Currently Bio-technology is a flourishing industry and has immense potential for innovation in several paramount human activities, such as health, agricultural and foods. Intellectual Property protection and in particular Patents turn out to be a great incentive for the bio-tech companies to invest heavily in their R & D.

Patentable biotechnology inventions all over the world involve products such as nucleotide and amino acid sequences, microorganisms, processes or methods for modifying said products, uses for the manufacture of medicaments and so on and so forth. The patentability requirements as per the Indian Patent Act, 1970 are of novelty, inventive step and industrial application. Additionally, even after qualifying the above mentioned statutory requirements, a biotech invention must constitute patent-eligible subject matter. The non-patentable subject matters for biotech inventions are provided under Sections 3(b), (c), (d), (e), (h), (i), (j) and (p) of the Act. There is a dearth of case laws in the field of bio-technology for defining the extent of these sub-sections.

The series of events that led to this landmark judgment were actually initiated by a license agreement. Monsanto, a US based company entered into an agreement with Nuziveedu Seeds through MMBL (Mahyco Monsanto Biotech Ltd), a joint venture for providing 50 grams of Transgenic Bt Cotton seeds in exchange for 50 lakhs along with recurring trait value as compensation in 2004 for a period of ten years, which was subsequently extended. However, in 2015, the Government revised its policies for the price regulation of Cotton seeds. Subsequently, Nuziveedu Seeds called upon Monsanto to modify the agreement to comply with the Government policy. However, Monsanto responded by terminating the sub-license agreement. The Learned Single Judge of Delhi High Court reinstated the sub-licence that was terminated by Monsanto, stating that the termination was not valid under Section 23 of the Indian Contracts Act and Cotton Seeds Price (Control) Order, 2015. It also gave permission to Nuziveedu Seeds and other Indian companies to continue using the patented technology till the suit is disposed. However, it also stated that the trait fee must be paid in accordance with the Government set rates.

While rejecting the contentions of Nuziveedu Seeds for patent validity, the Learned Single Judge opined that with the insertion of Section 3(j) of the Patents Act and repeal of Section 5 confers patentee of due reward of human skill and ingenuity resulting in human intervention and innovations over and above what occurs in nature. The suit patent which claims a nucleotide sequence encoding a Cry2Ab Bacillus thuringiesis and insertion of said nucleic acid sequence in plant cell thereby making it insect resistant, the Learned Judge stated that the same involved laboratory processes and are not naturally occurring substances which only are to be excluded from the purview of what is an invention by virtue of the provision contained in Section 3(j). Further, considering that both product and process claims can be patentable post amendment of the Patent Act in 2005, the Learned Single Judge ruled that the present invention relating to products or processes of biotechnology has been rightly entertained by the Indian Patent office.

The next contention of the defendant was primarily based on the argument that the claimed invention lies in the ambit of Plant Variety Act and any new variety created is registrable under Section 15 of the Plant Varieties Act. The question arose whether the Bt trait as claimed in the patent was covered by the definition of “variety” under Section 2(za) of Plant Varieties Act wherein it has been defined to include a non-transgenic variety or a transgenic variety. However, the Learned Judge relied on the explanatory notes under the 1991 Act of International Convention for the Protection of New Varieties of Plants (UPOV Convention 1991), as adopted by the UPOV Council, wherein the definition of the expression “variety” excludes trait and highlights that the disease resistant trait or a chemical or other substance like DNA are not meant to be covered within the meaning of the expression “variety”, the development of which is protected by the Plant Varieties Act. Based on the preceding observation, the Learned Single Judge dismissed the contention of the plaintiff.

Both Monsanto and Nuziveedu seeds appealed to the Division Bench of Delhi High Court against the order of Single Judge.

The Division bench of Justice Ravindra Bhatt and Justice Yogesh Khanna analyzed that the insertion of Section 3 (j) which excludes “plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals” and the concurrent enactment of the Plant Varieties Act according to the Division Bench meant that the Parliament intended not to afford intellectual property protection in the form of patents to biological processes as well as plants per se.

The Hon’ble Division Bench also took note of the fact that the term „Micro-organism‟ has not been defined in the Patents Act, 1970 or the Plant Variety Act, and relied on the dictionary definition for the term „Micro-organism‟. Noting that the subject patent discloses that the nucleic acid sequence which is the invention in question (the Cry2AB gene) has no existence of its own, and hence could not be considered “microorganisms” and consequently excluded from the exclusion clause in Section 3 (j). According to the Hon’ble Division bench, the trait, by itself has no intrinsic worth and without expressing it on the plant cell, they are inert and inanimate. The utility of the nucleotide sequence is when they are introduced to a plant cell and such seed is further hybridized to produce the Bt. Cotton hybrid plants as well as seeds thereafter are squarely exempted under Section 3(j) of the Patents Act. Further, the Hon’ble Division bench while interpreting the term „essentially biological processes‟ by drawing a parlance with the definition provided in Article 53(b) of the European Patent Convention (“EPC”) observed that any future propagation of the transgenic plants (after introgression and hybridization) and subsequent transfer of the Bt Trait in such plants/seeds, will be a process of nature, and no step of human intervention can impede such transfer of the sequence. For these reasons, it was held that the concerned nucleotide sequence over which Monsanto has patent rights as well as process is unpatentable by reason of Section 3 (j) of the Patents Act.

The Hon’ble Division Bench also observed that considering the argument of Monsanto that the subject matter of the patent in question is a microorganism, Monsanto was obligated by virtue of Section 10 (4) (d) (ii) of the Patents Act to deposit the micro-organisms before a recognized International Depository Authorities (IDA) in terms of Article-7 of the Budapest Treaty 12

The nature of Section 10 (4) (d) (ii) is mandatory and where a patent application is for a microorganism which is not fully described and is unavailable to the public, the filing of such application in India is subject to deposition of the microorganism before the IDA. However, Monsanto nowhere states that in terms of Section 10(4), the biological material was deposited with an IDA. Consequently, Monsanto failed to discharge the pre-condition for filing the application as per the Indian Patents Act.

Keeping in mind the aforementioned grounds, the Hon’ble Division bench held that Monsanto’s patent was not valid under Section 3(j) of the Patents Act, 1970 and also, upheld the Single Judge’s order that the license is not terminated and in order to safe guard its Intellectual Property gave Monsanto three months to apply under the Plant Variety Act.

The matter was then preferred for appeal before the Supreme Court. The Bench of the Apex Court comprised of Hon’ble Justice Rohinton Fali Nariman and Hon’ble Justice Navin Sinha.

The counsels for the Plaintiff primarily contended that there was no reason why the Plaintiffs would have consented to a summary adjudication of their patent and risk losing the same without any merit adjudication and also pointed out the fact that the Defendants had themselves admitted it in their appeal that the issues were complicated requiring expert evidence to be considered in a full-fledged trial. On the contrary, the Defendants continued questioning the grant of the subject patent under the Patents Act and argued that the claims 25-27 are product claims which are essentially biological process claims and thus, excluded under Section 3(j) of the Act. The interveners argued on the ground that the nucleic acid sequence for which protection is sought is not capable of industrial application unless it becomes a part of the plant cell where it is expressed by the plant cell through essentially biological processes to produce the desired protein.

Based on the arguments presented, the Hon’ble Supreme Court was of the view that such issues require full-fledged trial considering the technicalities involved and its huge impact on the number of pending patent application pertaining to biotech inventions.

The Hon’ble Supreme Court confirmed and upheld the findings of the Ld. Single Judge and affirmed with the contention of the Plaintiffs that the Division Bench ought to have confined itself to examination of the validity of the order of injunction granted by the Ld. Single Judge. The Hon’ble Supreme Court further refuted from remanding the matter to the Division Bench. The suit has accordingly been remanded to the learned Single Judge for disposal in accordance with law.

In intricate and technical matters, the courts must infer from taking a prima facie view with respect to such issues which require immense expertise and/or cogent evidence.

The Single Judge in trial court had rightly kept silent on the issue of validity of the patent stating in his ruling that such complex issues need to be decided only after trial. The holding of the Single Judge has been held to be correct by the Supreme Court which is purportedly in the best interests of Monsanto as well as the bio technology world. Even the noting of the Division Bench with respect to validity of the Patent seemed incorrect as it was held, among other points, that the Patent was not granted for a product or a method but for an identification of the event. Also it needs to be stated that while the court declared the subject patent to be non-patentable under Section 3(j) of the Act as it was essentially biological process, however, the court did not take into account that the claim of the Patent is limited to a selected genetic sequence as inserted into a plant genome which requires human intervention and cannot be said to be essentially biological process, as per the definition given by the court itself.

Hence, the ruling of the Division Bench was set aside by the apex court and the decision of the single judge has been upheld. The fate of the parties now rests in the trial court before the single judge as the matter has now been remanded back to single judge for full- fledged trial and respective parties have been directed to fully co-operate for expeditious trial of the suit as the question involved therein is an important question and needs precedential value based on valid, just and expert reasoning. The outcome of this litigation battle is awaited as it will bring clarity over pertinent questions of patentability of inventions in the field of biotechnology as raised during the course of arguments by the parties.