Patents Vs. Farmers Rights TRIPS Obligations

Efforts of Multinational Corporations (MNC’s) to expand their Intellectual Property Rights (IPR’s), beyond the scope of the existing laws, received a jolt. A Division Bench of the Delhi High Court in Nuziveedu Seeds Ltd. & Ors. Vs Monsanto Technologies LLC & Ors.[1] (The Monsanto Judgment) rejected the patents claim of Monsanto Technologies (Monsanto) in respect of genetically modified Cotton Seeds. The court held that exercising option under Article 27(3) (b) of the ‘Trade-Related Aspects of Intellectual Property Rights’ (TRIPS) India chose to promulgate a separate law viz; Protection of Plant Varieties and Farmers’ Right Act 2001 (PV Act) to protect IPR’s in respect of New Plant Varieties. The court held that seeds/plant varieties are specifically excluded from patentability under Section 3 (j) of the Patents Act and hence Monsanto is not entitled for patent in respect of its purported invention, the genetically modified cotton variety. The Court, however, permitted Monsanto to avail its IPR by filing an application for registration under the PV Act.

Scores of articles/snippets/clips/blogs were written criticising the Monsanto judgment. There seems to be a great rush to say something in support of the claim for the patent (mostly from firms dealing with the IPR’s). The paramount objection is that the judgment is not in terms of the obligations under TRIPS and the interpretation of Section 3 (j) of the Patents Act given by the court is erroneous. None of these critiques, however, have properly analysed the judgment. Most of the articles are brief one/ two-page expositions, whereas, the Monsanto judgment has considered every aspect in depth, starting from India’s obligations under TRIPS to the challenge before the courts. The court dealt with the issue of patentability of seeds/plant varieties apart from various other issues and contentions raised by the parties and gave detailed reasoning in support of its decision.[2]

The judgment is a great solace for those concerned with the rights of farmers and those who are conscious of the modest gains made during TRIPS negotiations, ensuring a little bit of flexibility in protecting the interests of the developing nations. The interpretation given by the single judge upholding the patent right of Monsanto was essentially in terms of TRIPS covenants and not on the basis of conscious departure made by the Parliament in promulgating the PV Act and amendments made to the Patents Act. On the other hand, the judgment of the Division Bench is entirely in terms of the laws, enacted in discharge of the obligations under TRIPS.

The judgment has come at a time when the fight for patents in respect of life and life forms, particularly, seeds[3], has considerably warmed up on the global stage. Patents Offices of developed countries started granting patents even in respect of hybrid varieties, produced by conventional methods.[4] The spectre of corporate giants striking at the poor farmers, who are increasingly forced to commit suicides, taking away the minimal food security, is looming large, proving the critiques that WTO/TRIPS are nothing, but lethal weapons in the armour of the developed nations for expansion of neo-colonialism. Considering the direct impact the judgment has on the rights of farmers and food security and the criticism it received from the supporters of wider patent protection, it is necessary to consider the issue and the judgment in-depth to find out whether, there is any justification for the criticism.

The background:

Efforts of the developed countries led by the United States, having failed in establishing International Trade Organisation (ITO), they came up with General Agreement on Tariffs and Trade (GATT). More and more countries came together under the auspices of GATT seeking international trade and reduction of trade barriers and tariffs between the member countries. Protracted negotiations from 1986 to 1994 under Uruguay Round of Multilateral Trade Negotiations[5] resulted in the creation of the World Trade Organisation (WTO) with the initial membership of 123 countries. The Uruguay round of negotiations also resulted in the agreement on the ‘Trade-Related Aspects of Intellectual Property Rights’ (TRIPS). While the developed nations such as Switzerland, Japan and EC led by United States, pressed for stricter regimes and wider protection of IPR’s, the developing nations including India and Brazil were of the view that intellectual property is not the concern of GATT/WTO and World Intellectual Property Organisation (WIPO) shall continue to deal with the issues of Intellectual Property. Every country had to carefully weigh the pros and cons of becoming a member of WTO, as the membership of WTO is a sort of package deal, which while providing access to trade with large number of member countries, mandated the acceptance of TRIPS, which is considered nothing less than ‘economic Hara-Kiri and a Hobson’s choice.’  The member countries of WTO were required to amend their laws in consonance with TRIPS covenants, crafted by the Intellectual Property Committee (IPC)[6]. The critiques of TRIPS often referred to Mr. James Enyart, Director International Affairs Monsanto and founding member of IPC, who has admitted that IPC crafted TRIPS Agreement.  Mr. James Enyart was reported to have said “Once created, the first task of the IPC was to repeat the missionary work we did in the US in the early days, this time with the industrial associations of Europe and Japan to convince them that a code was possible ….Besides selling our concepts at home, we went to Geneva where [we] presented [our] document to the staff of the GATT Secretariat. We also took the opportunity to present it to the Geneva-based representatives of a large number of countries… What I have described to you is absolutely unprecedented in GATT. The industry has identified a major problem for international trade. It crafted a solution, reduced it to a concrete proposal and sold it to our own and other governments… The industries and traders of world commerce have played simultaneously the role of patients, the diagnosticians and the prescribing physicians.” [7]

