Ecological Economics 49 (2004) 187 198

www.elsevier.com/locate/ecolecon

Diffusion of agricultural biotechnology and intellectual property

rights: emerging issues in India
N. Lalitha *
Gujarat Institute of Development Research, Ahmedabad, Gujarat, India
Received 15 February 2004; accepted 25 March 2004
Available online

Abstract
Agriculture in developing economies is rural based with a majority of poor people dependent on it. Hence, any new
technology that would result in improving the crop yield or reducing the cost will be highly useful. Particularly, biotechnology
innovations have several useful applications in agriculture and are useful for developing countries. However, when such new
technologies are protected by intellectual property the implications are different. The plant protection system available in India
enables the farmer to save, use, sow, resow, exchange, or share the seeds of protected variety, besides offering protection on
farmers variety, extant variety and essentially derived variety. Such a system has scope for adoption of new technology as well
as diffusion of the same. Whereas plant protection could boost research in the area of plant biotechnology by both public and
private bodies, it could also result in higher prices for seeds, thus naturally excluding the small and marginal farmers from
accessing such new technology.
D 2004 Elsevier B.V. All rights reserved.
Keywords: Agricultural biotechnology; Intellectual property rights; India

1. Introduction
Agriculture in developing countries is predominantly rural based with a vast majority of poor people
dependent on it. Hence, any new technology that will
result in improving the yield or reducing the cost of
production will also directly reduce poverty and indirectly help the poor by lowering the price of food and
by creating more employment opportunities. Traditionally, technical changes have occurred as on-farm experimentation, adapting different cropping pattern, and

* Tel.: +91-79-3742-366x368; fax: +91-79-3742-365.

E-mail address: lalitha@gidr.ac.in (N. Lalitha).
0921-8009/$ - see front matter D 2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.ecolecon.2004.03.022

such improvements were kept out of intellectual property protection. For instance, during the Green Revolution (GR) period in India, many hybrid and high
yielding varieties were introducedparticularly in rice
and wheat. These were the types of seed variety that
can be replanted each year, which made GR very
successful. Furthermore, these seeds were then not
protected by any intellectual property rights (IPR)
measures. It was only after the Uruguay Round of talks
in 1994 that IPR was extended to agriculture, mostly
due to the insistence of developed countries, although
some form of protection already existed in a number of
developed countries. While the objective of providing
protection is to promote innovation activities in agriculture, such IPR protection could limit the diffusion of

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N. Lalitha / Ecological Economics 49 (2004) 187198

technology by making agriculture more market-dependent and create more inequities in income and distribution partly as a result of size disparities.
There are three perspectives which are often discussed in the context of diffusion of technology.
Diffusion of technology, in Economics, is characterized as involving the replacement of an old technology
with a new one. In general, the characteristics of innovations identified as being most important in determining their rates of diffusion are their relative
profitability and the required investment. According
to this economic perspective, the delay in diffusion
relate to uncertainty and risk, and lack of information
about the new technology. In such cases, the degree of
technical complexity or novelty of an innovation may
be an important factor inhibiting diffusion (Basant,
1988). Applying this to seed technology, we observed
that while Green Revolution made rapid strides in India
and farmers adopted it on a large scale, it did not
entirely replace the existing technology of using
farm-saved seeds or the traditional cropping pattern.
As commercialization started picking up, farmers
dependency on inputs from markets increased. The
other question was whether the farmers with small
and marginal land holdings would adopt the HYVs.
However, several research studies have shown that
small farmers do adopt new technologies (Shah et al.,
1991; Muthiah, 1971). These studies also observed that
the switchover from traditional to newer varieties has
been more widespread among small farmers than
among large farmers.
The role of diffusion agencies is emphasised in the
geographic perspective. The establishment of diffusion
agencies through which innovation is adapted to the
regional specifics to make it appropriate for a larger
population and induce adoption through aggressive
propaganda measures is the salient feature of the
geographic perspective on diffusion of technology
(Basant, 1988). This perspective of diffusion emphasises the simple but important fact that unless some
institution makes the innovation available at or near the
location of the potential adopter, by establishing a
diffusion agency, effective diffusion of technology
does not take place. In Indian agriculture, the agricultural extension services provided by the central and
state governments and agricultural universities serve
this purpose. Seed companies and seed distributors also
play a crucial role in disseminating knowledge about

