India: Monsanto v. Nuziveedu

Last Updated: 11 June 2019
Article by Dias Michelle Jerry

Monsanto Technology LLC Thru the Authorised Representative Ms. Natalia Voruz & Others (Appellants) v. Nuziveedu Seeds LTD. Thru the Director & Others (Respondents)

Decided on January 8, 2019 in the Supreme Court of India.

Facts: Monsanto entered into a sublicense agreement dated 21.02.2004 with Nuziveedu for 10 years. The agreement was extended and was ultimately terminated by Monsanto on 14.11.2015 due to disputes regarding payment of licence fee. Monsanto had prescribed a higher fee in the agreement while the statutory license fee was lower. Nuziveedu paid the fee by the statute which led to the termination by Monsanto.

Monsanto filed for a temporary injunction under Order 39, Rule 1 and 2 of CPC to restrain the respondents from using their registered trade mark "BOLGARD" and "BOLGARD II" and from selling and/or using seeds/hybrid seeds bearing the patented technology.

There was a Nucleic acid Sequence (NAS) which is not a living organism but a chemical created in a laboratory. Its patent claims include the development of two genes designated Cry2Aa and Cry2Ab from Bacillus thuringiensis strain. Each gene sequence is known for its ability to synthesize proteins with pesticidal properties. The claim of NAS was amended from chemical to a gene.

Issue: Whether injunction can be granted and whether the plaintiffs' patent had been infringed or not.

Held: Restored the Single Judge decision and left for it to decide the patent matter elaborately based on expert evidence.

Explanation: In response to the order of injunction respondents argued that their rights are protected under the Protection of Plant Varieties and Farmers' Rights Act, 2001. Appellant's patent was in violation of Section 3(j) of the Patents Act. Also Indian Seed Companies do not use the NAS in isolation nor the method of introducing the NAS into the plant described in the patent. The learned Single Judge observed that the suit required expert opinion for deciding injunction. And during the pendency of the suit, the parties shall remain bound by the sublicense agreement and licence fee governed by the laws in force. The learned Single Judge did not deal with or consider the counter claim for revocation of the patent as unpatentable. This was appealed to the Divisional Bench of High Court. It gave a summary judgement and upheld respondent's contention with respect to patent exclusion under Section 3(j) of the Act. Thus the counter claim of the respondents which the learned Single Judge did not consider, succeeded.

Arguments of Appellant- The suit instituted was for injunction and lack of patentability was never an issue. Respondents argued lack of patentability to invalidate the primary issue relating to infringement which was neither argued nor adjudicated by the learned Single Judge. A summary judgement was not appropriate for this suit because the issue for existence of the patent and objection under Section 3(j) of the Act was profoundly mixed question of law and facts it required formal proof and expert evidence at the hearing of the suit. Patented NAS is not the creation of any biological process is entirely the creation of the human intervention. It is only plant varieties and seeds which are covered by the PPVFR Act.

Arguments of Respondents- The NAS gene once it gets incorporated into the plant genome becomes a part of the plant and is expressed in every part of the plant, thus they are essentially biological process claims S.3(j) of patent act. Conventional breeding methods are practiced by the respondents. The product claims even if it represents merely a "gene" not a chemical it cannot be patented. NAS was never used in isolation by the Indian Seed Companies nor did they use the method described in the patent of introducing the NAS into the plant. The Indian Seed companies simply crossed one of the plaintiffs' plants with their proprietary Indian varieties which were suitable for cultivation in India, to develop a third/new cross­bred cotton variety which would have the Bt. trait from plaintiffs' variety. This would resist Bollworm in their own developed varieties. Thus, there is no infringement of the patent.

The matter went to the Supreme Court. It held that the patent matters cannot be deposed by Divisional Bench on a summary basis and hence, its order is vacated. It can be disposed only by elaborate suit instituted under section 9 of CPC. The SC restored the Single Judge decision and left for it to decide the patent matter elaborately based on expert evidence.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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