In the decision dated 9 January 2024[1], the Division Bench (Two-Judge Bench) of the Delhi High Court, while adjudicating cross-appeals, partly set aside the Single Judge’s order, dated 5 July 2023. The Single Judge had previously affirmed the PPVFR (Protection of Plant Varieties & Farmers' Rights) Authority’s order of revocation due to furnishing of incorrect information relating to the date of first commercial sale as well as the purported failure to present requisite information at the time of applying for registration, and adjudged PepsiCo’s registration in respect of plant variety FL 2027, dated 1 February 2016, to be valid and further directed the restoration of the renewal application filed by PepsiCo.
Facts
PepsiCo applied for registration of FL 2027 on 18 February 2011 describing it as a ‘new’ variety. The first commercial sale date was indicated as 17 December 2009. Further, an assignment deed dated 26 September 2003 (‘Assignment Deed’) was submitted which indicated that the original breeder, Dr. Robert Hoopes, has assigned all his rights with respect to subject plant variety to Recot Inc., a company incorporated in Delaware, USA.
On 9 June 2011, the Registrar sought certain corrections, documents, and information from PepsiCo. PepsiCo, in their letter dated 8 February 2012 communicated to the Registrar to treat the subject variety as ‘extant’ variety and submitted a revised application on 16 February 2012, wherein PepsiCo corrected the identity of the Applicant to ‘assignee of any of above’ but again chose to describe the subject variety as ‘new’ variety instead of ‘extant’ variety. It further maintained the first sale date as 17 December 2009, enclosed the Assignment Deed, and submitted the declarations from the original breeder, and Operations Director stating that the genetic or parental material for breeding, evolving, or developing the FL 2027 has been lawfully acquired. Based on the letter dated 14 June 2012, the Registrar communicated to PepsiCo that the subject variety will be considered under the ‘extant’ category and granted the certificate of registration for FL 2027 to PepsiCo on 1 February 2016.
A revocation action was filed by Ms. Kavitha Kuruganti, on 17 June 2019, under Section 34 of the Protection of Plant Varieties and Farmers Rights Act, 2001 (‘PPVFRA/Act’) alleging that the grant was obtained on incorrect information. During the revocation proceedings, Frito Lay North America (‘FLNA’), an affiliate of PepsiCo, filed a letter dated 12 September 2019 purporting to clarify that it had allowed PepsiCo to file the application for registration of FL 2027.
In an order dated 3 December 2021, the Authority proceeded to revoke the registration inter alia on the ground that the Assignment Deed was neither stamped in accordance with the Indian Stamp Act, 1899 nor has it been signed by the witness as required and that FLNA has not submitted any assignment in favor of PepsiCo. The Authority further held that the Registrar incorrectly examined the application and granted the registration under ‘extant’ category without requiring PepsiCo to amend its claim from ‘new’ to ‘extant’. Further, the Authority held that the oral assignment, and evidence in support of the change of name of Recot Inc. to FLNA was provided for the first time only during revocation proceedings. Therefore, based on the above observations, the Authority revoked the registration under Section 34 (a), (b), (c), and (h) of the PPVFRA.
The Authority’s order dated 3 December 2021 was appealed by PepsiCo which was heard by the Single Bench of the Delhi High Court. The Single Bench disagreed with PepsiCo’s submission and held that the date of first sale/exploitation is important and material information for the application and whether the relevancy of such date will affect the registration is immaterial. With respect to the purported failure of PepsiCo to provide requisite information in Form PV-2, the Single Bench observed that PepsiCo had filed Form PV-2 in blank and without the signatures of the breeder or FLNA and held that the Authority has rightly not relied on the letter dated 12 September 2019 submitted by FLNA to the Authority during the revocation proceedings as it was not in compliance with Form PV-2 and was submitted post the registration, and therefore, has rightly invoked the provision of Section 34(c)[2] of the Act. With respect to the issue of the Assignment Deed being insufficiently stamped, the Single Bench held that the Registrar had initially complied with the proviso to Section 20(2)[3] of the Act by providing PepsiCo with an opportunity to rectify the deficiencies in the application. Despite the opportunity being granted, PepsiCo filed an application not in conformity with the Act, the Rules, and the Regulations. Therefore, PepsiCo is suffering for its own mistakes and for its casual manner of making an application seeking registration. With respect to the ground of Section 34(h)[4] of the Act, the Single Bench observed that mere filing of litigations by PepsiCo against the farmers, even presuming it to be frivolous, cannot make the registration granted not in consonance with the public interest, and held the Authority has erred in revoking the registration under Section 34(h) of the Act.
