MONSANTO TECHNOLOGY LLC VS. NUZIVEEDU SEEDS LTD. & ORS.

2019 SCC Online SC25

FACTS:

Monsanto had licensed its Bollgard Technology to Indian seed companies, including Nuziveedue for an initial period of ten years.

Under the license agreement, these companies were supposed to sell certain seeds and pay a contractually- agreed trait value/ license fee to Monsanto for use of the patented technology. The agreement after extension was finally terminated by Monsanto on 14.11.2015 due to disputes regarding payment of licence fee/ trait value in view of the subsequent price control regime introduced by the State.

Thereafter Monsanto filed an application for injunction under Order 39, Rule 1 and 2 of CPC to restrain Nuziveedue and others from using their trademark in violation of the registered patent during the pendency of the suit in view of the termination of the agreement.

During the pendency of the proceedings the Defendants filed a counter claim seeking revocation of patent alleging that their rights were protected under the Protection of Plant Varieties and Farmers Rights Act, 2011. The Single judge of the Delhi High Court without getting into the validity of the Patent, in view of the counter claim at interim stage, held Monsanto’s termination of the contract illegal and allowed Nuziveedue and the others to continue using the technology provided that trait value/ licence fee was paid till the suit was finally disposed of.

Aggrieved, both Monsanto and the Defendants preferred appeals before the Division Bench of Delhi High Court. The Division Bench by way of its judgement dated April 11, 2018 dismissed Monsanto’s claim and revoked the patent and in particular held as follows:

“98…transgenic plants with the integrated Bt. Trait, produced by hybridisation (that qualifies as an “essentially biological process” as concluded above) are excluded from patentability within the purview of Section 3(j) and Monsanto cannot assert rights over the gene that has thus been integrated into the generations of transgenic plants.”

This judgement was challenged by Monsanto before the Supreme Court.

ISSUES

The Supreme Court based it’s judgement on the following two issues:

1. Whether Monsanto had consented to a summary adjudication regarding the validation of its patent; and
2. Whether the Division Bench was correct in invalidation the patent without a trial

 HELD

1. Monsanto had never consented to a summary adjudication regarding the validity of its patent. The consent referred to by the Division Bench, had been given only to decided whether the Plaintiff’s patent had been infringed or not, as also the scope of the patent, so as to allow or disallow the relief of injunction. It is incomprehensible that Monsanto holding a valid registered Patent under the Act nonetheless would have agreed to a summary consideration and validation/ invalidation of the patent.
2. With respect to second issue the Supreme Court observed that the Division Bench had erred by going into the complex issues of facts without the benefit of expert evidence through a trial. The Court thus held:

“The Division Bench ought not to have examined the counter claim itself usurping the jurisdiction of the Single Judge to decide unpatentability of the process claims 1-24 also in the summary manner done. Summary adjudication of a technically complex suit requiring expert evidence also, at the stage of injunction in the manner done, was certainly neither desirable or permissible in the law. The suit involved complicated mixed questions of law and facts with regard to patentability and exclusion of patent which could be examined in the suit on the basis of evidence.”

Section 64 of the Patents Act provides for the revocation of a patent based on a counter- claim in a suit. It presupposes a valid consideration of the claims in the suit. Therefore, the counter- claim cannot be adjudicated summarily without recording the evidence of all the parties, as was erroneously done by the Division Bench.