Delhi High Court grants relief to PepsiCo; sets aside order revoking patent of potato seeds used in Lay's

In a major relief for PepsiCo, the Delhi High Court recently set aside an order revoking the food and beverage giant's registration (patent) of plant variety FL 2027, a special potato variety which is used for making Lay’s chips [PepsiCo India Holdings Pvt Ltd v Kavitha Kuruganti]. .A division bench of Justices Yashwant Varma and Dharmesh Sharma set aside the judgment of a single-judge who had upheld the statutory authority's decision to revoke PepsiCo’s registration of FL 2027.The division bench rejected farmers rights activist Kavitha Kuruganti’s plea to restrain PepsiCo from suing farmers on grounds of infringement. Kuruganti had also sought directions to the company to uphold farmer’s rights as recognised under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act).However, the Court found no material to substantiate the allegations that PepsiCo had sued farmers in Gujarat to intimidate them or that registration of these suits was contrary to public interest.“We note that apart from a mere reference to various suits alleging infringement which are stated to have been filed by PepsiCo, the respondent-appellant [Kuruganti] failed to establish or prove that those suits were vexatious or that they had been instituted as part of predatory tactics of PepsiCo. It was incumbent upon the respondent-appellant to establish on the basis of material forming part of those suit proceedings that PepsiCo had commenced those actions merely to pressurize and intimidate farmers and that they were based on allegations totally frivolous or unsubstantiated,” the Court said..The division bench, therefore, ordered the authority constituted under the PPVFR Act to consider afresh PepsiCo's application for renewal of the registration. The application was rejected solely on the ground that registration of FL 2027 had been revoked. “The appeal of PepsiCo, LPA 590/2023 is allowed. The impugned judgment and order dated 05 July 2023 shall consequently stand set aside to the extent indicated above. We consequently also set aside the order of the Authority dated 03 December 2021 and the letter issued by the Authority dated 11 February 2022. The renewal application as made by PepsiCo shall stand restored on the file of the Registrar who shall dispose of the same in accordance with law and in light of the findings recorded hereinabove,” the Bench ordered..The dispute began in 2019 when PepsiCo sued a bunch of farmers from Gujarat for intellectual property right infringement as they were growing the FL 2027 potato plants. PepsiCo said that these farmers were not under its contract to grow the FL 2027 potatoes.The suits were later withdrawn.Meanwhile, farmers rights activist Kavitha Kuruganti initiated proceedings to revoke the registration of FL 2027 granted to PepsiCo. On June 17, 2019, a revocation application was filed alleging that the registration certificate was based on incorrect information and that the company had failed to comply with legal provisions.On December 3, 2021, the authority under the PPVFR Act revoked the registration of FL 2027 under Sections 34(a), (b), (c), and (h). Due to revocation of registration, PepsiCo’s application dated January 28, 2022 for renewal of registration was also rejected by the authority on February 11, 2022..PepsiCo challenged the order before the single-judge of the High Court.On July 5, 2023, the single-judge dismissed the case on the ground that PepsiCo had furnished incorrect information relating to the date of first commercial sale.While Pepsi had claimed commercialisation of the variety on December 17, 2009, it was found that FL 2027 was first sold in Chile in 2002.The single-judge also held that PepsiCo failed to present requisite documentation at the time of applying for registration as mandated under the PPVFR Act.This led to the appeal before the division bench. .After considering the case, the division bench concluded that PepsiCo would have derived no benefit or advantage in making a deliberate or conscious declaration of the date of first sale as December 17, 2009.“As would be manifest from the above, the mentioning of the date of first sale whether computed with reference to commercialization in Chile or in India did not adversely impact the right of the applicant to apply under the Act either on the date when the application was originally moved or even when it was filed in its revised form,” the Court said. It also disagreed with the single-judge’s findings on the issue of non-submission of relevant documents by PepsiCo.The Court, however, agreed with the single-judge’s finding that the mistake of styling FL 2027 as a “new” category was remediable and, in any case, not fatal to the cause especially since the Registrar had decided to process the same as relating to the “extant” category.The Court, therefore, set aside the single-judge’s order to the extent it held against PepsiCo.Kuruganti’s plea was rejected..Senior Advocate Dayan Krishnan along with advocates Dheeraj Nair, Anjali Anchayil and Aishna Jain appeared for PepsiCo.Kavitha Kuruganti was represented through Senior Advocate Colin Gonsalves and advocates Hetvi Patel and Umesh Kumar..[Read Judgment]