Revocation of Pepsi’s Potato variety- FL 2027 by PVP&FRA Order dated: 3rd December 2021. – A cursory review (comments are requested from the readers as this blog is only a prepublication draft) Email: muralimanu@gmail.com PhNo.9449247549

1. In many ways the above order is path-breaking. If I am not mistaken, this is the first revocation of Plant Breeders Rights, that too owned by a market leader MNC in respect of a very popular potato snack. Around the world, the Pepsi Group of Companies is perceived to be a “generation next” Beverages/fast food company that sought to introduce the concept of wellness in their promotion of the health drinks market. The Plant Variety registration sought by one of the group companies of the Multinational PepsiCo was available in the Indian market way back in 1990. Originally, the applicant sought to obtain protection of this variety as a “New Variety”. Only when it is a ‘new variety’, would it have Monopoly Protection. Actually, during the prosecution of the application, apparently, because of their inability to establish ‘Novelty’, they converted the Application for Registration to Registration of “Extant Variety”, which would not have had monopoly rights protection. This will acknowledge the contribution of the applicant in the evolution, preservation and propagation of a variety that was a new variety some time ago. Even though the Registrar demanded a proof of production of Assignment deed from the Inventor, the Registrar did not diligently scrutinize the supporting documentation relied on by the Registered Breeder. Apparently, the Documentation submitted did not have witnesses and the document does not comply with the requirements of the Indian Stamp Act. The above Disclosure is an executive summary of the impugned order running to 79 pages. I went through it in a hurry because I wanted to be the first IPR academic/lawyer to comment on the legal aspects of the historic order passed at the initiative of a public-spirited individual committed to ensuring that the farmers’ rights are duly protected and no company can bulldoze farmers under the guise of protecting their IPR rights.

2. The following lines will focus more on the operative part of the order contained in pages 58 to 79. The learned Authority had framed the following issues for determining the case and had found them in favour of the revocation applicant.

a. Whether the revocation applicant is a person interested within the meaning of S.34 of PPV&FR Act 2001.

The chairperson has found that the revocation applicant is a person interested and therefore will have locus standi to demand revocation of the registered Plant Varieties. It is the correct conclusion and therefore, I am not commenting on it any further. As an academic, I record my appreciation to the Revocation Applicant who, at the end of a successful battle, did not get the customary Cost that a successful applicant should normally be entitled to. The entitlement for cost is even more legitimate when the Registered Owner has not complied with “Standard Due Diligence” and in fact was accused of “inequitable conduct”. But then it will be a side story!

3. The Chairperson had actually combined 2 independent issues into issue B, they are :

i. Whether Dr Robert W. Hoops is the breeder of the registered variety FL 2027.

 If so whether W. Hoops assigned it to the Assignee (Recot Incorporated). The learned Chairperson admits the declaration of the Registered Breeder that the variety was invented by Dr Robert W. Hoops and that he assigned it to Recot Inc. for $1 by an Assignment Deed dated 26^th September 2003.  However, the authority finds that the numerals ‘2027’ following the alphabets ’FL’ has been written in hand without any acknowledgement of the correction by the Original Signatory. Furthermore, the assignment deed does not have witnesses and the Chairperson finds that since it is not complying with the requirement of Section 35 of the Stamp Act. this document cannot be relied upon. In other words, he had taken a purely procedural ground to disbelieve the Deed of Assignment. However, as an Academic Lawyer having Global exposure I would say that the conclusion goes against the Standard Operating Procedures of a Global Company that demands scientists to assign their IPR to the companies that had contracted them. It is nothing unusual that the original assignees of the IPR usually transfer the right of application of IPR to their local subsidiaries operating in different parts of the world. Again, it would be too premature for a lawyer to comment on the conclusions of a statutory authority. All I wish is that there is more discussion on substantive legal aspects than reliance on mere procedural issues such as non-payment of stamp duty, absence of required number of witnesses and non-availability of signature or initials Authorising handwritten interpolations.
4. The third issue that the Authority had framed is whether is Recot Inc (assignee of FL 2027 from breeder) has changed its name to FLNA. On this issue, the chairperson had found the Registrar is guilty of oversight of nonfulfilling crucial documents required because this was produced by the Registered Breeder during the stage of revocation proceedings. On this ground, the Chairperson refused to consider the document dated 11.11.2004 as evidence of the change of name of Recot Inc to FLNA. Hence, he finds that the FLNA’s assignment to PepsiCo Holdings Private Ltd cannot be relied upon. As a lawyer, I find it difficult to accept that. Many times statutory authorities fail to appreciate that procedural non-compliances are curable provided they do not go to the root of the entitlement of the matter. This conclusion of the Authority again is too much Procedural and not Substantive.

