Tag Archives: IP laws

Monsanto Technology LLC And Ors Vs. Nuziveedu Seeds Ltd. And Ors

Monsanto Technology LLC, one of the world’s leading seed company, was smacked by the decision upheld by the Division bench of Delhi High Court in an appeal that was preferred by them against the order of Delhi High Court single bench.

The dispute initially arose over license and royalty of Patented seed technology–BOLLGARD II, between Monsanto and Nuziveedu seeds Company in 2015 (which has earlier been discussed here),  which stretched to a major debate over the legality of Patent No. 214436 consisting of  Bt. Technology  that was granted to Monsanto.

The disputed Patent No. 214436 is titled as “METHODS FOR TRANSFORMING PLANTS TO EXPRESS BACILLUS THURINGIENSIS DELTAENDOTOXINS”  which was questioned on claims 25-27 that contains biotechnological invention containing the infusion of Bt gene into the cotton genome. This Bt. bacterium eradicates pests afflicting the cotton plant.

Nuziveedu’s Claim

Nuziveedu filed a counter claim under section 64, relying on various grounds such as  absence of novelty[1], absence of obviousness[2], complete specification not revealing any “invention”[3],deficiency in complete specifications[4] and claim[5], false suggestions or representations[6], non-compliance of the requirements of Section 8[7],non-disclosure of source or geographical origin[8]and the invention claimed in the complete specification being not useful[9]. Apart from the above grounds, Nuziveedu focused on Section 3 (j) of the Patent Act, 1970, which served as the main ground for the revocation of the mentioned Patent.

Arguments

  1. Interpretation of Section 3(j) of Patent Act,1970 vis-a-vis Patent No. 214436

Nuziveedu contended that Section 3(j)  clearly explains as to what are not an ‘inventions’, i.e. “plants and animals in whole, or any part, thereof, other than microorganisms, but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.” Thus, Nuziveedu asserted that claim 25 of the Patent relates to ‘nucleic acid sequence’, application of which  is only in terms of “a plant cell, a seed, a transgenic plant “or a plant variety”. Thus, the specification does not provide any industrial application. Since, a plant or seed, which has such a nucleic acid sequence containing the Cry2Ab gene, cannot be granted a patent in India as this (claim 25) falls squarely within Section 3(j) of the Act.” Further, Nuziveedu contended that Bt. Trait in Cotton Hybrid varietal plants is an essential biological process, and did not regard cross-bred plants and animals as patentable because they are better regarded as ―discoveries[10] which happens naturally and therefore, its just a discovery which has taken place in a laboratory.

Monsanto interpreted the term ‘Plant’ under section 3(j) as a “living organism” and further averred that exclusion would apply to biological entities, per se and not to inventions, which properly fit the description of “micro-organisms” that are excluded specifically from the mischief of the provision. It explained that “DNA” is the “substance responsible for all the processes within a living organism”  and a ‘gene’ is merely a code which is used for production of a protein in a living organism, thus it is not a living thing. Therefore, the subject matter of the patent (Claim Nos. 25-27) are manmade DNA sequences comprising the CryAb gene which confers insect resistance to plants, when incorporated into the plant’s genome. They emphasized that no part of the DNA sequence is a living organism and thus DNA cannot be called as “part” of a plant as well, because it is not like an organ of an animal or the physical attribute of a plant, like flower, fruit, etc.  This is a method of creating transgenic varieties and micro-organisms that are new and inventive transgenes and therefore, very much a Patentable subject matter under the Patents Act.

  1. Applicability of Plant Variety Act

Since ‘Micro-organism’ has not been defined by Plant Variety Act, Nuziveedu provided a Cambridge Dictionary definition of ‘Micro-organism’ as “A living thing that on its own is too small to be seen without a microscope, such as bacteria, germs, viruses. Thus, negated Monsanto’s contention that their Patent claim is inanimate and Patentable. Nuziveedu, emphasized on the history of India’s ratification to the TRIPS Agreement, as consequences to which Plant Variety Act was enacted with the objective to protect plant varieties and, the rights of the breeders and also to encourage the development of new varieties of plants. Nuziveedu contended that since the questioned Patent comes under the definition of micro-scopic living entity and a part of plant variety , thus it should   rather be protected by under the Plant Variety Act instead of Patent Act.

