PepsiCo pulls back. Company withdraws lawsuit filed against Gujarat farmers over "patent-infringement"

May 03, 2019:

On Friday, Snacks and beverages maker PepsiCo India Holdings Pvt Ltd has decided to withdraw lawsuits it had filed against nine Gujarat farmers for allegedly growing a potato variety owned by the company without its permission.

The company had registered cases of infringement of proprietary rights against four farmers in April 5 and five in 2018, demanding ₹1 crore from each in damages. Pepsico, one of the world’s largest multinational corporations, had to face widespread backlash from farmers for bringing the lawsuits. Its legal action had sparked outrage among farm activists.

The company had claimed that the farmers had grown potatoes of a variety known as FL2027, which it had developed and registered as a protected strain under the Protection of Plant Varieties and Farmers’ Rights Authority.

The Gujarat Government was involved in talks between farmer groups and the company to settle the matter. “After discussions with the government, the company has agreed to withdraw cases against farmers,” Pepsico said in a statement Thursday.

The company had pressed charges of infringement of its exclusive rights over the seed variety, which it uses in Lay’s crisps, under Sections 28 and 64 of The Protection of Plant Variety and Farmers Right Act, 2001.

Farm activists however claimed that Section 39 of the Act allows Indian farmers to freely grow, use or sell a proprietary or a protected variety of seed as long as they don’t sell it as a “branded” item.

“Pepsico had wrongfully charged the farmers because the same Act gives farmers the freedom to use or grow protected seeds. The Indian legal system governing agricultural innovations offers farmers full freedom, unlike in the US,” said Kapil Shah of Jatan Trust, a farm organisation that was involved in defending the farmers.

PepsiCo introduced this variety of potato, which is sourced from its US arm, for commercial use in 2009. The low moisture content of the variety makes it ideal for processing.

“We are relying on the said discussions to find a long term and an amicable resolution of all issues around seed protection. The company remains deeply committed to the thousands of farmers we work with across the country and towards ensuring adoption of best farming practices,” the company’s statement said.

Over 200 farmer organisations, civil society representatives and activists had opposed PepsiCo’s move before the government. Several farmer organisations affiliated across the political spectrum, including the Rashtriya Swayamsevak Sangh-affiliated Bharatiya Kisan Sangh, had vowed to fiercely resist PepsiCo’s legal action.

The company had entered into exclusive buyback arrangements with farmers in India, including in north Gujarat. In its infringement suit, PepsiCo claimed that some farmers were growing and selling their variety without any licence or agreement with them, thereby hurting the firm’s commercial interests.

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