As per a recent report in the Financial Express by Vivian Fernandes, the PPVFR Authority, constituted under the Protection of Plant Variety & Farmer’s Rights Act, 2001 has finally done away with a long-standing requirement of producing a ‘No-Objection-Certificate’ (NOC) from the patentee of a particular GM trait that is used by a breeder while developing a new plant variety and which variety he seeks to register under the PVPFRA.
Since the interplay of these rights is slightly confusing, let me briefly explain the manner in which it works. The GM trait, is a biotech invention, achieved through genetic modification. In the context of Bt. cotton, the genes of a bacteria called bacillus thuringiensis (Bt.) are introgressed into the cotton genome – the toxins generated by this modification repels a certain class of pests that are prone to attacking the cotton plant. While the GM traits are useful in repelling pests, the ability of the cotton plant to grow and generate cotton are determined by the manner in which breeders grow the new plant variety. Given the climatic and soil variations across India, different plant varieties will grow differently in different parts of the countries. It is the job of breeders to keep developing new plant varieties that grow better and faster, producing better quality of cotton. Unlike the biotech sector where Indians are quite weak, they are quite good at developing new plant varieties. Typically, Indian seed companies seek licences from the GM trait owners like Monsanto to introgress patented GM traits in their own plant varieties. They may then want to release the new plant varieties in the market and protect them like any other new varieties that they develop. It is in this context that the NOC requirement has become a bone of contention.
As argued in an earlier post on SpicyIP, by Essenese Obhan, a lawyer representing the Indian seed companies, in their ongoing litigation against Monsanto, this requirement to produce a NOC is not supported by the text of the PVPFRA and is often a stumbling block for Indian seed companies to seek protection for new plant varieties that they may have developed.
According to Fernandes’s report, the Additional Solitictor General Tushar Mehta (who previously tried to intervene in the ongoing litigation between Monsanto & Nuziveedu without authorisation from the government) has opined that “the requirement of NoC from the patent-holder for registration of a variety or hybrid containing a patented trait had no basis in the PPVFR Act.”
I think the Authority has taken the right step in doing away with this NoC requirement because it lacks the mandate or the expertise to examine whether a patent is being infringed when the invention covered by the patent forms a part of a new plant variety. Such efforts to interlink different statutory authorities is not new in the Indian context – we have seen pharmaceutical companies attempt to link patent enforcement with regulatory clearances by drug regulatory authorities. Ultimately, they failed in their attempt after the Delhi High Court held that the law did not require such linkage.
Apart from the NoC sought by the authority under the PVPFRA, the second NoC that was required by plant breeders who wanted to release their new plant varieties, was in the context of approvals granted by the environmental regulator – the Genetic Engineering Approval Committee (GEAC). According to one of the notes put out by the National Seed Association of India (NSAI) on its website, GEAC required a NoC from the company that had developed the GM trait (usually Monsanto) before approval could be granted to release a new transgenic variety in the market. Apparently this was one of the reasons that Indian companies were forced to sign allegedly ‘one-sided’ licensing agreements with Monsanto. Even this NoC requirement has reportedly been scrapped and new plant breeders will not require such NoCs from Monsanto or any other company that has developed the new GM Trait.
What does the scrapping of these NoCs mean from Indian seed companies? Well, it means that they can release their new plant varieties in the market without facing the prospect of biotech companies like Monsanto withholding permission and blocking the release of new plant varieties. It reduces the ability of Monsanto to control the market and that is a good thing. However, this does not mean that Monsanto cannot sue them for patent infringement or breach of a licensing agreement. The only way out in such cases is to sign a licensing agreement with Monsanto and there is nothing the law can do to restrain Monsanto from imposing similar restrictive covenants as a part of its licensing requirements unless of course the Competition Commission of India deems such restriction covenants to be unreasonable.
Dear Mr. Prashant Reddy,
Your article on scraping of NOC requirement is a fair and objective analysis of the decision of the PPV&FR Authority and GEAC dispensing with the NOC requirement. You hit the nail on the head by saying that NOC was one of the reasons that Indian companies were forced to sign one-sided licensing agreements with Monsanto. NOC was not one of the reasons but the only reason. Public sector seed companies and research institutes are the ones, which were badly hit not being able to access the Bt trait due to NOC imposition. You have rightly appreciated the decision to do away with NOC.
However, a good article ended with wrong signals. Let me clarify, Monsanto cannot claim patent rights on plants and varieties including seeds, containing patented Bt gene, under the Indian Patent Act. Monsanto was granted patents in India only after deleting its claims on plants, varieties and seeds. You have pointed this clearly explaining the rejected claims in your article dated 4th September 2016. This is the precise reason for Monsanto getting stipulated the NOC requirement by regulatory bodies to overcome lack of patent rights.