However, Monsanto rebutted the contentions of Nuziveedu by averring that the patented ‘trait’ or DNA is beyond the scope of the expression “plant variety” as defined as ‘plant variety’ with a commentary note which comprehensibly excludes ‘such a plant or part(s) of the plant could be used to propagate the variety) a trait (e.g. disease resistance, flower color),  a chemical or other substance (e.g. oil, DNA),  a plant breeding technology (e.g. tissue culture)” by International Convention for the Protection of New Varieties of Plants (UPOV Convention 1991). Further, Monsanto elaborately mentioned the history of the Patent amendments in order to explain that through various amendments of the concerned Act in 2002 and 2005, and on observing section 3(j) and section 2(1) (j) read with the objects and reasons of the amendments:

4. some of the salient features of the Bill are as under :

(a). …

(b). to modify section 3 of the present Act to include exclusions permitted by TRIPS Agreement and also subject matters like discovery of any living or non-living substances occurring in nature in the list of exclusions which in general do not constitute patentable invention.

So it is very clear that the patentee is entitled to Patent protection for the invention resulting from innovations and skill and the subject claims being products or processes of biotechnology. They also observed that when the patented invention is injected into the cotton seeds which provides a hybrid variety, then that hybrid variety can be protected under Plant Variety Act and the invention will be protected under Patent Act.

  1. Trade Mark Violation and Sub-Licensing issue:-

Monsanto alleged that termination of Sub- Licensing was perfectly legal as Nuziveedu failed to provide the required trait value to Monsanto for using their technology. As a matter of right, they could injunct Nuziveedu from using their Patented technology and abbreviation of their trademarks BG I and BG II. Further, once the agreement has been terminated it cannot be restored and the parties cannot be directed to perform the obligations contained therein as per Section 14(1) of the Specific Relief Act, 1963.[11]

However, Nuziveedu claimed that by virtue of  seeds included under the Essential commodity Act, 1955, the Central Government is empowered to fix the trait value of the seeds, exceeding which, one cannot terminate the agreement on the grounds of non-payment of licensee fee. Nuziveedu rebutted the reliance taken by Monsanto under section 42 of specific Relief Act, by asserting that it cannot be bound by those obligations (trait fees) fixed by Monsanto, to which only the Central Government is empowered to fix. Thus, relief under the mentioned provision apropos the present case negated. Furthermore, based on this contention questioned the validity of such termination of sub-licensing agreement, terming it as an arbitrary action taken by Monsanto.

In addition to this, Nuziveedu also averred that such technology is only capable to be protected under Plant Variety Act, which Monsanto neglected, thereby avoiding the provision of Benefit sharing[12] arrangements with the seed companies who developed new Bt. Cotton plant varieties expressing Bt trait (subject Patented).

However, in order to rebut the above-stated contentions, Monsanto referred to the judgment of Percy Schmeiser case[13], where “purposive construction‟ was applied to the similar facts and it was held that Monsanto’s gene patent was infringed by “use”, when an unauthorized person developed and commercialized seeds containing the patented gene, since the gene was present throughout the seed, conferring the advantageous trait to the plant and this amounted to taking advantage of the technical contribution of the patentee. Similarly, Nuziveedu has also taken full advantage of the functionality of insect tolerance arising solely from the use of the patented DNA sequences in their cotton hybrid, thereby infringing their subject Patent. Thus, Nuziveedu is infringing Monsanto’s Patent, as it is using their invention to bring out the ultimate product.

With respect to the, Trademark violation by Nuziveedu, it is claimed by the alleged party that they did not intend to use the mark on their product and have just used the abbreviations of Monsanto’s Trade mark, only with the intention of indicating the source which has been used in manufacturing the product, which is legitimate as being a descriptive mark under section 35 of the Trade marks Act, 1999. Moreover, infringement of Trade mark can occur only if a registered mark is used as ‘Trademark’ and not otherwise.[14]

The Delhi High Court Decision

The division bench of Delhi High Court analyzed contentions of both the parties, it upheld Nuziveedu’s Contention and observed that protection under Plant Variety Act and Patent Act are not complimentary but are exclusive of each other and Monsanto Patent protection was incorrect as it should have been protected under the Plants Variety Act, looking at the nature of invention.

On account of the above reasons and by observing that Monsanto had failed to disclose the details as well as source  of its invention as per section 10(4) of the Act and  the Court held that the subject patent falls comes under the ambit of Section 3 (j) of the Patents Act i.e. the said inventions are not patentable. Therefore, Counter claim filed by Nuziveedu is consequently allowed. The Court further gives Monsanto, an opportunity to restore its right in there subject Patent, by allowing them to seek for registration of the same within three month  from the date of this judgment, i.e. 11.07.208.

With regard to Trade mark infringement, the Court observed that the defendants do not have any malafide  intention  to use the Plaintiff’s marks “BOLLGARD” or “BOLLGARD-II”,  rather, Nuziveedu is only using the abbreviation of  the name which is permitted under section 2 (o) of Trademarks Act.

