Monsanto Technology LLC thru the Authorized Representative Ms. Natalia Voruz v. Nuziveedu Seeds LTD. thru the Director (8 January 2019)

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The dispute in this appeal arises from the granting of injunctions and validity of patents.

Monsanto was an American agrochemical company based in Missouri. It was founded in 1901 and specialized in the production of pesticides and genetically modified products for plants. On 21st February 2004, Monsanto entered into a sublicensed agreement with Nuziveedu Seeds Ltd. for a period of ten years. The agreement entitled Nuziveedu Seeds Ltd. to develop “Genetically Modified Hybrid Cotton Planting Seeds” with the help of Monsanto’s technology and to commercially market the product. The agreement included the payment of a license fee by the defendants, for use of the technology. after extension, however, the agreement was eventually terminated by the plaintiffs on 14th November 2014 due to disputes arising out of the payment of license fee. Monsanto had in the agreement, described a larger fee than the actual statutory amount, and the defendant refused to it, and consequently paid the fees according to the statutory value. On account of this, the aforementioned agreement was terminated by Monsanto, and it proceeded to stop Nuziveedu Seeds from commercially profiting from the product by using their technology. Further, Monsanto decided to file for a Temporary Injunction, citing Order 39 Rule1 & Rule2 of the Code of Civil Procedure, to prohibit the defendants from using their Trademark “BOLGARD” and “BOLGARD II” violating the registered patent no. 214436 of the plaintiffs, and from benefiting from the sale of any items using their patented technology. Order 39, Rule 2 of the Code of Civil Procedure states that, In any suit for restraining the defendant from committing a breach of' contract or other injuries of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction. [1]

The defendants argued that their rights were protected by the Protection of Plant Varieties and Farmers' Rights Act, 2001, and further alleged that the patent was invalid on grounds of Section 3(j) of the Patents Act 2000. Use of Nucleic Acid Sequence (NAS) was made, which then was infused into the plant cell to help its develop pesticide like abilities, and thus, enhanced its yield. Nucleic Acid Sequence was a chemical composition incapable of reproducing itself and was thus not a micro-organism. Only on insertion into a plant, a living organism, it imparts Bt.trait (insect resistance) to the living organism.[2]

This was the basis of the defendant’s argument in which they moved seeking revocation of the granted patent to Monsanto citing a violation of Section 64 of the Patent Act.

The Learned Single Judge observed that this case was to be dealt with in a scientific manner requiring formal proof and expert opinions from those who are professionals in the field. It was also ruled that during the pendency of the suit, both the parties shall be bound by their obligations to the initial license agreement and that the fee payable by the defendant would be governed by the laws in force. The learned Single Judge did not consider the counterclaim for revocation of the patent by the defendants. This was then further appealed to the Divisional Bench of High Court, where it upheld the defendant’s dispute with respect to patents under Section 3(j) of the Act. Thus the counterclaim of the defendants which the learned Single Judge did not consider, succeeded. The plaintiffs then argued that the suit brought in by the defendants was to merely distract the court from the main issues surrounding the infringement of the patent and that the validity of the patent was never raised as the main issue of the dispute between the two parties. The plaintiffs also contended that a summary judgment was not fulfilling for the suit as it involved both questions of law and questions of fact and also required formal evidence.

Following arguments made by the respondents, the case went to the jurisdiction of the supreme court where it was ruled that issues involving patents should be attested by the Divisional Bench as a summary and hence, the order stood annulled. Such a suit could only be decided in an elaborate manner under Section 9 of the Code of Civil Procedure.

The Supreme Court then restored the Single Judge decision and left to it to decide the suit elaborately based on expert evidence and formal proof.