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

 

Introduction

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 (respondents in the case before division bench) was challenged and the appellate court held that since the respondent’s claim was not filed appropriately, therefore, their patent was disallowed, however, they were given the opportunity to file it appropriately.

Facts

• The plaintiffs/respondents i.e. 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 plaintiff/respondents had registered one of their claims under Patent No. 214436 which they had further licensed to Indian companies including the appellant/defendant i.e. 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 respondent to adjust the trait fee according to the new orders passed by the Government.

 

• The respondents 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 appellants thereby approached Competition Commission of India (CCI) against the respondents accusing them for anti-competitive practices and for abusing their dominant position in the market.

 

• The respondent thereby terminated the license and proceeded an arbitration proceedings 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 respondent 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 respondent’s patent. They argued that the patent of respondent 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 appellant to revoke the patent of the respondent. Further it ordered that the appellants can pay the trait fees in accordance with the norms set by State Government.

 

• Also the appellants 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 appellant filed the appeal against the order validating the patent of respondent whereas the respondents were aggrieved of the order of reviving the licenses of the appellants.

 

Issues raised-

• Whether the Patent No. 214436 was a valid patent looking after the fact that the respondents 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 trait fee as claimed by the respondents.

 

• Whether the appellants can use the patent of the respondents.

Judgment Delivered-

The Division Bench of Delhi High Court while deciding on the above matter struck down the decision of Single Bench thereby stating the following:

• The Court after analyzing the contentions made by both the parties upheld appellant’s contention regarding the validity of respondent’s patent and therefore held that the protection under Plant Variety Act and Patent Act shall not be considered as complimentary protections as but are mutually exclusive from each other.

 

• Therefore the respondent’s Patent protection was held to be invalid as it must have been protected under the Plants Variety Act and not Patent Act.

 

• Further, the court observed that respondents had failed to disclose the required details along with the source of their invention as per the requirement of section 10(4) of the Patent Act.

 

• The Court on deciding upon the first issue further held that the disputed patent would fall within the ambit of Section 3 (j) of the Patents Act which lays down the inventions that are not patentable.

 

• Hence, the claim filed by Appellants regarding the first issue was consequently allowed. However, the court gave an opportunity to the respondent to restore their right in the disputed patent and the patented invention within a period of three months from the date of order i.e. 11^th July 2018 by applying and obtaining registration over the subject matter patent under proper act.

 

• In deciding for the issue related to infringement of Trademark by the appellants, the Court observed that the appellants did not have any malafide intention to use the respondent’s marks “BOLLGARD” or “BOLLGARD-II”. The appellants were merely using the abbreviation for the Trade Marks that has been allowed as per section 2(o) of Trademarks Act.

 

• The court further granted the respondents their right to allow licenses to other companies subject to their application within prescribed period under the proper Act.

 

• The court also refused respondent’s wrongful claim of Rs. 400 crore from the appellants and other licensees.