In short, the IPC and the developed nations bulldozed[8] TRIPS for their own benefit, trampling the rights and concerns of the underdeveloped and developing nations. Inspite of protracted negotiations, developing countries secured little. To camouflage the simple fact, that TRIPS is nothing but a document crafted by IPC/US corporate giants and the developed nations and the developing countries and their interests were sacrificed on the alter of the TRIPS with impunity, a magic phrase ‘flexibility in TRIPS covenants’, was coined, creating an impression, as if TRIPS was the product of effective negotiations[9]. The member countries, while drafting their laws to make them TRIPS compliant, are supposed to take advantage of the purported flexibility in TRIPS covenants.

Some countries, particularly India has exactly done the same, taking as much advantage as they reasonably could, from the flexibility offered by TRIPS. In compliance of TRIPS obligations, India was required to make necessary amendments in the laws relating to intellectual property by the year 2005.[10]

 Brief Analysis of the relevant covenants of TRIPS and the Patents Act 1970:

India has enacted the PV Act and amended the Patents Act 1970, among others, in compliance of TRIPS obligations. Section 3(j) was inserted in the Patents Act 1970,[11] making the Act TRIPS compliant.[12] In the present article, we are concerned with Article 27, particularly, 27(3) (b) of the TRIPS and Section 3(j) of the Patents Act, which are as under:

Article 27

Patentable Subject Matter:

 1.  Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application* Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

 2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

3.Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

(b). Members may also exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological 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. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

 *For the purposes of this Article, the terms "inventive step" and "capable of industrial application" may be deemed by a Member to be synonymous with the terms "non-obvious" and "useful" respectively.

9.Section 3 (j) of the Patents Act is as under:

   3.What are not inventions:

…..

(h) a method of agriculture or horticulture

……

(j): “plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals”

A comparison of Article 27 (3) (b) of TRIPS and Section 3 (j) of the Patents Act shows that in Section 3 (j) of the Patents Act, the phrases ‘in whole or part thereof’, ‘but including seeds, varieties and species,’ and ‘propagation’; are added and the phrase ‘other than non-biological and microbiological processes’ occurring in Article 27 of TRIPS were omitted. Thus, exercising the flexibility afforded by TRIPS, small but extremely significant changes were made in promulgating Section 3 (j) of the Patents Act. The most significant change is the inclusion of seeds, varieties and species in the list of what are not inventions.  Thus while seeds are not excluded from patentability under Article 27(3) (b) of the TRIPS, Section 3 (j) of the Patents Act excluded seeds from patent protection. Seeds, whether genetically modified or not, are not inventions and are not patentable - in terms of Section 3(j) of the Patents Act.

Exercising the option under Article 27 (3) (b) under which “Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof,” India enacted PV Act. Thus, a right in respect of a new plant variety for production and propagation of plants, whether genetically modified or not, can only be exercised under and in terms of the PV Act. Simultaneously, by making it clear that animals, plants or part thereof, including seeds, varieties and species are not inventions, any claims in respect of the same are kept out side the purview of the Patents Act. Any one making a claim in respect of a plant variety either directly or indirectly can only make a claim under the PV Act. A claim for patents in respect of seeds, either directly or indirectly,  genetically modified or not, is not maintainable in view of declaration under Section 3 (j) of the patents Act  that seeds (as well as varieties and species) are not inventions.

Monsanto’s claim

Monsanto’s claim in respect of its genetically modified Cotton Seeds squarely falls within the scope of the PV Act. However, the rights under the Patents Act are more beneficial and advantageous than the rights under the PV Act. Monsanto therefore took a conscious decision to make claims under the Patent Act rather than PV Act and even contended that PV Act is not applicable in respect of its invention.

Monsanto filed a suit before the Delhi High Court, among others, claiming patent right in respect of its genetically modified Cotton Seeds marketed under trade name BOLLGARD. According to Monsanto, it has a registered patent No. I.A. 214436 in respect of a nucleic acid sequence, (purportedly) an invention relating to a method for producing a transgenic plant, resulting in developing of insect resistant plant. In short, the claim of Monsanto is that it had genetically modified the cottonseed and has patent right in respect of the same. Monsanto contended that Nuziveedu Seeds, among others, violated its rights under the Patent Act. Monsanto sought a decree of permanent Injunction restraining Nuziveedu Seeds from selling its genetically modified Cotton Seeds. Nuziveedu seeds, on the other hand, contended that Monsanto was wrongly granted patent.

