Monsanto, the U.S. agribusiness giant acquired by Bayer AG last year, won a legal battle to own patents on genetically-modified cotton seeds in the world’s biggest producer of the fiber.
India’s Supreme Court ruled on Tuesday that the company’s patent for Bt cotton seeds is valid, overturning a judgment by the Delhi High Court saying certain items such as seeds, plants and animals can’t be patented under Indian laws. The apex court’s two-judge bench, headed by Justice Rohinton F. Nariman, said a lower court will decide if Indian companies infringed Monsanto’s patent on Bt cotton seeds.
The verdict has far-reaching implications as it will boost foreign investors’ confidence about the validity of patents awarded to firms. Biotech companies may revive their expansion plans, which were put on hold following several restrictions imposed by the Indian government and local courts in the past years. It’s a boost for Monsanto, which faced the risk of losing significant revenues without a claim over exclusive rights and higher royalties in India.
"The division bench order has been overruled. It essentially means that the patent is in force," said a Bayer spokesman in India.
Legal Battle
The ruling is the result of years of legal battles between Monsanto and domestic seed companies, led by Nuziveedu Seeds Ltd. The Indian firm, one of the licensees of the U.S. company’s seeds in India, had petitioned in the court to cancel Monsanto’s patent. Monsanto had lodged counter cases for patent infringements by Indian companies.
Domestic seed companies, which get licenses from Monsanto to sell genetically-modified seeds, pay a ’trait fee’ fixed by the government. They had argued that the foreign player was not entitled to get any more money from them.
India cut the fee on Monsanto’s genetically-modified cotton seeds last year to 39 rupees ($0.56) per 450-gram pack from 49 rupees. About 50 million packs of genetically modified cotton seeds are produced each year in the country, according to the National Seed Association of India.