5. The fourth issue relates to the validity of the Oral Assignment of FL-2027 from FLNA to the registered breeder being valid. Actually, there will be a bit of overlap between 2 and 3 and the present issue. The Chairperson finds that the combined reading of section 18 (3) of PPV&FR Act r/w Rule 27(2) stipulates that all supporting documentation relating to proof of ownership must be submitted within 6 months of the first application. But here, it was done much beyond the stipulated time. He concludes that the letter dated September 12 2019 whereby the original owner who developed the variety assigned it-first in an informal undertaking, then following it up with the formal assignment. Therefore, the Chairperson concludes the registered breeder in the Extant variety registration cannot be considered as the legal owner of the variety. Here again, the validity of an assignment relating to an intangible property generated abroad would have to be considered in the light of the law prevailing in the place where the IPR was first generated and thereafter to whom it was assigned (the place of registered office). Under U.S. Laws any inventions generated by an employee/consultant in the course of employment would normally vest with the person who sponsors the research. Expecting foreign companies to comply with a procedural requirement such as:

a. Number of witnesses

b. Payment of stamp duty

c. Corrections not having been initialled etc.

would introduce invisible and unreasonable barriers in access to justice for foreign investors. In my opinion, it does not address the basic question as to whether the registered breeder is entitled to registration under the Act either as a New Variety or as an Extant Variety on the ground of lack of Novelty.

6. The 6^th issue framed is whether under section 34 of the Act, the registration of FL2027 could be revoked. I would have thought that this power is evident in the Section itself. Instead, the learned Chairperson should have framed the issue as this, “whether the revocation applicant had complied with the conditions required under the Act for revocation of the various registrations granted under the Act.” In my opinion, the Authority by this order revokes the registration only because the registered breeder has not proved the existence of a valid assignment deed as required under the law. In fact, the Chairperson has not considered the following allegations made by the revocation applicant against the Registered Breeder.

a. The application was originally made for a new variety. Subsequently, this was modified to be an application for extant variety. This wrong declaration goes to the root of the matter, namely, breeders entitlement for registration.

b. On the date of application, the varieties in question were known in different parts of the world and hence it could not have qualified for registration as New Variety. Only new variety registered owners have monopolistic rights. The law does not give Extant Variety owners monopolistic rights.

c. The registered breeder had filed aggressive litigations against small farmers claiming intimidatory sums of damages; this is inequitable conduct on the part of the Registered Breeder which would result in the revocation of IPR(these words are not present on the summary of original pleadings but this argument can be successfully made based on the material available on record.

7. In fact the learned Chairperson refers to the other arguments of the revocation applicant relating to quarantine requirements and does not specifically rule whether these requirements are matters of strict compliance or merely a condonable illegality.

8. Finally the Chairperson finds that the Registrar who granted the registration had been superficial in accepting incomplete or obviously incorrect documents and by not insisting on strict compliance of the objection that was raised by the Registrar’s Office itself, during scrutiny stages. In our scheme of things, these observations will not even delay the next promotion of the Registrar!

9. It is said that a good judgement is one that will leave both parties equally satisfied and equally dissatisfied at the same time. This order falls in this category. It will make the Registered Breeder happy because the registration had been revoked, essentially on the failure to prove a valid assignment deed. If this is overcome, they have a chance of reversal of the order. The opposing applicant will be happy because her application had been upheld. But, she should be unhappy because she has not been awarded costs. The authority had also not addressed and pronounced on all the points she urged before the Authority. The question is whether any of them will appeal or both will appeal? Good money for lawyers, if there is an Appeal!!!