Case Name: The PepsiCo. Vs. Gujarat Potato Farmers Dispute(2019)
Citation: No formal citation (suits withdrawn before adjudication)
Court: Commercial Court of the City Civil Court, Ahmedabad; District Court, Modasa (Sabarkantha); District Courts in Aravalli, Deesa, and Banaskantha — Gujarat (2019)
Coram / Judges: Judge Moolchand Tyagi (ex parte order, 8 April 2019, Ahmedabad Commercial Court); suits formally withdrawn 10 May 2019; no final merits judgment delivered
ABSTRACT
Back in April 2019, PepsiCo India Holdings Pvt. Ltd. Initiated infringement suits against nine potato growers in Gujarat under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act) claiming its breeders’ rights against a protected plant variety, FL 2027 (FC-5 for marketing, used in making Lay’s chips) in India. These had been the first set of such proceedings and highlighted several issues such as the nature of breeder’s rights (Sections 28, 64, 65 of PPVFR Act), the scope of the farmer’s privilege (Section 39(1)(iv) of the PPVFR Act) and the bar on patents over plant varieties (Section 3(j) of the Patents Act, 1970).
Following protests from across the nation and a request from the government, PepsiCo withdrew all nine suits within six weeks. The controversy later metamorphosed into a PVP revocation proceeding at the PPVFR Authority which had cancelled PepsiCo’s PVP certificate on December 2021 – the matter which is currently under challenge before Delhi High Court.
INTRODUCTION
India’s 100 million smallholder farm households treat the seed not merely as an agricultural input but as the foundation of rural livelihood and food sovereignty. The PPVFR Act, 2001 established a sui generis framework balancing plant breeders’ rights with farmers’ traditional seed-saving practices. For nearly two decades, the statute remained judicially untested. That changed on 5th April 2019, when PepsiCo India Holdings Pvt. Ltd. sued nine Gujarat potato farmers for allegedly cultivating its registered variety, FL 2027, without authorisation. The episode ended with withdrawal within weeks which exposed deep fault lines in India’s plant variety protection regime and forced a long-overdue reckoning with the limits of corporate breeders’ rights .
FACTS
PepsiCo India Holdings Pvt. Ltd. (PIH) developed the FL 2027 potato variety, a hybrid of FL 1867 and Wischip varieties. It was commercially introduced in India in 2009. Possessing approximately 80% moisture content and high dry matter, it was ideal for chip manufacturing. PIH applied for registration on 2nd February 2012, and the Plant Variety Registry granted a PVP Certificate in 2016 for 15 years (until 2031). PIH operated a buyback contract farming model, primarily in Punjab, requiring contracted farmers to sell their entire produce exclusively to the company.
In January 2019, PIH discovered that nine Gujarat farmers outside its contractual network were allegedly cultivating FL 2027. DNA testing of samples reportedly confirmed a match. PIH filed suits on 5th April 2019 before courts in Ahmedabad and Modasa, seeking injunctions and damages ranging from Rs. 1–2 crores per farmer. Judge Moolchand Tyagi granted an ex parte injunction on 8th April 2019. Amid nationwide protests and government intervention, PIH withdrew all suits on 10th May 2019.
ISSUES
1. Whether cultivating and selling the harvested product (instead of “branded seed”) of a PPVFR registered variety, of a non-contracting farmer, results in infringement under sections 64 & 65 of the PPVFR Act, 2001.
2. Whether non-contracting farmers may be entitled to protection under Section 39(1)(iv) of the PPVFR Act which allows farmers to save, use, sow, resow, exchange, share or sell his farm produce of a variety protected under the Act and to the sale of branded seed thereof.
3. Whether a company can claim valid registration as a “breeder” of a “new variety” under PPVFR Act when the variety was already under commercial circulation within India prior to the application of registration.
4. Whether a plant variety is patentable in India and in the event, it is not patentable, what is the exact nature and ambit of the protection afforded to the certificate of PVP under PPVFR Act.
REASONING
As the suits were withdrawn before adjudication, no judgment on merits was delivered. PIH relied on Section 28 of the PPVFR Act, conferring exclusive breeders’ rights to produce, sell, and distribute the registered variety and Sections 64–65 for injunctive relief and damages. The farmers invoked Section 39(1)(iv), the ‘farmer’s privilege,’ permitting them to save, use, and sell farm produce of a protected variety, with the sole restriction being against selling ‘branded seed.’ The critical unresolved question was whether the farmers sold ‘farm produce’ or ‘seed.’ Additionally, Section 3(j) of the Patents Act, 1970 bars plant variety patents entirely PIH’s rights arose exclusively under the PPVFR Act’s sui generis regime.