newly developed seeds and reaching the farmers with

the newly developed seeds by providing line of credit
or using promotional measures. Here the role of extension workers becomes very important. During the GR
period, the extension workers, through the Training and
Visit (T&V) program played a significant role. T&V
extension suited the rapid dissemination of broadbased crop management practices for the high-yielding
wheat and rice varieties that were released since the
mid-1960s. But when new varieties like the transgenic
ones are available, these diffusion agencies and the
extension workers in the public and private sectors will
have to play an active role in educating the farmers
about the salient features of the seed, the nature of
planting, requirement of fertilizer, timing of pesticides
application etc. Adoption of new technology will be
easy only if the farmers have adequate information
about the new technology.
The economic history perspective of diffusion
emphasises that innovation continuously undergoes
technological improvement with different adopters
and adoption to an increasing variety of users (Basant,
1988). According to this, diffusion and innovation
overlap. When diffusion and innovation overlap, the
profits of the original innovator declines. This is when
protection of intellectual property rights becomes
important for the innovators, especially in plant biotechnology.
One of the recent developments in plant biotechnology is in the area of genetically modified organisms
(GMOs). Plant biotechnology refers to the alterations
made in some of the basic traits of crops with the
objective of enhancing the agricultural productivity or
improving the value of the agricultural products by
increasing the shelf life and availability of the product
even during off seasons or by providing improved and
hybrid seeds. Private investment in biotechnology
research is far ahead of the public investment in
developed countries ($5 billion), although public investment in biotechnology ($125 million) with the
purpose of benefiting the farmers and consumers is
increasing in developing nations (Qaim, 2001). Such
huge investment has resulted in the demand for
strengthening the IPRs in agriculture.
In this paper, an attempt is made to discuss the
options available in providing IPRs in agriculture,
which becomes essential with the growth in biotechnology-based innovations in agriculture. It also discusses

N. Lalitha / Ecological Economics 49 (2004) 187198

the status of biotechnology research in a developing

country like India and highlights the features of plant
protection available in India. The next section also
discusses the issues that emerge from providing protection to plant varieties such as transgenics.

2. IPR options in agriculture

Under the Trade Related Intellectual Property
Rights System (TRIPS), developing countries can
choose to provide patents or develop a sui generis
system to protect innovations in agriculture. They also
have a third option of joining the Union International
Pour la Protection Des Abstentions Vegetables
(UPOV). UPOV has been an obvious choice for many
countries between the tough standards of patents and
the task of developing a sui generis system as it
provides an off-the-shelf solution to developing such
legislation. India has chosen to develop a sui generis
system, which is known as the Protection of Plant
Varieties and Farmers Rights Bill 2001 (referred to as
Indian Plant Act in this paper). These are discussed in
the following paragraphs.
Under Article 27.3 (b) of the TRIPS Agreement,
members of the World Trade Organisation (WTO) may
exclude from patentability plants and animals other
than microorganisms and essentially biological processes for the production of plants or animals other
than nonbiological and microbiological processes.
However, members shall provide for the protection
of plant varieties either by patents or by an effective sui
generis system or by any combination thereof. Under
this provision, all plants and animal varieties produced
by asexual methods of production become eligible for
patent protection or sui generis protection or both. This
stipulation extends IPR protection to advances made in
plant genetic engineering and plant biotechnology.
Accordingly, a plant or a part of the plant can be
protected under patents or plant variety protection or
plant breeders rights (PBRs). Not all the countries
have protected their plant varieties. While the US
believes that anything under the sun made by man is
patentable, there is a considerable amount of resistance
in the European Union. After a decade of discussion in
the various policy bodies, the European Union passed
a new directive on the Legal Protection of Biotechnological Inventions in July 1998. The European direc-

189

tive states that an element isolated from the human

body or otherwise produced by means of a technical
process including the sequence or partial sequence of a
gene may constitute a patentable innovation. Although
plant and animal varieties are still excluded, farmers
privilege to reuse patented plants or animals has been
allowed. Denmark, Finland and Ireland have accepted
this definition, and patent protection is available in
these countries. While Germany required more amendments to go for patents in this area, Italy and Netherlands have objected to this concept. Austria and France
have decided to wait for the time being. Canada and
Norway exclude plant and animals per se from patentability, including their varieties and even define microorganisms narrowly. Developing countries, such as
Argentina, Brazil and the Andean Group, that have
implemented TRIPS, so far, only allow patents for
microorganisms and microbiological processes excluding plants, animals, genes and other biological
material even if isolated by technical processes. These
countries have also allowed for compulsory licenses
and research exemptions in their patent laws (Watal,
2001; Biotech International, 2001).
A plant or plant variety becomes eligible for protection if it satisfies the criteria of stability, novelty,
nonobviousness, uniformity and being distinct, which,
however, creates conflicts and differences in defining
the criterion of protection. Most developed countries
now recognize that novelty is met if the claimed
biotechnological product or process does not exist in
the prior art.1 Since nonobviousness is difficult to
establish in plant varieties, a lower standard is used,
which requires that plants or varieties for which protection is sought must be distinct, i.e., must possess a
combination of characteristics distinct from earlier
plant varieties and should not have been commercialized before. Thus, more discoveries on the plants
grown in the wild may be protected provided other
criteria are met. It may be difficult to technically
replicate or establish the industrial applicability of the
biotechnological inventions in the same way as chemical or mechanical inventions. While replicability is a
criterion for patent grants of biotechnological inventions, uniformity and stability are requirements under
the law governing plant variety protection. Further
fulfilment of disclosure requirements of patent law is
1

This paragraph was drawn from Watal (2001).

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N. Lalitha / Ecological Economics 49 (2004) 187198

difficult in the case of biological materials, where, in

addition to a detailed written description, a sample of
the protected material is deposited with the depositories, particularly where this is necessary to replicate the
process or product claimed.
Patents are the strongest form of intellectual property protection in the sense that they allow the rights
holder to exert the greatest control over the use of
patented material by limiting the rights of farmers to
sell, or reuse seed they have grown or other breeders to
use the seed (or patented intermediate technologies) for
further research and breeding purposes. One of the
concerns in providing patent protection to biotechnology-based research is that it could lead to patenting of
research tools or the grant of broad patents that could
potentially block further useful research. Under TRIPS,
developing countries can choose to provide patents or
develop a sui generis system. Countries also have a
third option of joining UPOV. UPOV has been an
obvious choice for many countries between the tough
standards of patents and the task of developing a sui
generis system as it provides an off-the-shelf solution to
developing such legislation. UPOV appeared as an
international agreement in 1961 for administering the
rules on plant variety protection and gave a new thrust
to the recognition of plant breeders rights in many
countries. The main advantage of the 1961 UPOV
Convention, as revised in 1978 and 1991, is the
reciprocal national treatment or the same treatment to
foreign right holders as accorded to nationals for the
protection of new plant varieties from member
countries. Unlike other subjects under TRIPS, there is
no mention of adherence to UPOV in TRIPS, perhaps
due to the fact that there was no agreement among
industrialised countries regarding the details of an
effective system of protection for plant varieties.
Although TRIPS only specifies that there should be
a patents/sui generis regime, or both, pressure has been
exerted on various countries to join UPOV in the
context of bilateral trade agreements. The purpose of
the UPOV Convention is to ensure that the member
states acknowledge the achievements of breeders of
new plant varieties, by making available to them
exclusive property rights, on the basis of a set of
uniform and clearly defined principles. The minimum
period of protection increased to 20 years (25 years for
vines and trees) in the 1991 version (from 15 and 20
years previously). The 1978 Act allowed breeders to

use protected varieties as a source for new varieties,

which could then be protected and marketed themselves. The 1991 Act has preserved the breeders
exception but the right of the breeder extends to
varieties, which are essentially derived from the
protected variety, that cannot be marketed without the
permission of the holder of the original variety.
Essentially, UPOV 1991 permits farmers to reuse
their own crop for seed purposes on their own holdings
but does not allow for formal sale. In contrast, TRIPS
only requires that there should be some form of IP
protection for plant varieties and does not define in any
way the exceptions that may be provided to the rights of
owners of protected varieties. Because of the restrictive
rights of farmers in UPOV 1991, although some of the
Asian countries allowed patenting of microorganisms
and microbiological processes even before this was a
TRIPS requirement, not all of them became members
of UPOV other than China until mid-2000. Given the
ambiguity in defining the term effective, and the
leverage available in UPOV 1978, following UPOV
1978 would be a preferred option for many, although
presently, membership to UPOV 1991 alone is open.
Apart from the use of patents and plant varieties
protection, intellectual property in plants can also be
appropriated by technological means. For instance,
crops such as commercial hybrid of maize cannot be
reused if hybrid yield and vigour are to be maintained.
This characteristic of some hybrids confers a natural
form of protection by which seed companies can more
readily capture a return on their investment through
repeat seed sales (Report of the Commission on
Intellectual Property Rights (RIIPRDP), 2002). These
are the types of IPR options available in plant protection. In the following paragraphs, we discuss the sui
generis system as adopted in India.

3. Status of biotechnology in India

With the establishment of National Biotechnology
Board (NBTB) in 1982, a move was made to
develop biotechnology in India. One of NBTBs
tasks was to coordinate the biotechnology research
done by various agencies like the Department of
Science and Technology, Department of Atomic
Energy, Council of Scientific Research, Indian council
of Agricultural Research, Indian Council of Medical

N. Lalitha / Ecological Economics 49 (2004) 187198

Research and various universities. NBTBs role was to

improve research initiatives on BT, develop infrastructure and skills required for R&D in BT and other
strategies like bio-safety, regulation, intellectual property rights, etc. In 1986, the Department of Biotechnology (DBT) replaced NBTB. Under this move,
infrastructure and research facilities were created;
besides the facilities for maintenance of cell lines,
acquisition of research biological at a central point
and distribution was created. Under DBTs guardianship, financial institutions started encouraging investments in BT commercialization by entrepreneurs. An
interface organisation called Biotech Consortium of
India was established to serve as a link between
research organisations and industry located either in
India or abroad. A survey of Indian patents in biotechnology during 1972 1988 carried out for the Department of Biotechnology and subsequently updated until
1991 showed that patenting in biotechnology is foreign-dominated with nearly 75% of the patents owned
by foreigners. Predominantly, patents related to the
pharmaceutical sector covered processes for the preparation of antibiotics, vitamins, enzymes, antibodies
and vaccines, although patenting also covers chemicals such as alcohols and polysaccharides. In the
agricultural sector, it covers plant growth regulators,
veterinary vaccines, plant cells and tissue culture. In
the food industry, dairy and fish products, yeast and
food additives, starch products, glucose and fructose
syrups are covered by the biotechnology patents.
However, what is significant is that biotech patents
are marked by a shift towards newer areas employing
gene manipulation techniques.
Huge resources are spent on introducing new
traits in plants through GMOs, and all over the
world, the field of transgenic crops has been expanding ever since such products were introduced in
1996. It is considered that use of transgenic crops
results in sustainable and resource-efficient crop
management practices, aside from reducing the use
of pesticides in crop production, and thus impact
positively on biodiversity (James, 2001). Because of
these advantages, the total land area used for transgenic crops increased from 1.7 million ha in 1996 to
58.7 million ha in 2002. In the United States alone,
the total land area used for these crops increased
from 1.5 to 39 million ha (majority under transgenic
cotton), where patents and UPOV 1991 protect

191

innovations in plant varieties. In 2000, a total of

13 countries, 8 industrial and 5 developing countries,
grew GM crops. Although plant biotechnology is
considered to provide solution to the growing food
insecurity among developing countries, lack of appropriate and concrete answers to the concerns raised
relating to the environment have induced the developing countries to tread cautiously in the area of
transgenic crops. One reason for the slow spread of
transgenic crops in developing countries is that
governments in many developing countries are withholding approval for the release of GM crops due to
their insufficient technical, financial and infrastructure capacities to assess GM crops for biological
safety. In some developing countries, even if the
technical capacity to regulate for bio-safety is strong,
approvals for GM crops have been delayed because
of political pressures from local and international
anti-GM activist groups and uncertainty regarding
consumer acceptance of GM products in international markets. GM crop technologies created by private
companies restrict technology transfer to poor farmers in poor countries because of the privately held
intellectual property rights. Lack of protection for
intellectual property rights in developing countries
demotivates the entry of the private sector.
Research in this area is nevertheless expanding. For
instance, there are about 50 public research institutions
in India, which are engaged in modern biotechnology
tools for agriculture. At least 10 of these are engaged
in plant genetic engineering with rice, chickpea, oilseeds, cotton and number of horticultural products.
Furthermore, there are about 45 private and foreign
companies carrying out research in agricultural biotechnology (Qaim, 2001). However, as Table 1 shows,
the transgenic lines in advanced stage of development
for field trials are in the private sector. Most of the
crops have been developed elsewhere and Indian
manufacturers are back-crossing the local hybrids with
transgenic seeds to develop commercially viable
hybrids that can be grown in different agroclimatic
regions of the country, by paying a license fee. Once
they are successful, the Indian manufacturers can
register their essentially derived varieties under the
Indian Plant Act. Already, such a variety owned by
Monsanto of the United States has been obtained by
the Maharashtra-based MAHYCO (Indian collaborator
of Monsanto) on payment of license fee to introduce

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N. Lalitha / Ecological Economics 49 (2004) 187198

Table 1
Transgenic lines in an advanced stage of development for field trials in private sector
Organisation

Crop

Purpose

Ankur Seeds, Nagpur

Hybrid Rice
International, Gurgaon
Indo-American Hybrid
Seeds, Bangalore
MAHYCO, Mumbai

Cottona
Rice

To generate plants resistance to lepidopteron pests

To develop plants resistant to lepidopteron pests
and herbicide tolerance
To generate plants resistant to viral and fungal attacks

Cottona

MAHYCO, Mumbai
MAHYCO, Mumbai
MAHYCO, Mumbai

Corna
Pigeonpea
Rice

MAHYCO, Mumbai
MAHYCO Research
Foundation, Hyderabad
Proago PGs (India), Gurgaon
Proago PGS (India), Gurgaon

Mustard
Rice

Proago PGS (India), Gurgaon

Syngenta India, Pune

Tomato

Mustard
Tomato,a Brinjal,a
Cauliflowera and cabbagea
Cauliflowera
Cotton,a Maizea

To generate plants resistance to lepidopteran pests

and herbicide glyphosate
To generate plant resistant to lepidopteron pests
For transformation work
To generate plants resistant to lepidopteron pests,
bacterial blight and sucking pests
To generate plants tolerant to herbicide
To generate plants resistant to bacterial blight
To develop superior hybrid cultivars
To generate plants resistant to lepidopteron pests
To develop superior hybrid cultivars
To generate plants resistant to lepidopteron pests

Source: Sharma et al. 2003.

a
Transgenic developed elsewhere are being back-crossed to inbred lines to develop commercially viable hybrids that can be grown in
different agro-climatic regions of the country.

transgenic or Bt cotton in India. This has been

commercially approved for sale in a few states. As
evident from Table 1, much of the research on
transgenic cotton is focused on developing plants that
are resistant to lepidopteron pests. This is because
cotton cultivation utilises about 9 million ha and
accounts for roughly 50% of pesticide consumption
in India. Cotton cultivation in India has been plagued
with rising costs of cultivation, ineffective pesticides,
adulterated seeds and other factors leading to consecutive crop failures, and heavy indebtedness have led to
suicides by farmers. This explains the large-scale
interest of the private sector to introduce transgenic
cotton that will be resistant to pests. In simple terminology, Bacillus thuringiensis, or popularly known as
Bt technology, provides farmers an inbuilt pest management system. Although officially, Bt cotton was
released in a few states in India in 2002, unconfirmed
reports point that Bt cottonseeds were sold before they
were officially released and have already been sold in
Punjab where it was not officially released earlier. In
another state, farmers continued to use a hybrid
variety of a private company, which is said to have
similar characteristics of transgenic cotton seeds.
These two cases of IPR infringement had already

come to surface and in the latter case, a legal decision

is pending.
3.1. The Indian Plant Act 2001
The attitude of the Indian government until recently was preventive in providing IPRs in plants. At
present, however, as the transitional period allowed
for India is drawing to a close, reform measures are
being taken in sectors where the current level of
protection in India is less than that suggested in the
WTO Agreement. Therefore, in August 2001, Government of India (GOI, 2001) passed the Indian Plant
Act 2001. This is a sui generis system that provides
for the protection of plant varieties, the rights of
farmers and plant breeders, and encourages the development of new varieties of plants. It also covers
aspects relating to the use of genetic material, compensation to farmers and protection to essentially
derived varieties. Table 2 shows the similarities and
differences between TRIPS, UPOV 1991 and the
Indian Plant Protection Act. As is evident, the Indian
Act combines some of the features of UPOV 1991.
According to the Indian Plant Act, a new variety,
extant variety,2 which includes the farmer variety, can

N. Lalitha / Ecological Economics 49 (2004) 187198

be registered under this Act. A new variety shall be

registered under this Act if it conforms to the criteria
of novelty, distinctiveness, uniformity and stability.
An extant variety shall be registered under this Act
within a specified period if it conforms to the criteria
of distinctiveness, uniformity and stability. An essentially derived variety (derived from an initial variety)
is registered with the Registrar. A variety, according
to the Indian Act, is said to be novel if, at the date of
filing of the application for registration for protection,
it has not been sold or otherwise disposed of, by or
with the consent of its breeder or his successor for the
purposes of exploitation of such variety (a) in India,
earlier than 1 year; or (b) outside India, in the case of
trees or vines earlier than 6 years, or in any other
case, earlier than 4 years, before the date of filing
such application. It is said to be distinct if it is clearly
distinguishable by at least one essential characteristic
from any other variety whose existence is a matter of
common knowledge in any country (this is not
mentioned in other type of protections) at the time
of filing of the application. A variety is said to be
uniform if its essential characteristics remain unchanged after repeated propagation or in the case of
a particular cycle of propagation at the end of each
such cycle. More importantly, in order to protect the
interests of the local communities, the Act elaborates
on the issue of benefit sharing. The Act clearly points
out that benefits will occur to (a) only persons or
group of persons constituting citizens of India, or (b)
firm or governmental or nongovernmental organisation if such firm or organisation is formed or established in India. The authority will also take into
consideration (a) the extant and nature of the use of
genetic material of the claimant in the development of
the variety relating to which the benefit sharing has
been claimed (the applicant while seeking registration
will have to disclose information regarding the use of
genetic material conserved by any tribal or rural
families in the breeding or development of such
variety), and (b) the commercial utility and demand
2
Extant variety refers to a variety already available in India,
about which there is common knowledge or any other variety which
is in public domain. A farmer variety means a variety which has been
traditionally cultivated and evolved by the farmers in their fields, or
is a wild relative or land race of a variety about which the farmers
possess the common knowledge (Government of India, 2001).

193

in the market of the variety relating to which the

benefit sharing has been claimed.
Gupta (1999) observes that, in comparison with the
plant protection in more than 30 countries, the protection offered to the extant and farmer varieties to protect
the land races by the Indian Act is a bold attempt and
has not been tried by any other country. However, some
modifications in the following lines perhaps will be
more useful for the farmers and the breeders. While it is
appreciable that the Indian Act provides for the registration of extant and farmers varieties, the condition
that such varieties will have to meet the criteria of
distinctiveness, uniformity and stability (DUS) may not
be realized, at least in the case of local land races and
wild relatives of economic plants. Although it appears
relatively easy and inexpensive to obtain plant variety
right than a patent, still the local communities cannot
exercise such rights. The uniformity and stability
requirements imply that only commercial breeders of
genetically uniform varieties can benefit from the
system (Dutfield, 2000). He points out that local
communities whose land races (or traditional cultivars)
may be rich in intravarietal genetic diversity (due in
part to the preference of communities for versatility and
adaptability) are unable to acquire protection because
of this genetic diversity (p. 50). Hence, in view of this,
the DUS requirement may be modified in the case of
extant and farmers varieties. A related issue is that in
order to provide effective protection to the local land
races, cooperation of local communities having knowledge about such varieties and village organisations is
very essential. This would be useful in (a) creating and
updating a national database of such varieties and (b)
benefit sharing whenever such varieties are exploited
for further development. Furthermore, the period of
protection provided by the Indian Act is shorter than the
period of protection offered by other types of plant
protection. Taking into account the role of plant biotechnology in agriculture and pharmaceutical sector, it
is essential to protect the extant and farmers varieties
for a longer period, so that the local communities can
also benefit from research or developments that is
based on local land races. The Indian Act provides
for the farmers rights to save, use, sow, resow, exchange share or sell his farm produce including a
protected seed variety, although a farmer cannot sell
the protected seeds as a branded seed. Here, it may be
essential to fix a ceiling of applicability, say for

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N. Lalitha / Ecological Economics 49 (2004) 187198

Table 2
Commonalities and differences in TRIPS, UPOV 1991 and the Indian Plant Varieties and Farmers Rights Bill 2001
(1) Particulars

(2) TRIPS Agreement

(3) UPOV 1991

(4) IPVFRB (2001)

Granting
criteria
Industrial
applicability/
utility
Distinctiveness

Novelty, inventive type and

industrial applicability
Not defined

New, distinct, uniform and stable

Novelty, distinctiveness, uniformity

and stability
Not a requirement

The variety must be clearly

distinguishable in its essential
characteristics from other
varieties, which are a matter
of common knowledge (e.g.,
protected by a plant variety
right) at the time of application
(a) Right to produce, reproduce,
Extent of
Where the subject matter of the
protection
patent is a product the right allows sale or stock any plant variety,
the holder to prevent third parties, (b) Right to extend to harvested
material and other products
not having the consent of the
obtained from material of the
holder using, offering for sale,
variety provided
selling or importing the product.
(a) Patent holder can deny usage
of the process he has developed
or even the sale of product of
that process
Farmers privilege Not specificbut possibly
Optional Contracting parties, may
permitted via Article 30
within reasonable limits and
subject to the safeguarding
of the legitimate interests of the
breeder, restrict the breeders
right in relation to any variety in
order to permit farmers to use for
propagating purposes
Breeders/research Not specificbut possibly
Yesnoninfringing include:
exemption
permitted via Article 30
(a) acts done privately and for
noncommercial purposes, (b) acts
done for experimental
purpose and for breeding

Compulsory
licenses

Not defined even as a requirement

for the sui generis system of
protection mandated for plant
varieties under Article 27 (3) (b)

Not a requirement

Yes but only where: (a) The

applicant has requested for and
been refused a license from the
patent holder. (b) The use for
which the applicant wishes to
use the protected invention is
nonexclusive. (c) The use is
predominantly within the
domestic market. (d) The license
holder pays an adequate
remuneration where the license
is needed in order to exploit
a second patented invention
which is dependent then a
license will be granted only
where: (1) the invention

The variety should be clearly distinguishable

by at least one essential characteristic from
any other variety whose existence is a matter
of common knowledge in any country at the
time of filing of the application

Registration under this Act shall confer an

exclusive right on the breeder or his
successor, his agent or licensee, to produce,
sell, market, distribute, import or export
the variety

A farmer shall be deemed to be entitled

to save, use, sow, resow, exchange, share
or sell his farm produce including seed
of a variety protected under this Act in the
same manner as he was entitled before the
coming into force of this Act; (b) A farmer
will not be entitled to sell branded seed of
a variety protected under this Act
Yes. Any person, for conducting experiment
or research, can use any variety registered
under this Act; however, if an initial source of
a registered variety is repeatedly used for the
purpose of creating other varieties for
commercial production, then authorization of
the breeder of the registered variety is required.
Not mentioned as such. Article 17 Yes. At any time, after the expiry of three
years for the date of issue of a certificate of
states that (1) Except where
registration of a variety, any person interested
expressly provided in this
convention, noncontracting party may make an application to the Authority
alleging that the reasonable requirements of
may restrict the free exercise
the public for seeds or other propagating
of a breeders right for reasons
material of the variety have not been satisfied
other than of public interest,
(2) When any such restriction has or that the seed or other propagating
material of the variety is not available to
the effect of authorizing a third
the public at a reasonable price and pray for
party to perform any act for
which the breeders authorization the grant of a compulsory license to
undertake production, distribution and sale
is required, the contracting party
of the seed or other propagating material of
concerned shall take
that variety
all measures necessary to ensure
that the breeder
receives equitable remuneration

N. Lalitha / Ecological Economics 49 (2004) 187198

195

Table 2 (continued)
(1) Particulars

(2) TRIPS Agreement

Compulsory
licenses

claimed in the second patent

involves an important technical
advance of considerable economic
significance in relation to the
invention claimed in the first
patent; (2) the owner of the first
patent is entitled to a cross-license
on reasonable terms to use the
invention claimed in the second
patent; and (3) the use in respect
of the first patent is nonassignable
except with the assignment of
the second patent. Each case is
assessed on its individual merits
and is subject to termination when
the circumstances change and
any decision is subject to
judicial review
20 years from the date of filing
30 years for trees and vines,
25 years for all other varieties
(Article 19)

Duration of
protection

(3) UPOV 1991

(4) IPVFRB (2001)

Registration is valid for nine years in

the case of trees and vines and six years
in the case of other crops and may
be reviewed and renewed for the
remaining period on payment of fees as
fixed by the rules. The total period
of validity shall not exceed: (a) 18 years
from the date of registration of the variety
in the case of trees and vines, (b) 15 years
from the date of the notification in the
case of extant varieties; and (c) in other
cases, 15 years from the date of
registration of the variety

Source: Columns (1) (3) from Chaturvedi (2002). Materials in column (4) compiled by the author from The Protection of Plant Varieties and
Farmers Rights Bill (2001).

instance such rights may be extended to small and

marginal farmers only. Providing such benefit indiscriminately to all farmers may restrict the breeders
returns earned on R&D investments and may lead to (a)
fixing a high price for the protected seeds to deny
access to marginal and small farmers or (b) technological modification of a gene in such a manner to reduce
the yield in successive propagation. The Act provides
for compensation from the breeder in case of failure of
the seeds. In order to claim such compensation, it is
essential that the appropriate conditions are stated
clearly so that the gullible farmers are not exploited
by unscrupulous breeders.
Similar to pharmaceuticals, in the seed sector also,
the option of compulsory license (CL) may be exercised under certain conditions like unavailability of
seeds at the required quantity and at reasonable price,

etc. Already, countries like the United States, Japan,

Australia and Brazil have provided for compulsory
licensing by which a protected variety could be allowed
commercial cultivation on payment of a fee. However,
the Indian Act gives the benefit of doubt to the breeder
in the circumstances leading to compliance with compulsory license. The Authority will also determine the
duration of the compulsory licenses granted, which
may vary from case to case, keeping in view the
gestation periods and other relevant factors but in any
case shall not exceed the total remaining period of the
protection of that variety.
In the case of CL, the Act states that the licensee
cannot import the variety and such import would
constitute an infringement of the rights of the breeder.
Implicitly, the licensee will have to obtain the technology to produce it locally and can neither import the

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N. Lalitha / Ecological Economics 49 (2004) 187198

said seeds nor take advantage of differential pricing if

any are available for the product elsewhere. The point
is that the licensee should be in a position to manufacture the seed domestically once the CL is obtained.
In other words, without the required know-how and
technology, obtaining CL alone is not going to be
helpful. A few more issues that arise in the context of
extending protection to plant varieties and need more
focused attention are mentioned below.
(1) Plant protection could boost research in the area
of plant biotechnology by both public and private
bodies. In contrast to the developed countries, in India,
research to produce new varieties is primarily conducted by the Indian Council of Agricultural Research
(ICAR), State Agricultural Universities (SAU) and
International Agricultural Research Centres such as
ICRISAT. ICAR and SAU spent about Rs1960 million
on crop research in 1994 and the private sector spent
about Rs155 million on plant breeding research (Pray
and Rakesh, 1998). This investment trend could soon
change in favour of the private sector due to the
intellectual property protection provided to the plants
and plant varieties through the Indian Plant Act and the
emphasis laid down by the Seed Policy 2002. While the
protection to new and essentially derived varieties and
the researchers exemption will promote research especially in the private sector, the focus of research could
continue to be in vegetables and fruits and not in the
area of self-pollinating crops. As shown in Table 1,
much of the research is either on vegetables or on
commercial crops where commercial returns would be
very high. Hence, research on food crops would continue to be the concern of the public sector.
(2) So far, parental lines developed by the public
sector were not protected by any system. In the present
regime, such protection would mean enhanced revenue
through licensing fee to public research institutions,
and thereby increase the funds for R&D. However, it
calls for evolving effective licensing procedures for the
research to be more beneficial to the farmers. Licensing
procedures also become important because lack of
clarity on this topic would lead to IPR infringement.
So far, the private sector has been using the parental
lines developed in the public sector, which in turn
might have used parental lines from other countries.
For instance, use of the patented vitamin A rice
involves clarifying user licenses for over 70 patents,
which makes conduct of agricultural research difficult

because of the negotiations that will have to precede the

use of such research tool. Specifying the licensing
procedures would also be essential in the case of extant
and farmer varieties, but prior to this stage, however,
registration of such varieties need to be strengthened.
(3) The formula of benefit sharing with the local
community is not fixed or specified in the case of use
of genetic resources, which can be the potential source
of conflict. Benefit sharing with the local communities
requires co-opting the local communities and other
village level organisation to identify and list the local
land races. Furthermore, in order to assess the varieties submitted for registration, the Authority should
also be well equipped with data and prior art information to assess the DUS nature of the variety. These
are essential prerequisites to prevent infringement and
also to decide the mechanism of benefit sharing.
(4) With the emergence of biotech-based transgenic
crops, a different trend in research could emerge with
the purpose of earning quick economic returns with
little concern for their impact on other resources and
environment. This requires an increased role of the
government in closely monitoring the research outcomes in the private sector before they are commercialized, to assure that there are no negative impacts of
such technology. For this purpose, the state and district
level coordination committees will have to be set up
and resources should also be spent on capacity building
in these committees.
(5) The transgenic cottonseeds are priced at around
Rs. 1600 for a 450-g packet, which is higher than the
price of hybrid seeds. The price is fixed exorbitantly
high basically to recoup the amount that (a) has been
invested in R&D to develop the seed that would suit the
Indian soil and climate, and (b) is paid towards license
fee. It is reported that MAHYCO had already spent
around US $8 million in 2001 (Jayaraman, 2001) by
way of developing the seed and in-field trials. However, such higher prices will exclude the small farmers,
who in fact are in dire need of a solution that will pull
them out of debt trap, from using the new technology.
(6) The Indian plant Act enables the farmer to save,
use, sow, resow, exchange, share or sell the seeds of
protected variety (although not under the brand name).
Assuming that the Bt cotton seeds yield do not reduce
at least in the first three successive cultivation, farmers
will be more interested in saving and exchanging the
seeds for further use, which will affect the sales of the

