Background

Lays potato chips, a product of Pepsico, uses FL-2027 variety of potatoes which was introduced in 2009 in India. It came into limelight in April 2019, when Pepsico filed infringement cases against farmers in Gujarat and alleged that nine farmers who are growing and selling this variety in Gujarat are not part of its “collaborative farming programme”. Additionally, filed a lawsuit of Rs.4.2 Cr against four small farmers under the Act. However, widespread protest and boycott threats by political parties and farmers groups, forced Gujarat government to step in and this forced Pepsico to withdraw all cases in May 2019. Following which Ms. Kuruganti filed an application to revoke Pepsico’s registration in June 2019 on the grounds of being against the public interest.

Summary of the final judgement by PPV&FV

On Dec 03, 2021, PPV&FV revoked the registration of potato variety FL 2027 registered in favor of Pepsico India Holdings Private Limited. The revocation application submitted was mainly based on the grounds of providing incorrect information by the applicant, certificate of registration is not valid and that the grant of certificate of registration is not in the public interest. Based on the arguments submitted by the defendant and the facts, on December 03, 2021, the registration of FL 2027 was revoked under Sections 34 (a), (b), (c), and (h) of PPV&FR Act, 2001. Additionally, the registrar was asked to develop a standardized sheet for evaluation of application for registration of plant varieties in accordance with Act, Rules and Regulations.

Opinion

Revocation of the registration certainly made the farmers of India happier, as it allowed them to buy or sell FL 2027, a variety of potato without being the member of the “collaborative farming programme”. This decision as such, if misunderstood, could deter many of the large entities from entering India who might want to bring in new varieties of plants. In this case, the PPV&FR revoked the registration only after it was proven that the defendant may not have submitted all the documents as per the requirements, even after being requested. As alleged in the Revocation Application, it was found that Dr. Robert W Hoopes, who is the breeder of FL 2027, has not validly assigned it to the Assignee (Recot Inc subsequently name changed to Frito-Lay North America (FLNA)). Additionally, it was pointed out that several farmers were put to hardship including the looming possibility of having to pay huge penalty on the purported infringement they were supposed to have been committing which did not eventually happen as on date.

Considering the facts of the case and the evidence, it is evident that the registration of potato variety FL 2027 registered in favor of Pepsico India Holdings Private Limited was revoked as a result of negligence or intentionally trying to mislead the authorities in India. We are of the opinion that after the creation of the standardized sheet by the registrar, instances such as this could be reduced to a large extant. Additionally, this will help the future applicants with easier and streamlined process for registration of their plant variety and will avoid any complications that may arise in future as happened in case of the registration of potato variety FL 2027.

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PepsiCo India Holdings Pvt. Ltd. (“PepsiCo”) had filed cases against several farmers and business entities alleging infringement of its IP in potato plant variety FL 2027. PepsiCo has now withdrawn cases filed against farmers, in view of what appears to be under political pressure. Although withdrawal of cases may have provided short-term relief to the farmers, a long-term solution in favour of farmers may have been achieved had the cases been pursued.

To provide a bit of background, PepsiCo has protected its potato plant variety FL 2027 under the Protection of Plant Varieties and Farmers Rights Authority (PPV&FR) Act, 2001. PepsiCo sought permanent injunction restraining the farmers from using FL 2027. The PPV&FR Act defines what constitutes infringement U/S 64 (reproduced below, with emphasis added). A breeder of a variety registered may allege infringement if any entity carries out acts that fall within the scope of Section 64.

64. Infringement.—Subject to the provisions of this Act, a right established under this Act is infringed by a person—

(a) who, not being the breeder of a variety registered under this Act or a registered agent or a registered licensee of that variety, sells, exports, imports or produces such variety without the permission of its breeder or within the scope of a registered licence or registered agency without permission of the registered licensee or registered agent, as the case may be;

(b) who uses, sells, exports, imports or produces any other variety giving such variety, the denomination identical with or deceptively similar to the denomination of a variety registered under this Act in such manner as to cause confusion in the mind of general people in identifying such variety so registered.

While Section 64 defines infringement, Section 39 protects various interests of farmers. Particularly, Section 39(1)(IV) (reproduced below, with emphasis added) entitles farmers to save, use, sow, resow, exchange, share or sell his farm produce including seed of a variety protected under the Act in the same manner as he was entitled before the coming into force of the Act. Exception being, farmers are not entitled to sell branded seed of a variety protected under the Act.

39. Farmers’ right.—

(1) Notwithstanding anything contained in this Act,—

(iv) 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: Provided that the farmer shall not be entitled to sell branded seed of a variety protected under this Act. Explanation.—For the purposes of clause (iv), “branded seed” means any seed put in a package or any other container and labelled in a manner indicating that such seed is of a variety protected under this Act. 

Notably, provisions of Sections 64 are “subject to the provisions of this Act”, whereas rights under Section 39 are “notwithstanding anything contained in this Act”. Therefore, the entitlement of farmers under Section 39 can be argued to triumph over the provisions of Sections 64. Consequently, it appears that an IP owner of a registered variety cannot stop farmers from saving, using, sowing, resowing, exchanging, sharing or selling (not as branded seed of a variety protected) his farm produce including seed of the protected variety. Given the forgoing observations, as mentioned earlier, a long-term solution in favour of farmers may have been achieved had PepsiCo continued to pursue cases against the farmers.

We hope this article was a useful read. 

Please feel free check our services page to find out if we can cater to your requirements. You can also contact us to explore the option of working together. 

Best regards – Team InvnTree   

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License