Monsanto patent victory seen as a boost for biotech investment in India (updated)

Kaveri Seed

08/01/2019 07:16

* Court decision will ease fears of seed makers over patent
cover
    * Nationalist group unhappy over court verdict
    * Farmer group welcomes ruling

 (Updates with comment from India's Nuziveedu Seeds in para 13)
    By Mayank Bhardwaj and Rajendra Jadhav
    NEW DELHI/MUMBAI Jan 8 (Reuters) - India's Supreme Court
ruled on Tuesday that Monsanto can claim patents on its
genetically modified (GM) cotton seeds, a victory for the U.S.
company that is expected to encourage   biotechnology firms to
step up investment in the country. 
    The decision on appeal overturns an earlier ruling by the
Delhi High Court that Monsanto - the world's biggest seed maker,
which has been bought by Germany's Bayer AG  BAYGn.DE  - could
not claim patents on GM cotton seeds.  urn:newsml:reuters.com:*:nL3N1SB3MP
    The outcome is positive for foreign agricultural companies
such as Bayer, Dupont Pioneer and Syngenta  SYENF.PK  which have
been concerned they could lose patents on GM crops in India.
    The ruling was criticised by a nationalist group, which has
links to the ruling Bharatiya Janata Party (BJP) and which
favours non-GM technologies and "India first" economic policies,
but it was welcomed by one of India's main farmers'
associations.
    "This is a very good move as most international companies
have stopped releasing new technology in the Indian market due
to the uncertainty over patent rule," said Ajit Narde, a leader
of the Shetkari Sanghatana, a farmers' body, which has been
demanding access to new technologies.
    Access to advanced technology was important to help Indian
farmers compete with rivals overseas, Narde said.
    New Delhi approved Monsanto's GM cotton seed trait, the only
lab-altered crop allowed in India, in 2003 and an upgraded
variety in 2006, helping transform India into the world's top
cotton producer and second-largest exporter of the fibre.
    Monsanto's GM cotton seed technology went on to dominate 90
percent of India's cotton acreage. But for the past few years
Monsanto has been at loggerheads with Indian seed company
Nuziveedu Seeds Ltd (NSL) over patents, drawing in the Indian
and U.S. governments. (reut.rs/2ncBknn)
    The Delhi High Court ruling came after NSL argued that
India's Patent Act does not allow Monsanto any patent cover for
its genetically modified (GM) cotton seeds.
    M Ramasami, chairman of the Federation of Seed Industry of
India which represents foreign seed makers, said the Supreme
Court ruling would encourage the development of new seed
technologies and farm processes which in turn would benefit
farmers and improve the competitiveness of India's farm economy.
    Mahyco Monsanto Biotech (India) (MMB), a joint venture
between Monsanto and India's Maharashtra Hybrid Seeds Co
(Mahyco), sells GM cotton seeds under license to more than 40
Indian seed companies, which in turn sell product to retailers. 
    
    Monsanto's Indian joint venture had terminated its contract
with NSL in 2015 after a royalty payment dispute, escalating
tensions over seed technology.
    The Supreme Court on Tuesday also said the Delhi High Court
would examine Monsanto's claims that NSL infringed its
intellectual property on Bt cotton seeds.
    NSL said in a statement after the ruling that it stuck to
its claim that India's Patent Act does not allow Monsanto any
patent cover for its GM cotton seeds and that it was also
"confident of succeeding" before the Delhi court. 
    After the court verdict, shares of Monsanto India Ltd
 MNSN.NS  climbed as much as 13.4 percent before paring most
losses to close up 2.8 percent.
    The nationalist group close to Prime Minister Narendra
Modi's BJP that opposes GM technology said it would seek a
legislative amendment to the rules governing patents.
 urn:newsml:reuters.com:*:nD8N1WB00W
    The government has not taken a stance on this case and a
spokeswoman at the farm ministry did not immediately respond to
an email seeking comment on the Supreme Court ruling.
    The ministry has twice slashed royalties that local seed
companies pay to Monsanto in the past two years. The ministry
also cut cotton seed prices.  urn:newsml:reuters.com:*:nL3N1QV2K7  urn:newsml:reuters.com:*:nL4N1QQ4EN
    Monsanto has also been battling a proliferation of illegal
planting of its herbicide-tolerant cotton varieties.
 urn:newsml:reuters.com:*:nL4N1Q45SB  urn:newsml:reuters.com:*:nL4N1TE4IH
    After a spate of unfavourable government orders and a tussle
over royalty payments, Monsanto in 2016 withdrew an application
seeking approval for its next generation of GM cotton seeds in
India. (https://reut.rs/2jbDq80)

 (Additional reporting by Suchitra Mohanty; Editing by Richard
Pullin and Susan Fenton)
 ((mayank.bhardwaj@thomsonreuters.com; +91-11-4954 8030;
Twitter: @MayankBhardwaj9; Reuters Messaging:
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