Monsanto v. Nuziveedu: Delhi HC holds Bt cotton seed to be unpatentable

In a judgment that affects multiple fields including agriculture, pharmaceuticals and intellectual property, the Delhi High Court held Monsanto Technologies’ patent claim on its Bt cotton seed varieties to be unenforceable in India..Monsanto Technology LLC and Nuziveedu Seeds Ltd had entered into a sub-license agreement under which the former sold seeds to the latter. In turn, Nuziveedu had to pay royalties for the use of such donor seeds..Nuziveedu used these donor seeds received from Monsanto in its breeding program to inherit the Bt cotton trait. According to Nuziveedu, the Bt cotton plant varieties developed by it have their own distinct characteristics and are different from the donor seeds variety initially provided by Monsanto..It argued that the gene or the method of transformation was not transferred to them and only seeds of the transgenic variety were given..Monsanto, on the other hand claimed that since the donor seeds (produced by their own patented technology) were used by Nuziveedu to develop new varieties, they should continue paying royalties as per the original sub-licensing agreement..The company sought for an ad interim injunction against Nuziveedu, claiming that the cause of action arose on account of the Nuziveedu companies continuing to ‘market and sell’ the genetically modified hybrid cotton planting seeds despite termination of the sub-license agreements..Monsanto stated that its patented cotton variety is a biotech invention which eradicates pests afflicting the cotton plant. It stated that the patent does not cover plants per se, but does cover components that can be termed microbiological processes and microorganisms, thus patentable under the Patents Act..The government had introduced certain guidelines, which put a cap on the maximum retail price of the seeds being sub-licensed by Monsanto, after which the company terminated its sub-licensing agreements and approached the Single Judge Bench of the Delhi High Court seeking compensation..Nuziveedu also filed a counter claim against Monsanto before the Delhi High Court, challenging the termination of the sub-licensing agreement..The Single Bench of Justice RK Gauba had held that Monsanto had wrongfully terminated the sub-license agreement for sale of its patented Bt Cotton seeds. The Court had further directed the company to continue supplying Bt cotton donor seeds under the 2015 sub-license agreements..However, the Single Judge Bench had rejected Nuziveedu’s plea that Monsanto did not have patent over the seed varieties. Subsequently, both Monsanto and Nuziveedu approached the Division Bench of the High Court by filing cross appeals..Nuziveedu was represented by Senior Advocates Aryama Sundaram and Jayant Bhushan along with Patent Counsel Essenese Obhan and Counsel Diya Kapur and Swathi Sukumar. Appearing for Monsanto were Senior Advocates Sandeep Sethi, (now Justice) Prathiba M Singh and Chander Lall..In a detailed judgment, the Division Bench of Justices S Ravindra Bhat and Yogesh Khanna observed that,.“At the outset, this court proposes to examine only the threshold challenge to the patent and not carrying out an analysis of whether prima facie the patent granted (or the claims under it) lacked inventiveness, or novelty or industrial application.”.With regard to the patentability of biological processes as argued by Monsanto, the Court observed that,.“The exclusion of transgenic plants and seeds propagated after hybridization from patentability under section 3(j) of the Patents Act, 1970, is congruent with the amendment of Article 53(b) of the EPC, wherein, patents cannot be granted in respect of plants or animals exclusively obtained by means of essentially biological process..The conclusion that the court draws therefore, is that transgenic plants with the integrated Bt. Trait, produced by hybridization (that qualifies as an “essentially biological process” as concluded above) are excluded from patentability within the purview of section 3(j), and Monsanto cannot assert patent rights over the gene that has thus been integrated into the generations of transgenic plants.”.The Court gave another reason for not granting patent to the Bt trait varieties. It observed that the trait was part of the seed and by itself, has no intrinsic worth. Without hybridization, it is inert and inanimate..It was held that the subject patent falls within the exclusion under Section 3 (j) of the Patents Act, and therefore the subject patent and the claims covered by it were unpatentable..The Bench also stated that grant of injunction against Nuziveedu with regard to marketing and selling its plant varieties would result in the violation of provisions of the Essential Commodities Act, as it would deprive thousands of farmers the right to access to seeds that were hitherto available to them..The order of the Single Judge directing Monsanto to continue with its obligations under the sub-license agreements was upheld. However, the Court allowed Monsanto to proceed with respect to the claim for damages in light of the sub-license termination notices issued..Read Judgment: