Background:

This is a landmark case where after a long debate the Delhi High Court through its Division Bench
struck down the decision of Single Bench of same High Court where the legality of Patent No. 214436
consisting of Bt. Technology claimed by the plaintiff (Nuziveedus in the case before division bench)
was challenged and the appellate court held that since the Nuziveedu’s claim was not filed
appropriately, therefore, their patent was disallowed, however, they were given the opportunity to file
it appropriately.

Facts of the case:

 Monsanto Technology LLC was a limited liability company incorporated under the laws of
Delaware and their affiliates and subsidiaries incorporated in several countries, one of
which was incorporated under the laws of Indian Companies Act 1956.

 The company had registered one of their claims under Patent No. 214436 which they had
further licensed to Indian companies including the Nuziveedu Seeds which was a company
incorporated under Indian Companies Act, 1956 and had been running their business in
India.

 The license granted to companies in India including the appellant was on a condition of
paying lifetime fees of 50 lakh along with a recurring trait value as compensation for such
license grant.

 The Patent No. 214436 which was in dispute in this case was titled “METHODS FOR
TRANSFORMING PLANTS TO EXPRESS BACILLUS THURINGIENSIS
DELTAENDOTOXINS”. This patent was basically a biotechnological invention that
contained infusion of Bt. gene into the cotton genome. This Bt. bacterium was used to
produce cotton seeds that are resistant to boll-worm attack.

 State Government thereby passed some new price control orders for trait fees collected by the
companies. The appellants along with other licensee companies approached the Nuziveedu
to adjust the trait fee according to the new orders passed by the Government.

 The Nuziveedu thereby denied any such adjustment of the royalty fees. The appellants and
other licensees stopped making payment on October, 2015. In November 2015 the
appellants sent them a notice to terminate their licenses.

 The Monsanto Technology LLC thereby approached Competition Commission of India

(CCI) against the Nuziveedus accusing them for anti-competitive practices and for abusing
their dominant position in the market.
  The Nuziveedu thereby terminated the license and preceded an arbitration proceeding against
the appellant and other licensees to recover the amount due as trait fees to be paid which
amounted to Rs. 400 crore.

 Along with the arbitration, the Nuziveedu also initiated proceedings before the Single Bench of
Delhi High Court accusing the appellants for patent infringement and claiming injunction
on them for using their patent.

 In response to the infringement claim, the appellants filed a counter-claim to revoke

Nuziveedu’s patent. They argued that the patent of Nuziveedu shall be revoked in
accordance with the provisions of Section 8, Section 10(4) and stated that it should be held
invalid as it falls within the scope of Section 3(j) and 3(h) of Patents Act.

 The Single Judge Bench revived the license that the appellants had terminated rejecting the
claim of Monsanto technology LLC to revoke the patent of the Nuziveedu. Further it ordered
that the appellants can pay the trait fees in accordance with the norms set by State
Government.

 Also the Monsanto technology LLC were allowed to use the patent till the pendency of the
suit.

 Both parties thereafter filed counter appeals before the Division Bench of Delhi High Court.
The Monsanto Technology LLC filed the appeal against the order validating the patent of
Nuziveedu whereas the Nuziveedus were aggrieved of the order of reviving the licenses of
the appellants.

Issues:

 Whether the patent no. 214436 was a valid patent looking after the fact that the Nuziveedus
had failed to disclose the details as well as source of their invention as per section 10(4) of
Patent Act, 1970 and whether such patent comes within the ambit of section 3(j) of the
Patents Act, 1970.
 Whether the licenses of the appellants shall be revived and thereby they shall be made to pay
the traits fee as claimed by the Nuziveedus.
 Whether the appellants can use the patent of the Nuziveedus.

RULES:

3(j) of Patents Act, 1970 (Act)

10(4) of Patent Act, 1970

Protection of Plant Varieties and Farmers' Rights Act, 2001

Section 42 of Specific Relief Act, 1963 (Act)

ANALYSIS:

In the initial proceedings, The Single Judge of the Delhi High Court reinstated the sub-licence that was
terminated by Monsanto. It allowed Nuziveedu Seeds and other Indian companies to continue using the patented
technology till the suit is disposed, wherein, the trait fee must be paid in accordance with the government set
rates. The Single Judge also rejected the arguments of the defendant about the validity of the patent. Later when
the appeal was made to the Division Bench of Delhi High Court by both the parties, the Court countered the
order of Single Judge. In such appeal, Monsanto challenged the decision of the Single Judge to re-instate the
licence terminated by them. The defendants challenged the rejection of their arguments about the validity of
plaintiff’s patent.In accordance to the appeal,The Division Bench concluded that the subject patent falls under
the provisions of Section 3(j) of the Patent Act and held that the claims of the patent are unpatentable. The
Division Bench upheld the order of Single Judge regarding the trait fee payable by the Indian companies to
Monsanto. The court gave a time period of three months to Monsanto to seek protection for its invention under
“The Protection of Plant Variety and Farmers Right Act, 2001.

Whereas While dealing with Issue 1, the Supreme Court agreed with Monsanto’s arguments that there is no
reason for Monsanto to have consented to a summary adjudication of an existing patent, and to have risked
losing the same, without being granted an opportunity to lead evidence to oppose the counter-claim. The
Supreme Court also held that the Division Bench should not have assumed the powers of the Single Judge, and
should have confined its adjudication to the question on whether the grant of an injunction was justified.
Whereas in respect to Issue 2, the Supreme Court observed that the Division Bench had made an error by going
into complex issues of facts without. In fact, the defendants had contended in their appeal that the issues were
complicated and required expert evidence to be considered in a full-fledged trial despite of this the court did not
take an expert advice. Moreover, The Supreme Court held that the issue regarding the exclusion of the patent
under Section 3(j) of the Patents Act was a heavily mixed question of law and facts, which required formal
proof and expert evidence. Given that this issue was pending before the Single Judge, the Division Bench should
not have proceeded to decide the validity of the patent. In view of the above, the Supreme Court upheld the
nature of the injunctive relief granted by the Single Judge, and held that the relief granted merited no
interference during the pendency of the suit. The Supreme Court, while restoring the patent, remanded the suit
to the Single Judge for disposal, in accordance with law

The whole case revolved around the very major issue that is whether the Patent No. 214436 has been
erroneously granted Patent under the Indian Patent Laws. The Court Observed an important aspect of
Intellectual Property Laws, that Patent Act are not complimentary but are exclusive of Plant Variety Act and
thus, Monsanto Patent protection was incorrect as it should have been protected under the Plants Variety Act,
going by a literal interpretation of provisions of both the statutes. However, such kind of practice and the current
position of law as laid down by Justices, may create a future barrier for entrance of new technologies in the
Agricultural Industries as the major incentive for the technology developers have been sacked and also now that
the technology developers have lost the right to fix the license price to the Central Government. According to
such analysis an advanced inventions along with growing technology and need of such development, the statute
must be flexible enough to imbibe the new changes and pave way for such technological developers subject to
public policy and can be regulated by the Central Government with respect to the kind of invention taking place
as well as ‘benefit sharing aspect and license fee’, hence taking care of farmer’s right as well. Therefore, the
subject Patent may be validated and the outcome product after being processed by the patented invention can be
protected under Plant Variety Act. Thereby, avoiding the overlap of IP laws and rightfully protecting each
party’s right.

Conclusion