a pest which attacks cotton. Monsanto had been supplying these Bt. Trait seeds to Indian companies such as Nuziveedu by entering into a licensing agreement. The dispute arose when Nuziveedu claimed to be obliged to pay the "trait fee" only, as fixed by the state government, and refused to pay the process fee to Monsanto as determined under the licensing agreement. In the present suit, relating to infringement of patent, Nuziveedu counter claimed that the patent granted to Monsanto falls within the ambit of Section 3(j) of the Patents Act, 1970, and hence the "nucleic acid sequence" cannot be termed to be an invention for which a patent can be claimed:

"Section 3(j): plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals"

They claimed that the Bt. Trait by itself is not useful nor has an industrial application unless it is integrated with "a plant cell, a seed, a transgenic plant or a plant variety" which falls within Section 3. The trait present in the sequence by itself cannot be sold to farmers. Also, any claims of Monsanto that the gene is a micro-organism excepted within 3(j) of the Act cannot be sustained as the gene in the present case, cannot exist separately and is not capable of reproduction for it to be treated as an invention.

Monsanto had only provided Nuziveedu donor seeds within which Bt. Trait was contained. Nuziveedu, for the purpose of selling seeds containing this specific trait of repelling Bollworm, had practiced traditional methods and natural biological process to integrate the trait in its own seeds unlike Monsanto which had induced the sequence in the seeds in laboratory conditions. The Bt. Trait that had been induced by Nuziveedu in the seeds cannot be detached by any existing technologies. And for those seeds, so developed Nuziveedu had also taken IP protection under the PPVFR Act, 2001.

Nuziveedu also claimed existence of certain rights under the PPVFR Act. Under Section 30 of the PV Act, Nuziveedu is lawfully entitled to develop its own variety out of the seeds provided by Monsanto subject to the conditions mentioned therein. Moreover, Monsanto could have entered into a benefit-sharing agreement as enlightened under Section 26 of the PV Act. Involuntary "use" of the gene by anyone cannot be termed as an infringement, as under Section 39 of the Act the farmers have a right to develop a new variety and are entitled to registration of the same.

Monsanto, on the other hand contended, that the legislative intent behind creating Section 3(j) of the Act is to exclude from patenting naturally occurring substances. "Nucleic Acid Sequence" which has Bt. Trait, has to be extracted from the genome of the bacteria, Bacillus thuringiensis. Therefore, while the patent granted does not cover a plant or an animal but includes microbiological processes that create transgenic varieties by extraction of gene thereof and hence, patentable under the Act. Moreover, nucleic acid sequence" containing the Bt. Trait, as extracted from DNA cannot be termed as forming a part of "a plant cell, a seed, a transgenic plant or a plant variety" and hence, it does not fall within Section 3(j) of the Act. It was contended that the suit patent involved processes to be undertaken at a laboratory for extraction of gene and inducing the same, and not naturally occurring processes. Thus, patent granted could not be said to be wrong as there is nothing which in the present case can exist naturally, neither the gene nor the integration thereof.

It was claimed that Monsanto's Bt. seeds could have claimed protection under the PV Act and not the Patents Act. But, on the other hand, it was argued by Monsanto that the PV Act only protects plant "varieties" which includes a plant grouping and excludes traits.

Tracing the history of the Patents Act, Monsanto pointed out that under the 2005 amendment, only process patents could be granted for products developed by chemical processes (including microbiological and bio-chemical processes). Patent would not be granted for the product per-se. But, this section was completely repealed and the legislative intent behind repealing this provision shows that even when a product is developed by a micro-biological or a biochemical process as in the present case, patent can be granted for the product and not merely the process.

It was reasoned by the Court that the process of extracting and integrating genes into the plant cells are "essential biological practices" for production and propagation of plants and thus, it cannot be patented. An "essential biological practice" in the current scenario would mean that, without much human intervention, hybridization of cotton seeds with the Bt. Trait can be achieved by following the steps for sexually crossing the genomes of the plants with those having Bt trait and those not having the same. The resultant effect of this crossing produces seeds having Bt. Trait. This was the process that Nuziveedu was undertaking in order to produce seeds having the said trait for repelling Bollworm with the help of the donor seeds provided by Monsanto. Thus, Monsanto cannot exert rights over seeds produced by such hybridization as it is only by an "essential biological practice" that Nuziveedu is producing such seeds possessing the Bt. Trait.

Moreover, it was concluded by the Court that there is no intrinsic value of the trait itself and they have to be considered as a "part" of the seed. It has to be integrated in order to be useful and not to remain inert. Thus, the patent granted had to be refused on the ground of falling within Section 3(j) of the Act. Monsanto was recommended to obtain protection under the PV Act, 2001.

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