About PepsiCo.

A global multinational F&B company, PepsiCo., is renowned for its products all over the world. It has become a household name owing to its popular brands like “Pepsi”, “Mirinda, “Lays”, “Uncle Chipps” “Mountain Dew”, “Quaker”, etc., PepsiCo has grown into one of the largest and most recognizable companies in the world, with a diverse portfolio of well-known brands.

Need for development of FL2027/ FC5

FL2027, commercially known as “FC5” is a potato variety that was developed and introduced in India by Pepsi Co., owing to crop failure in India that led to a mass shortage of Lays Chips. Since this variety has a rather lesser requirement for moisture, it became an ideal source for creation of potatoes. However, since it takes longer to cook, the same is unfit for regular household purposes.

Claiming Rights in India

Potato variety FL 2027 was developed in USA by Dr. Robert W. Hoopes. Thereafter, the rights under FL 2027 were transferred to Recot Inc., a group company of PepsiCo Inc. Subsequently, PepsiCo applied for the registration for FL 2027 in 2011 as a plant variety in India and was granted registration in the year 2016. PepsiCo entered into an agreement with group of farmers in India to grow FL 2027 that were brought back by PepsiCo at fixed price.

Plant Variety Rights in India

In India, individuals are not granted plant patents as the country has adopted an approach that is socially viable and accords rights to the developer of a plant variety. The Patent Act, 1970, specifically section 3(j), excludes seeds, variety, species of plants and biological processes for plants production and propagation from being considered as an invention eligible for patent protection.

However, in order to be compliant with the global IP regime and considering that India is a signatory to the TRIPS Agreement that serves as the grundnorm for IP legislations all around the world, India introduced the Protection of Plant Varieties and Farmers Rights Act (PPVFR) in the year 2001. This legislation safeguards the rights of plants breeders and encourages the development of new plant varieties while also prioritizing the welfare of the farmers.

The Act particularly allows registration of any variety that is new/ extant/ farmer’s variety or an essentially derived variety provided they are novel, uniform and stable and subject to restrictions, as laid down under the Act.

Facts that lead to the initiation of the PepsiCo. challenge

As iterated, Pepsi Co. had obtained the relevant IP Rights over the FC5 variety that were licensed to certain farmers who cultivated the same and were brought back by the company at a fixed rate. In 2019, Pepsi Co. initiated a legal action against a few farmers accusing them of cultivating the said variety without obtaining any license from PepsiCo.

The same received major backlash and the case was withdrawn pursuant to a few discussions with the government. Subsequently, Kavitha Kuruganti, a prominent farmer rights activist and the convenor of the Alliance for Sustainable and Holistic Agriculture, filed a petition before the Protection of Plant Variety and Farmers Rights Act Authority for revocation of the registration that had been granted to Pepsi Co, contesting that the rights had been granted based on false information that had been furnished by Pepsi Co. to seek registration. It was further contested that the assignment deed transferring the rights from Robert to the Pepsi’s subsidiary was also insufficiently stamped.

The application for revocation was successful and the protection granted to Pepsi Co., was revoked under Section 34 of the Act and in light of the issues raised in the plea submitted by Kavitha. During the proceedings, the PPVFR Authority also acknowledged the hardships faced by the farmers who were sued by PepsiCo. over unlicensed cultivation of the FC5 potato variety.

Issues & Proceedings

Since Pepsi lost the battle in securing IP over its plant variety, an appeal was filed in the Delhi High Court seeking to overturn the revocation of FC5. Pepsi vehemently argued that Kavitha had no locus to appear before the Court and that mere technicalities should not lead to the revocation of the plant variety. Pepsi further argued that despite the technicalities, the Registrar had accepted the application for registration and had accordingly granted rights to the FC5 plant variety.

The Delhi High Court rejected the appeal finding no merit in the same and citing that the provisions of Section 34 of the PPVFR Act were rightfully attracted since the Authority has the right to revoke the registration if the applicant supplies fraudulent information. The application filed for registration in itself was flawed since it did not seek registration as an extant variety and rather filed as a new variety despite having been provided with a chance to rectify the same. Further, the date of commercialization of the plant variety was erroneous and the same could not be considered as a bonafide mistake.

The Court stated that “The appellant is now suffering for its own mistakes and for its casual manner of making application seeking the registration. The appellant cannot pass this blame on the Registrar or claim equity for its own folly.”. The Court added that “In the present case, the Registrar in the first instance had complied with the Proviso to Section 20(2) of the Act by providing the appellant with an opportunity to rectify the deficiencies in its application. The appellant did not fully take benefit of this opportunity and, therefore, cannot now be heard to complain of the consequences of its own failure.”. However, the Court did caution the Registrar to require compliance under the Act seriously.

The Court further clarified the stance on the fact that to initiate proceedings for revocation of registration, “any person interested” shall include to mean any “public-spirited person” who can file a plea in the event a registration is not in public interest.

Impact

The aforementioned case highlights the concerns that traditional farmers in India face at the hands of the corporate giants. Considering lack of funds and knowledge, farmers generally give into the harsh demands of such entities.

The judgment mostly focuses on the lacunas in the application made and clarifies the stance on who can be considered within the ambit of “persons interested”. The Court made a passing reference as to the fact that the Act recognizes the rights of farmers and breeders to strike a balance between the two, however, the Court refrained from diving deep into the said concept.

The present case hence highlights how while the object of the Act is to create balance between the rights of the two, there’s an apparent lack of clarity regarding achieving such balance between the breeder and the farmer. India. The petition raised important questions about the implications of granting exclusive rights to seed varieties in an agrarian economy.
 

Disclaimer:
The images/ logos contained within the article are for representative purposes only and the relevant IP rights vesting in the said images/logos belong to the respective owners. Areness does not claim any rights over the same.

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