Further, the Court directed Monsanto to continue with its obligations under the sub-license agreements and allowed “the suit to proceed with respect to the claim for damages and other reliefs”, in the light of the sub-license termination notices issued by Monsanto. The Court also provided a period of three months to Monsanto to seek protection of their subject Patent

Analysis

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 Justice  Mr. Justice S. Ravindra Bhat and  Mr. justice Yogesh Khanna, 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. I feel that with 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.

Monsanto, being the world’s biggest agricultural company also may prefer a special Leave Petition for the above placed decision. Let’s wait and watch what’s in store for the company and Nuziveedu has been lucky so far having the laws of the land by its side. If Monsanto appeals against the judgment, which is more probable to happen then The question on  3(j) would definitely arise as to its need, intention and validity in the contemporary world having advanced technological inventions, ideas and its needs.

Author: Pratistha Sinha, Associate at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com

References:

[1] Section 64 (1)(e), The Patents Act, 1970

[2] Section 64 (1)(f), The Patents Act, 1970

[3] Section 64 (1)(d), The Patents Act, 1970

[4] Section 64 (1)(h),The Patents Act, 1970

[5] Section 64 (1)(i), The Patents Act, 1970

[6] Section 64 (1)(j), The Patents Act, 1970

[7] Section 64 (1)(m), The Patents Act, 1970

[8] Section 64 (1)(b), The Patents Act, 1970

[9] Section 64 (1)(g), The Patents Act, 1970

[10] Harvard College v Canada (Commissioner of Patents),[ 2002] 4 SCR 45

[11]Indian Oil Corporation Ltd. v. Amritsar Gas Services and Ors., (1991) 1 SCC 533

[12] Section 26, Plant Variety Act

[13]Percy Schmeiser v Monsanto 2004 1 SCR 902

[14] Section 29, Trade Marks Act,1999

Advertisements

India’s time to delve into IP laws

Shireen Shukla, legal intern at Kkurana & Khurana, probes the recent International IP Index report, released by U.S. Chamber of Commerce, where India stood at 43rd position, out of 45 countries.

On 8th February, 2017 U.S. Chamber of Commerce released its 5th annual International IP Index, “The Roots of Innovation,” rating 45 world economies on patents, trademarks, copyright, trade secrets, enforcement, and international treaties with the aim to provide both, an IP report card for the world and a guidebook for policymakers seeking to bolster economic growth and innovation.

It is an undeniable fact that protection of intellectual property serves dual role in the economic growth of a country. Where on one hand it promotes innovation by providing legal protection of inventions, on the other it may retard catch-up and learning by restricting the diffusion of innovations. Therefore a sounder IPR protection in a country encourages technology development and technology transfer from developed to least developed countries. Countries that would demonstrate a commitment to IP laws will only reap rewards.

Often we have seen that major companies and brands invest their money or open their outlets in another country only after seeing the soundness of their IP laws. This proves the role of IP laws and enforceability on the GDP of a country.

GIPC is leading a worldwide effort to champion intellectual property rights as vital to creating jobs, saving lives, advancing global economic growth, and generating breakthrough solutions to global challenges  (Reddy, 2017). The Index ranked the IP systems of 45 countries. Where on one hand United States was ranked number 1, India and Pakistan were ranked 43 and 44 respectively.

Image Source: U.S. Chamber International IP Index: http://www.theglobalipcenter.com/ipindex2017-chart/#

 

Some major facts from the IP Index:

  • A pack of global IP leaders emerged among the 2017 Index rankings, with the U.S., UK, Japan, and EU economies, ranked more closely together than ever.
  • Canada signed the Comprehensive Economic and Trade Agreement (CETA), which raised the bar for life sciences IP protection.
  • Russia introduced new forced localization measures.
  • Japan’s score increased by 10% due to ratification of TPP and accession to the Index treaties.
  • South Korea passed amendments to the Patent Law.
  • Uncertainty around software patentability, Section 3(d) of the Patent Law, and High Court copyright decisions in India continue to present challenges.
  • Indonesia’s Patent Law included a heightened efficacy requirement and outlawed second use claims.
  • South Africa introduced new local procurement policies.
  • UAE created a specialized IPR Court.
  • Indian government issued the National Intellectual Property Rights Policy in 2016.

India announced the much-awaited National IPR Policy in May 2016. This act proved to be a positive attitude to foster the IP laws in India. The Policy is a boon for the IP industry as it provides constructive ways and methods to improve IP administration. The policy has enumerated the importance to educate Indian businesses about IP rights.