Aggrieved by the judgment passed by the Single Bench upholding the revocation of FL 2027, PepsiCo appealed the judgment. Kavitha Kuruganti filed a cross appeal against the findings of the Single Bench with respect to the incorrect declaration of variety and Section 34(h) of the Act.
Analysis and findings of the Court
(a) The ‘new’ and ‘extant’ dispute
The principal issue that was considered by the Hon’ble Division Bench was the scope and intent underlying Section 34 of the Act and identifying the circumstances which would warrant the power of revocation being invoked. The Division Bench concurred with PepsiCo’s submissions that Section 34 of the Act cannot be exercised or attracted in the slightest infraction.
The Division Bench further observed that language of Section 34 used the expression ‘may, on the application in the prescribed manner of any person interested, be revoked…’, makes it pari materia to Section 64 of the Patents Act, 1970. The Bench relied upon the decision of another Division Bench of the Delhi High Court in Maj (Retd.) Sukesh Behl v. Koninklijke Phillips Electronics[5], wherein the Division Bench held that the compliance with the requirements of Section 8(1) of the Patents Act, 1970 is mandatory and non-compliance of the same is the ground of revocation under Section 64(1)(m) of the Patent Act, 1970, but use of the word ‘may’ in Section 64 of the Patents Act, 1970 indicates that power to exercise revocation under such provision is directory, and not automatic, and it is upon the discretion of the Authority/Court, thus, implying that the provision of Section 8(1) of the Patents Act, 1970 is not the determinative factor of revocation under Section 64(1) of the Patents Act, 1970.
The Division Bench observed that PepsiCo in its letter dated 8 February 2012 apprised the Authority that it was seeking registration of FL 2027 under the ‘extant’ category, and while applying for registration PepsiCo never claimed FL 2027 to be novel which is the principal distinctive feature for the determination of ‘new’ variety. Thus, the Division Bench concurred with the conclusion rendered by the Learned Single Judge that the registration of the application is not liable to be revoked based on the incorrect mentioning of the variety.
(b) Dispute regarding the date of first sale
The Division Bench opined that PepsiCo could not have derived any advantage by mentioning the incorrect date of the first sale/commercialization. The Bench held that mentioning of date of first sale whether computed with reference to commercialization in Chile or India did not impact the right of PepsiCo to apply for registration under the Act. Also, concurring with PepsiCo’s submission, the Division Bench observed that the protection of the variety provided under the Act flows from the date of registration and not from the date of first sale, thus, PepsiCo could not have derived any benefit. Section 2(j) of the Act refers to a variety ‘available in India’, the disclosures required in Form does not indicate the date of first sale being global or India specific. Referring to Section 15(3) of the Act, the Court observed that Section 15(3)(a)(ii) of the Act pertains only to ‘new’ variety since exploitation outside India is concerned with novelty, while Section 15(3)(b), (c), or (d) of the Act, which are relevant to ‘extant’ varieties does not uses the phrase ‘outside India’. Therefore, the Court held that PepsiCo made declarations with respect to first sale in accordance with the language of Section 2(j) of the Act.
(c) Section 16(1)(c) and its import
With respect to the issue regarding the rights claimed by PepsiCo and the extent of disclosures and declarations made in the application, the Bench observed that PepsiCo consistently took the position that its application for registration is founded on Section 16(1)(c) of the Act and not under Section 16(1)(e)[6] of the Act. Also, the application as submitted before the Registrar sought the grant in favor of PepsiCo and not in favor of FLNA. Dr Hoopes being the original breeder has not been disputed, and he had assigned all the rights with respect to the plant variety to Recot Inc. FLNA and PepsiCo are the affiliates and group entities of PepsiCo Inc. Therefore, the authorization by FLNA in favor of PepsiCo is to be construed in the aforesaid light. Section 16(1)(c) of the Act enables a person being assignee of the breeder to apply for registration. However, the said provision uses the expression ‘in respect of the right to make such application’ which signifies that it not only enables the assignee of the breeder but even one who may have been empowered by the assignee to make such an application. The Hon’ble Court further noted the distinction between clause (c) and (e) of Section 16(1) and stated that Section 16(1)(e) merely enables the applicant by virtue of an authorization to act as an agent of any of the category of persons failing withing the clauses (a) to (d) to prosecute and pursue an application before the Registrar. Such a person does not claim or seek registration in its favor. This position is further fortified in Section 18(3) of the Act which lays down the assignment of the right to apply for registration. This expands the field of persons rendered eligible to apply for registration beyond a mere assignee of the breeder to even one who has been assigned the right to apply for and seek registration in its own name. Rule 27[7] of the Protection of Plant Varieties and Farmers’ Rights Rules, 2003 read along with Section 18(3) of the Act speaks of appropriate disclosures to be made in the manner specified in Form PV-2. However, Form PV-2 does not make adequate provisions to cater to myriad contingencies where the original breeder becomes a party along with its assignee to apply for registration. Therefore, its restrictive nature had constrained PepsiCo to mention the name of the original breeder in the application form. Based on the above observations, the Bench held the letter dated 12th September 2019 by FLNA authorizing PepsiCo to be unambiguous to the extent of authorization and conferring of rights and that it clearly falls within the ambit of Section 16(1)(c) of the Act.