CRITIQUE
The dispute exposes three deficiencies in India’s plant variety protection framework. First, the PPVFR Act’s failure to precisely define ‘branded seed’ creates dangerous ambiguity at the farmer’s privilege boundary, leaving smallholder farmers who routinely source seeds through informal grey markets with no practical means of identifying registered varieties. Second, PIH’s delayed enforcement filing suits in 2019 despite the variety circulating since 2009 drew censure from the PPVFR Authority, which later found PIH may not have been a validly registered breeder when the suits were filed. Third, and most procedurally troubling, the Ahmedabad Commercial Court granted an ex parte mid-season injunction without requiring PIH to demonstrate why prior notice to the farmers was impractical. Given that the farmers possessed a prima facie Section 39(1)(iv) defence and faced immediate livelihood consequences, the court ought to have demanded stronger justification before restraining cultivation without a hearing a procedural justice question entirely distinct from the substantive merits.
IMPACT
Though unresolved on merits, the dispute triggered the first invocation of the PPVFR Act’s revocation mechanism. Activist Kavitha Kuruganti’s petition led the PPVFR Authority to cancel PIH’s PVP certificate on 3rd December 2021. PIH’s appeal was dismissed by the Delhi High Court Single Bench on 5th July 2023, but restored by a Division Bench on 9th January 2024. The case also catalysed policy debates on contract farming protections, breeder disclosure obligations, and the legislative clarification of farmer’s privilege becoming a landmark reference in TRIPS-compliant plant variety jurisprudence.
CONCLUSION
PepsiCo India Holdings Pvt. Ltd. v. Gujarat Potato Farmers (2019) is landmark not for any judgment delivered but for the legal questions it surfaced and institutional responses it triggered. It exposed an unresolved tension at the PPVFR Act’s core, whether a statute designed simultaneously to protect breeders and farmers can serve both without compromising either. Until Section 39(1)(iv) is legislatively clarified and stricter breeder disclosure standards are imposed, corporate plant breeders’ rights will continue colliding with smallholder farming practices.
REFERENCES
The Protection of Plant Varieties and Farmers’ Rights Act, 2001 — Sections 28, 39(1)(iv), 64, 65
The Patents Act, 1970 — Section 3(j)
PepsiCo India Holdings Pvt. Ltd. v. Gujarat Potato Farmers — Commercial Court, City Civil Court, Ahmedabad & District Court, Modasa (April–May 2019) (suits withdrawn; no merits judgment)
PepsiCo India Holdings Pvt. Ltd. v. Kavitha Kuruganti — Delhi High Court, Single Bench (5 July 2023) (appeal dismissed)
PepsiCo India Holdings Pvt. Ltd. v. Kavitha Kuruganti — Delhi High Court, Division Bench (9 January 2024) (Single Bench order set aside; registration restored)
PPVFR Authority Revocation Order — 3 December 2021 (PVP certificate of FL 2027 cancelled)
Parna Mukherjee & Urmil Shah, ‘The PepsiCo Dispute: A Case of David Versus Goliath?’, SSRN (2020) — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3552452
PepsiCo Sues Gujarat Farmers for Growing Potato Variety Used in Lays’, Live Law (26 April 2019) — https://www.livelaw.in
The PepsiCo vs. Gujarat Potato Farmers Dispute
Khushi Jain
Asian Law College
Case Name: The PepsiCo. Vs. Gujarat Potato Farmers Dispute(2019)
Citation: No formal citation (suits withdrawn before adjudication)
Court: Commercial Court of the City Civil Court, Ahmedabad; District Court, Modasa (Sabarkantha); District Courts in Aravalli, Deesa, and Banaskantha — Gujarat (2019)
Coram / Judges: Judge Moolchand Tyagi (ex parte order, 8 April 2019, Ahmedabad Commercial Court); suits formally withdrawn 10 May 2019; no final merits judgment delivered
ABSTRACT
Back in April 2019, PepsiCo India Holdings Pvt. Ltd. Initiated infringement suits against nine potato growers in Gujarat under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act) claiming its breeders’ rights against a protected plant variety, FL 2027 (FC-5 for marketing, used in making Lay’s chips) in India. These had been the first set of such proceedings and highlighted several issues such as the nature of breeder’s rights (Sections 28, 64, 65 of PPVFR Act), the scope of the farmer’s privilege (Section 39(1)(iv) of the PPVFR Act) and the bar on patents over plant varieties (Section 3(j) of the Patents Act, 1970).
Following protests from across the nation and a request from the government, PepsiCo withdrew all nine suits within six weeks. The controversy later metamorphosed into a PVP revocation proceeding at the PPVFR Authority which had cancelled PepsiCo’s PVP certificate on December 2021 – the matter which is currently under challenge before Delhi High Court.