The Administrative Council of the European Patent Organization (EPO), on representation of European Seed Association,has recently amended the Regulations to exclude plants or animals, developed through an essentially biological process out of patentability. Now, European Union has moved towards Indian paradigm for IPR protection of plants, endorsing the IPR position taken by Indian seed companies like Nuziveedu Seeds Limited. The Indian PPVFR law is fair to the trait developers as it entitles a benefit share to the trait developer from the breeder. We feel Europe may have to adopt similar provision.
S. M. Khan
Consultant (Technical & Legal)
Nuziveedu Seeds Limited
National Seed Association of India’s (NSAI) stand, on implementation of Section 3(j) excluding plants or animals, developed by essentially biological processes, is also endorsed by the European Patent Organization (EPO). EPO has amended on 29th June, 2017 the Implementing Regulations to the European Patent Convention by excluding plants and animals, obtained by means of an essentially biological process, from patentability. The section 3(j) of IPA exclusions are more (like plant, cell, tissue, seed or parts thereof) as compared to the provisions of section 53(b) of EPO (which only covers plant and animal varieties and essentially biological processes).
NSAI has always contended that the Indian PPV&FR Act is a complete code, protecting the interest of all the stakeholders. Section 30 of the Act enables a breeder or a farmer to use any variety, even registered under the Act, to develop new plant varieties. The development of a new plant variety is always through an essentially biological process. A trait developer is also protected and rewarded under section 26 of PPV&FRA. The trait developer is entitled to make a claim to the PPV&FR Authority for benefit sharing on the plant variety, containing his transgenic or non-transgenic trait, developed and commercialized by the breeder. The PPV&FR Authority, being a statutory authority, would take all factors into consideration and determine a reasonable, fair and just benefit sharing amount so as to protect the interest of all the stakeholders. Indian farmer cannot afford to pay an exorbitantly high royalty, arbitrarily fixed by a monopolist company. This is the philosophy behind enactment of PPV&FR Act 2001 and amendment of Indian Patents Act in 2002. Now, UPOV 91 may have to bring in a provision like the section 26 of the PPVFRA.
I think the article misses some important facets. In the context of the PPVFRA, Section 18(1)(h) mandates that an applicant for a new variety must declare that the genetic material used in the development of the variety has been lawfully acquired. Obviously, statutory interpretation requires that this mandate not be rendered otiose. Logically, where one of the genetic materials involved is patented, for it to be a lawful acquisition, it requires the patentee’s consent. The authority under the PPVFRA is mandated to assess every application for compliance with the provisions of the Act and how else will the authority assess compliance with this Section 18(1)(h) requirement but for an NOC or a letter or a copy of a license agreement, where the genetic material is patented? At best and giving the benefit of the doubt, I think the issue is a disputed one – there is no automatic conclusion that NOC is outside the statute.
Moreover, suppose a variety claims it contains a GM trait, but say the GM trait does not result in any morphological properties. The DUS trials conducted by the authority under the PPVFRA will not be able to assess the presence or absence of such a GM trait. Without a document from the provider of the genetic material, how else with the authority know if the variety comprises the genetic material or not? This point, of course, is limited to only GM traits that do not result in any morphological characters (i.e. those that can be observed with the naked eye)
On the GEAC front, it is important once again to assess why the NOC requirement was imposed. Most people think, as this article states, that the technology is just about taking a gene from a bacteria and introgressing it into a plant. This is fundamentally wrong. The gene that is introgressed is actually man-made. It is not what is taken from the bacteria. Second, the misconception also lies in stopping at the act of introgression. In reality, the position where it is introgressed is critical – this is called a specific ‘event’. Wrong positioning may have adverse results. What is approved by the GEAC is the ‘event’ – i.e. the man-made gene in question + the position where it is introgressed. It is only this that is tested and approved by the GEAC to be biosafe. Obviously, when subsequent follow-on plant varieties seek approval, the GEAC can only approve if it contains that approved event, i.e. the man-made gene in question + the position where it is introgressed. The question is how does the GEAC test this? To my understanding, GEAC believed that the technology provider is in the best place to determine this. What the article has failed to note is the fact that the NOC is coupled with what is called as a ‘Confirmation’ of event – the technology provider tests and confirms whether the new variety contains the approved event only and issues a ‘Letter of Confirmation’ or LOC to this effect. The NOC is just a ancillary to this.
It is also important to note that the issue of whether the NOC requirement can be imposed by the GEAC is subjudice before the Hyderabad high Court. The High Court had issued an interim order to allow applications to be processed without an NOC, but directed that no final approval will be granted till the disposal of the writ. The matter is pending final adjudication and clearly, there are policy issues involved in the NOC / LOC requirement. I dont think it is entirely accurate to dismiss the NOC / LOC requirement as such without debating these policy issues. After all, we are dealing with GM technologies.