Nuziveedu Seeds vows to battle Monsanto
GIVEN THAT plants, parts of plants, seeds, plant varieties are excluded from patent protection by the Indian Patent Act, 1970, Nuziveedu Seeds said that Monsanto should never have been allowed to collect royalty after initial payment to use its technology
The Nuziveedu Seeds Group categorically stated that it would continue its legal battle against US-based biotechnology giant Monsanto’s joint venture in India until the entire `800 crore, which had been collected from in the form of royalty was returned to it.
It stated that Monsanto had cheated Indian seed companies and illegally collected royalties. It said the company misled the government on patent issue and collected royalty.
Responding to a letter sent by Mahyco Monsanto Biotech Ltd. (MMBL) to the Union agriculture minister. Nuziveedu Seeds Group chairman M. Prabhakara Rao told this paper, “We received favourable orders from the Delhi High Court in March this year, which directed Monsanto to revive our sub-licence agreement that was terminated illegally. But they have appealed against those orders again, and the case is pending. There are four cases pending in different courts.”
He said that the company would continue its legal battle until the entire `800 crore was returned to it.
In its letter to the agriculture ministry, MMBL says that it has “amicably settled” its dispute with three Indian companies — Ajeet Seeds, Kaveri Seed Co. Ltd. and Ankur Seeds. According to sources, these three companies owed about `300 crore.
MMBL added that the arbitration process to settle the matter with the remaining five companies, including the Nuziveedu Seeds Group, was still underway.
Firms in the Nuziveedu Seeds Group — Nuziveedu Seeds Ltd., Prabhat Agri Biotech Ltd. and Pravardhan Seeds Pvt. Ltd — are owed `145 crore in all, and Amar Biotech Ltd. and Sri Rama Agri Genetics `15 crore.
The battle gathered pace in 2015, when MMBL, the joint venture through which Monsanto was selling cotton seeds and sub-licensing Bt cotton seed technology in India, took Hyderabadbased Nuziveedu Seeds Ltd. to court claiming patent infringement.
MMBL accused the company of continuing to use Monsanto’s technology even after its licensing contract was cancelled.
Monsanto and Nuziveedu Seeds had been in a long-term licensing agreement whereby Nuziveedu Seeds was entitled to use Monsanto’s patented seed technology — Bollgard II, for which Monsanto received a patent in 2009. The technology enables cotton seeds to be modified to include Bacillus thuringiensis, a microbe which fortifies cotton plants against Lepidopteran insect damage.
In June 2015, about three months after renewing the licensing contract, Mr Prabhakara Rao sent one of his executives to Monsanto’s office in Mumbai to demand a 10 per cent cut in royalties, which Monsanto refused to grant.
A month later, a group of nine seed companies, of which Nuziveedu Seeds was a part, wrote to MMBL seeking a reduction in the royalty charges paid by them on account of changes being implemented by some state courts in the rules governing the amounts that could be charged for seeds. However, Monsanto dismissed the demands and suggested that the companies keep the matter “bilateral”.
MMBL terminated the licence agreements of Nuziveedu and its group for refusal to pay contractually agreed trait fees amounting to more than $20 million despite having collected the full retail price from farmers.
Later, the ministry launched an anti-trust investigation to ascertain whether Monsanto had abused its dominance in the marketplace.
Given that plants, parts of plants, seeds, plant varieties all stand excluded from patent protection by virtue of Section 3(j) of the Indian Patent Act, 1970, it was further argued by Mr. Rao that Monsanto should never have been allowed to collect royalties after an initial payment to use its technology. Or, at the very least, prices should have been set by the government.
The Delhi High Court ruled the infringement dispute by Monsanto in favour of Nuziveedu and said the agreement of 2015 shall prevail.