(d) Inherent contradiction
The Bench further accepted PepsiCo’s submissions that the findings of Ld. Single Judge with respect to ‘new’ and ‘extant’ variety and with respect to the first sale of FL 2027 is contradictory and held that once the Ld. Single Judge had admitted the position with respect to the issues of incorrect mention of variety on the anvil of eligibility to seek registration, the same position should have been taken by the Ld. Single Judge with respect to the issue of mentioning incorrect date of first sale as PepsiCo’s application does not fall foul of statutory time frame as construed in Rule 22(2)(a) of the Act, irrespective of whether the time period is computed from date of first sale in Chile or in India. The power of revocation comprised in Section 34 of the Act cannot be invoked in situations which may have no impact on the eligibility of the Applicant to apply for application or on the eligibility of the application for registration. Mandating such exercise of provision is arbitrary and illogical as such factor has no material bearing on the ultimate grant and fails to meet the tests of fundamental ineligibility and invalidity. Thus, the Hon’ble Court held that PepsiCo’s application or the ultimate grant does not suffer from fundamental misdeclaration or failure to provide information as required by the provisions of the Act, read along with the Rules.
(e) Section 39(1)(iv) and public interest
With respect to the ground raised under Section 34(h) of the Act, the Division Bench held that Counsel on behalf of Ms. Kavitha Kuruganti failed to establish that the suits filed by PepsiCo against the farmers were vexatious in nature. Therefore, as per the Court the application is not liable to be revoked under Section 34(h) of the Act. The Bench thus directed that the renewal application filed by PepsiCo stands restored and directed the Registrar of PPVFR Authority to dispose of the same in accordance with the law and the findings of the Bench.
Conclusion
In the instant matter, the Division Bench essentially held that procedural infirmities, which have no impact on the eligibility of the Applicant to apply for a plant variety application or on the eligibility of the application for registration, to be not fatal to the registration unless such infirmities are due to willful misrepresentation or to gain any undue advantage. This view is consistent with the general judicial trend to consider procedural lapses or infirmities based on its impact on the substantive merits of the matter.
[The authors are Associate and Partner, respectively, in IPR practice at Lakshmikumaran & Sridharan Attorneys]
[1] Pepsico India Holdings Pvt. Ltd. v. Kavitha Kuruganti, 2024 SCC OnLine Del 153
[2] 34. Revocation of protection on certain grounds. —
Subject to the provisions contained in this Act, the protection granted to a breeder in respect of a variety may, on the application in the prescribed manner of any person interested, be revoked by the Authority on any of the following grounds, namely: —
(c) that the breeder did not provide the Registrar with such information, documents or material as required for registration under this Act;
[3] 20. Acceptance of application or amendment thereof. - (2) Where the Registrar is satisfied that the application does not comply with the requirements of this Act or any rules or regulations made thereunder, he may, either—
(a) require the applicant to amend the application to his satisfaction; or
(b) reject the application:
Provided that no application shall be rejected unless the applicant has been given a reasonable opportunity of presenting his case.
[4] 34. Revocation of protection on certain grounds. —
Subject to the provisions contained in this Act, the protection granted to a breeder in respect of a variety may, on the application in the prescribed manner of any person interested, be revoked by the Authority on any of the following grounds, namely: —
(h) that the grant of the certificate of registration is not in the public interest
[5] 2014 SCC OnLine Del 2313
[6] 16. Persons who may make application. —(1) An application for registration under section 14 shall be made by—
(e) any person authorised in the prescribed manner by a person specified under clauses (a) to (d) to make application on his behalf
[7] 27. Proof of the right of making application under sub-section (3) of section 18.-
(1) Where an application for registration is made by the successor or assignee of the breeder under sub-section (3) of section 18, he shall furnish documentary proof, at the time of making such application or within six months of making such an application, as to the right to make such an application for registration.
(2) The documentary proof, in case of an assignment, shall be furnished in the manner specified in Form PV-2, given in the First Schedule and in case of succession, or a succession certificate or any other document in support of succession proving the applicant to be the successor shall be furnished.