The Policy makers realizing the real issue in hand, addressed a number of important gaps in India’s national IP environment, which included the need for stronger enforcement of existing IP rights through the building of new state-level IP cells and investing more resources in existing enforcement agencies; reducing processing times for patent and trademark applications; as well as the need for introducing a legislative framework for the protection of trade secrets

Major developments and landmark judgments in Intellectual property laws since 2015:

  • The Delhi high court on 7 October 2015, barred Mumbai-based Glenmark Pharmaceuticals Ltd from selling, distributing, marketing or exporting its anti-diabetes drugs Zita and Zita-Met,as they tentatively infringed the patent of US-based pharmaceuticals company Merck Sharp and Dohme Corp.
  • In March, 2016, the Delhi High court in the case of Ericcson v. CCI for the first time ever, considered at how IP law interfaced with competition law. It allowed Competition Commission of India (CCI) to continue its investigation into anti-competitive practices by Ericsson regarding use of its SEP’s by other companies such as Micromax and Intex.
  • National IPR Policy in 2016, released last year is entirely compliant with the WTO’s agreement on TRIPS.
  • Examination time for trademarks has been reduced from 13 months to 8 months in the 2016 policy.
  • Bombay HC passed a series of judgments cases (Phantm Films pvt, Ltd. v. CBFC & Anr; Eros International Media Ltd. & Another v. Bharat Sanchar Nigam Ltd.) laid down a strict agenda for the grant of John Doe orders leading to path breaking shift in the John Doe jurisprudence in India. The above-mentioned judgments are focused on balancing the interests of not just copyright holders but also the Internet users and innocent third party providers.
  • The judgment by Bombay HC in Eros v. Telemax, is a pioneer that unwrapped the scope of arbitration of IP disputes arising out of licensing and other commercial transactions.
  • In December 2016, the Delhi High Court in the case of Agri Biotech v. Registrar of Plant Varieties declared section 24(5) of the Plant Varieties Act unconstitutional. The court giving a momentous judgment stated that the section violates Article 14 as it gives unchecked powers to the Registrar. The registrar is not required to be from a legal background in order to grant interim relief to a breeder against any abusive third party act during the period its registration application is pending.This lead to arbitrary use of powers by the registrar.

Beside the above-mentioned developments and progressions, PM Narendra Modi’s “Make in India” initiative also aims to promoting foreign direct investment and implementing intellectual property rights. In these initiatives, the government has decided to improve the intellectual property rights for the benefit of innovators and creators by modernizing infrastructure, and using state of the art technology.

One of the most recent and effective change brought in the trademark rules was on 6th march 2017, where the number of trademark forms have been reduced from 74 to 8 with an aim of simplifying the process of trade mark applications. The new rules promote e-filling of the trademark applications. The fee for online filing of the application is 10 per cent lower than that of the physical filing.

Steps India can take to strengthen its IPR laws:

  • India should implement speedy examination and registration procedures.
  • It should take effective steps to achieve the target of one month (as stated in IPR policy 2016).
  • The number of patent examiners and trademark offices should be increased to improve efficiency and disposal speed.
  • Section 3(d) of India’s Patent Act 1970, relating to restrictions on patenting incremental changes should be amended. Norms relating ever greening should also be revised.
  • A new and revised IPR laws and policies should be implemented so as to make it compatible with IPR laws of WIPO, TRIPS and other major dominant countries like US & UK

Every fiscal year, enormous time and money is being invested on R&D to improve the existing status of the Intellectual property laws in India, to bring it at par with the IP laws of US. We hope by following the above guidelines and following the National IPR Policy, India’s position improves in the next International IP Index 2017.

References :

  1. Prashant Reddy, The Press Release Journalism Around the GIPC IP Index, February 13, 2017, < https://spicyip.com/2017/02/the-press-release-journalism-around-the-gipc-ip-index.html&gt; Last accessed: 28th February 2017
  2. Merck Sharp And Dohme Corporation. v. Glenmark Pharmaceutical, FAO (OS) 190/2013, C.M. APPL. 5755/2013, 466/2014 & 467/2014, (Delhi High Court) (20.03.2015)
  3. Telefonaktiebolaget LM Ericsson v. Competition Commission of India, W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014, (Delhi High Court) (30.03.2016)
  4. Phantom Films Pvt. Ltd. v. The Central Board of Film Certification, W.P.(L) 1529 /2016, (Bombay High Court) (13.06.2016)
  5. Eros International Media Limited v. Bharat Sanchar Nigam Limited, C.S. No.620 /2016 & O.A.Nos.763 to 765/2016 (Madras High Court) (25.10.2016)
  6. Eros International Media Limited v. Telemax Links India Pvt. Ltd., Suit no. 331 /2013, (Bombay High Court) ((12.04.2016)
  7. Prabhat Agri Biotech Ltd. v. Registrar of Plant Varities, W.P.(C) 250/2009, (Delhi High Court) (02.12.2016)