A Ld. Single Judge rejected the contentions of Nuziveedu Seeds that the technology of the Monsanto has been wrongly patented in India. It was held that Section 3 (j) setting out that plants, animals, seeds, varieties and species …… are not inventions, needs to be interpreted keeping in view the legislative intent and objects and reasons behind the amendments to Section 2 (1) (j) and omission of Section 5 of the Patents Act. [13]

The Monsanto Judgment:

Both Nuziveedu seeds, as well as Monsanto, filed appeals challenging the decision of the Single Judge. The Division Bench inter-alia held that:

The 2005 Amendment repealed Section 5 altogether. In isolation, this would have meant that the extended definition of "chemical process"- covering "biochemical, biotechnical and microbiological processes” could be patented. However, the insertion of Section 3(j) which excluded "plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals" and the simultaneous enactment of the PV Act meant that facially, the Parliament intended not to afford intellectual property protection in the form of patents, to processes and products that would otherwise be called inventions and be entitled to patents.

It is evident that Parliamentary intent was to exclude from patenting plants, seeds or part thereof excluding micro-organisms "but including...essential biological processes". This meant that process or products, that otherwise meet the test of patentability (i.e. novelty, inventive step and industrial application), are nevertheless as a matter of public policy, ineligible for patent protection. The mechanism adopted by Parliament was to spell out what was not patentable i.e., plants, seeds, plant varieties, - whole or part and then exclude micro-organisms, but clarify that the exclusion would not apply to "seeds, varieties and species and essentially biological processes for production or propagation of plants and animals". Therefore, the principal provision (Section 3) provides for non-patentability of matters spelt out - i.e.

(i) plants, animals in whole or part thereof;

(ii)excluding micro-organisms

iii. but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals

A plain textual interpretation of Section 3(j) of the Patents Acttherefore, is that plants, animals "whole or parts thereof" are excluded from patentability, as are "seeds, varieties and species and essentially biological processes for production or propagation of plants and animals". However, microorganisms are not excluded; whole or parts thereof can be patented, provided other conditions of the Patent Act are fulfilled. Significantly, the expression "variety" (undefined under the Patents Act) is defined under the PV Act by Section 2 (za) to exclude microorganisms ("variety means a plant grouping except a microorganism..."). The exclusion of microorganisms from the PV Act meant that they are not capable of registration as any "variety" under that Act; their exclusion from Section 3 (j) means that the Patents Act enables patent protection to them.

The future propagation of the transgenic plants (after introgression and hybridization) and the subsequent transfer of the Bt. Trait in such plants and consequently, the transgenic seeds, will be a process of nature, and no step of human intervention can impede such transfer of the sequence. Therefore, it would be contrary to law and Parliamentary intent to enable Monsanto to have patent rights over the nucleic sequence once it is been duly introgressed and hybridized into the transgenic plants. Unlike other products, the process of integration and further hybridization sets into motion a chain of events, which is part of nature; the seeds and propagating material, including future generation of seeds would contain the DNA sequence with the particular strand or trait. In other words, the moment the DNA containing the nucleotide sequence (subject patent) is hybridized to produce the transgenic seeds/plants; the seeds/plants fall within the purview of the PV Act, and, above, the process of creation of such seeds/plants are also excluded from patentability as they squarely fall within the meaning of an "essentially biological process" that is exempted from patentability within the meaning of section 3(j), as well. For these reasons, it is held that the subject matter, the concerned nucleotide sequence over which Monsanto has patent rights and the process is unpatentable by reason of Section 3(j) of the Patents Act. Scheme under the PV Act- is Monsanto entitled to intellectual property protection under the enactment.

A transgenic variety can be a "new variety" and, therefore, registrable under Section 15(1) provided it satisfies the conditions of “novelty, distinctiveness, uniformity and stability”; a “breeder” under Section 14(1) includes the breeder of such transgenic variety. Therefore, there is no merit in Monsanto’s argument that its products cannot ipso facto be registered and secure protection under the PV Act.

For the above reasons, it is held that the learned single judge’s conclusion that the PV Act and the protective mechanism was an option, or alternative, which Monsanto could possibly have resorted to, in addition to patent protection, under the Patents Act, is incorrect. These two systems are not complimentary, but exclusive, in the case of all processes and products falling under Section 3(j) of the Patents Act. Nuziveedu’s contention with respect to patent exclusion, therefore, succeeds. The court at the same time realizes that the patent granted to Monsanto has stood all this while. Given these factors, it is held that Monsanto is at liberty to claim registration under the PV Act, with the benefit of its filing the patent application, as far as the date of filing and for purposes of Section 15 of the PV Act. In case Monsanto wishes to avail its right, the application or applications (for registration) under the PV Act shall be preferred within three months and decided in accordance with its provisions; such claims shall be decided in accordance with law. Subject to these liberties, Nuziveedu’s counter claim succeeds and is allowed.