N. Lalitha / Ecological Economics 49 (2004) 187198

company. If size class restrictions are brought in so that

the farmers privilege benefits mainly the small farmers, the tendency to charge higher prices and the
exclusion of small and marginal farmers from using
the new technology because of the high price can be
avoided.
(7) If the Bt cotton proves to be good, then there
could be a large-scale demand for these seeds in the
coming seasons. Since MAHYCO is the only licensed
producer, obviously, there will be a gap between the
demand and supply. This, combined with the fact that
the seeds are priced very high, can itself be a case for
obtaining compulsory license. It is reported that even if
MAHYCOs production capacity is completely utilised
to produce Bt seeds, then about 1,500,000 ha will be
used for Bt cultivation. Assuming at least 50% of the
present 9 million ha under cotton cultivation adopts
transgenic seeds, still a huge gap is left that can be
bridged only if capacities are increased. Already, eight
Indian seed companies have formed a consortium
called Swadeshi Biotechnics to jointly explore possibilities of obtaining and commercializing Bt technology (Dravid and Sai, 2002). This would also make it
possible to obtain compulsory license on the grounds
that Bt seeds are not available in adequate quantity. The
Indian Plant Act rightly has said that such licensees
cannot resort to importing the seeds and should produce the seeds locally, which requires that the licensee
should have the required know-how to produce the
seeds. Since several companies have already shown
interest in obtaining license, the present monopoly-like
situation will eventually give way to an oligopoly
structure in the transgenic seed market. Furthermore,
it will improve the availability of such technology
locally. However, the government has asked each of
these companies to conduct the field trials again, which
will delay the supply. Field trials should be sought for
only if a different gene is used. For a gene that has
already been tested, field trials can be avoided, as in the
case of the United States.
(8) About 28% of the cottonseed comes from the
unorganised seed sellers (Sidhu, 1999). This points out
that there will be a large scope for infringement of
intellectual property rights of Bt cotton users. Filing of
infringement cases against small farmers is also possible because, in India, where small holdings are popular,
Bt cotton could spread to nearby lands due to pollination, which can be called as potential act of infringe-

197

ment.3 Farmers need to be educated about the possible

acts of infringements and their impact. Besides infringement, there is also the chance for adulterated
and hybrid seeds to enter the market as transgenic
variety. Companies, in order to prevent such infringement and to protect their interests, may resort to
technological means to protect IPR. Implicitly, this
would lead farmers to turn to the market for their
subsequent seed requirements if the hybrids yield and
vigour are to be maintained, thus increasing their
dependency on market and liquidity requirements.
The other area where intellectual property rights
become very essential is in protecting traditional
resources from biopiracy resulting from bio-prospecting. Increasingly, plants and plant-based resources are
used in pharmaceutical preparations. Whereas over
90% of genetic resources are estimated to be found in
the tropical regions of Africa, Asia and South America,
which are economically resource-poor countries, the
countries which rely on such resources for industrial
production and research, however, are in the North and
are economically rich (Biber, 2000). With the increase
in outsourcing of biotechnology production and research by western countries, developing countries are
demanding that the country of origin of genetic resources should also benefit by the larger research and
subsequent commercialization of the research. Although Article 15 of the Convention of Biodiversity
says that the benefits of the research should be shared
in a fair and equitable manner with the country
providing those resources, in the absence of effective
international arbitration and without specific regulations at the national level to fix the level of fairness and
equitability, currently the benefits are shared by mutually agreed contract arrangements.
Although the Indian Act incorporates the concept of
benefit sharing so as to benefit the local communities,
the methodology to arrive at a formula that will be
acceptable for both the local community and the
researcher is yet to be laid down. Nevertheless because
benefit sharing can take financial, conservation, social
and scientific forms, they must therefore be resolved
during the prior-informed-consent process before any
3

Monsanto has filed a case against a large farmer in Canada for

allegedly infringing its Canola roundup crop, and the case is going
on for several years (Fox, 2001). The farmer on his part, however,
claims innocence and attributes the roundup crop in his field to
pollination from the nearby fields.

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N. Lalitha / Ecological Economics 49 (2004) 187198

bio-prospecting permits are issued (Moran, 2000). As

case studies demonstrate, opportunities for financial
compensation include upfront payments and mediumterm benefit sharing as research progresses. Many
companies offer stakes in equity, profit sharing and
joint venture opportunities. In the case of drugs produced from plant resources, royalties occur only if and
when a drug is marketed.
The Indian Plant Act 2001 is elaborate and takes
into account the interests of both the breeder and the
farmer. Now the governments task is to implement
the Act by improving the capacity of concerned
institutions set up for such a purpose.
4. Conclusion
Innovations in biotechnology have several useful
applications in agriculture and are useful for developing countries like India. However, current resources for
such innovations have nevertheless resulted in their
protection by way of appropriate intellectual property
rights. While patents prevent further research, a sui
generis system adopted by India benefits both the
farmers and the breeders, and diffusion is possible.
Although plant protection rights will check unlawful
bio-prospecting, to protect the interests of farmers and
breeders, large databases that document the existing
varieties need to be undertaken. This paper highlighted
some of the issues that emerge from the context of
extending protection to extant and essentially derived
varieties, and the implications for agricultural research
in the context of adopting transgenic technology. While
protection may encourage the private sector to go for
research in commercial crops, it may also divert the
resources of the public sector from investing in research
on food crops to regulating and monitoring the research
in private sector. Nevertheless, the task that confronts
developing countries like India is in focusing on
developing the physical and scientific infrastructure
to provide plant protection effectively.
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