In essence, the court held that the intent of the Parliament was to exclude plants, seeds or part thereof excluding micro-organisms from patents protection. The court held that the Parliament intended not to afford patents in respect of these forms of intellectual property. The court stressed that this fact is evident from insertion of Section 3(j) of the Patents Act and simultaneous enactment of PV Act.

According to Monsanto, the cause of action in its favour is on account of the defendants continuing to ‘market and sell’ Genetically Modified Hybrid Cotton Seeds inspite of termination of the sub-license agreements including alleged violation of their intellectual property rights vis-à-vis the registered patent (IA 214436). It is thus clear that Monsanto is claiming right in respect of its genetically modified cotton seed, whereas, a seeds are not patentable under the Patent Act. The court, therefore, held that it would be contrary to the law and Parliamentary intent to enable Monsanto to have patent rights over the nucleic sequence once it is been duly introgressed and hybridized into the transgenic plants. The finding of the court, that once DNA containing the nucleotide sequence is hybridized to produce the transgenic seeds/plants; the seeds/plants fall within the purview of the PV Act, is unimpeachable. The court also considered that TRIPS left it open to the member countries to provide for the protection of plant varieties either by patents or by effective suigeneris system or by a combination of both. The Parliament chose to enact PV Act for protection of IPR’s in respect of new plant varieties.  The court granted Monsanto, relief in terms of the law by holding transgenic variety can be a ‘new variety’ and, therefore, registrable under Section 15 (1) provided it satisfies the conditions of ‘novelty, distinctiveness, uniformity and stability.’

Conclusion:

 The Parliament in discharge of its obligations under TRIPS, exercising the flexibility permitted under TRIPS enacted the laws viz; the PV Act and the amendments to the Patents Act. The above analysis of TRIPS covenants, the laws made by the Parliament in discharge of TRIPS obligations and the Monsanto Judgment clearly shows that the judgment is entirely in terms of the laws enacted by the Parliament. The criticism of the judgment, that the judgment is not in terms of TRIPS obligation and Section 3 (j) of the Patents Act, is erroneous. The criticism did not take into consideration the conscious departure made by the Parliament from Article 27 (3) (b) of TRIPS, while enacting Section 3 (j) of the Patents Act. The criticism is thus based more on TRIPS rather than on the laws enacted by the Parliament and hence, unwarranted and fallacious.

C. Mohan Rao is an Advocate-on-Record Supreme Court of India.

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same]

[1] 2018 (74) PTC 12 (Del) (DB). The Judgment of the DB was delivered by Hon’ble Justice S.Ravindra Bhat.

[2] The present article is concerned only with the issue of patentability of seeds/plant varieties.

[3] The word Seeds in this article is used broadly to represent all forms of production and propagation of life including plant varieties, species etc.

[4] For example: Cucurbit yellow stunting disorder virus (CYSDV), a plant disease has been spreading through North America, Europe and North Africa. The Indian melon, which confers resistance to this virus, is registered in international seed banks as PI 313970. Monsanto was awarded a European patent on conventionally bred melons (EP 1 962 578), which prevents future breeding efforts and the development of new melon varieties.

[5] Uruguay Round was the 8^th round of negotiations.

[6] IPC was a coalition of thirteen US corporations formed with the objective of negotiating a comprehensive agreement on intellectual property in the GATT Uruguay round of multilateral trade negotiations. James Enyart represented Monsanto in the IPC.

[7] “A GATT Intellectual Property code” Les Nauvelles Vol XXV No.2 June 1990 p:54

[8] Some interesting accounts of how the TRIPS negotiations were bulldozed can be found in ‘The Ascent of Globalisation’ by Harry Blustein, 2005 Oxford University Press.

[9] With due apologies to those valiant representatives of the developing and the under developed nations, who have tirelessly participated in the Uruguay round of TRIPS negotiations and managed to extract few tit bits and the flexibility under most difficult conditions. It is certainly not my intention to undermine or under estimate their efforts.

[10] Initially, the amendments were to be carried out by 2000.

[11] Added by Act 38 of 2002, sec. 4 (w.e.f. 20.5.2003).

[12] The Patents Act, 1970 was amended five times between 1994 and 2003 to make it TRIPS compatible.

[13] A critique of the judgment of the Single Judge by the author under the title “Patentability of Life and Life Forms: Are Seeds Patentable” was published in the Practical Lawyer (2018) PL January 66.