INTRODUCTION
India’s 100 million smallholder farm households treat the seed not merely as an agricultural input but as the foundation of rural livelihood and food sovereignty. The PPVFR Act, 2001 established a sui generis framework balancing plant breeders’ rights with farmers’ traditional seed-saving practices. For nearly two decades, the statute remained judicially untested. That changed on 5th April 2019, when PepsiCo India Holdings Pvt. Ltd. sued nine Gujarat potato farmers for allegedly cultivating its registered variety, FL 2027, without authorisation. The episode ended with withdrawal within weeks which exposed deep fault lines in India’s plant variety protection regime and forced a long-overdue reckoning with the limits of corporate breeders’ rights .
FACTS
PepsiCo India Holdings Pvt. Ltd. (PIH) developed the FL 2027 potato variety, a hybrid of FL 1867 and Wischip varieties. It was commercially introduced in India in 2009. Possessing approximately 80% moisture content and high dry matter, it was ideal for chip manufacturing. PIH applied for registration on 2nd February 2012, and the Plant Variety Registry granted a PVP Certificate in 2016 for 15 years (until 2031). PIH operated a buyback contract farming model, primarily in Punjab, requiring contracted farmers to sell their entire produce exclusively to the company.
In January 2019, PIH discovered that nine Gujarat farmers outside its contractual network were allegedly cultivating FL 2027. DNA testing of samples reportedly confirmed a match. PIH filed suits on 5th April 2019 before courts in Ahmedabad and Modasa, seeking injunctions and damages ranging from Rs. 1–2 crores per farmer. Judge Moolchand Tyagi granted an ex parte injunction on 8th April 2019. Amid nationwide protests and government intervention, PIH withdrew all suits on 10th May 2019.
ISSUES
1. Whether cultivating and selling the harvested product (instead of “branded seed”) of a PPVFR registered variety, of a non-contracting farmer, results in infringement under sections 64 & 65 of the PPVFR Act, 2001.
2. Whether non-contracting farmers may be entitled to protection under Section 39(1)(iv) of the PPVFR Act which allows farmers to save, use, sow, resow, exchange, share or sell his farm produce of a variety protected under the Act and to the sale of branded seed thereof.
3. Whether a company can claim valid registration as a “breeder” of a “new variety” under PPVFR Act when the variety was already under commercial circulation within India prior to the application of registration.
4. Whether a plant variety is patentable in India and in the event, it is not patentable, what is the exact nature and ambit of the protection afforded to the certificate of PVP under PPVFR Act.
REASONING
As the suits were withdrawn before adjudication, no judgment on merits was delivered. PIH relied on Section 28 of the PPVFR Act, conferring exclusive breeders’ rights to produce, sell, and distribute the registered variety and Sections 64–65 for injunctive relief and damages. The farmers invoked Section 39(1)(iv), the ‘farmer’s privilege,’ permitting them to save, use, and sell farm produce of a protected variety, with the sole restriction being against selling ‘branded seed.’ The critical unresolved question was whether the farmers sold ‘farm produce’ or ‘seed.’ Additionally, Section 3(j) of the Patents Act, 1970 bars plant variety patents entirely PIH’s rights arose exclusively under the PPVFR Act’s sui generis regime.
CRITIQUE
The dispute exposes three deficiencies in India’s plant variety protection framework. First, the PPVFR Act’s failure to precisely define ‘branded seed’ creates dangerous ambiguity at the farmer’s privilege boundary, leaving smallholder farmers who routinely source seeds through informal grey markets with no practical means of identifying registered varieties. Second, PIH’s delayed enforcement filing suits in 2019 despite the variety circulating since 2009 drew censure from the PPVFR Authority, which later found PIH may not have been a validly registered breeder when the suits were filed. Third, and most procedurally troubling, the Ahmedabad Commercial Court granted an ex parte mid-season injunction without requiring PIH to demonstrate why prior notice to the farmers was impractical. Given that the farmers possessed a prima facie Section 39(1)(iv) defence and faced immediate livelihood consequences, the court ought to have demanded stronger justification before restraining cultivation without a hearing a procedural justice question entirely distinct from the substantive merits.
IMPACT
Though unresolved on merits, the dispute triggered the first invocation of the PPVFR Act’s revocation mechanism. Activist Kavitha Kuruganti’s petition led the PPVFR Authority to cancel PIH’s PVP certificate on 3rd December 2021. PIH’s appeal was dismissed by the Delhi High Court Single Bench on 5th July 2023, but restored by a Division Bench on 9th January 2024. The case also catalysed policy debates on contract farming protections, breeder disclosure obligations, and the legislative clarification of farmer’s privilege becoming a landmark reference in TRIPS-compliant plant variety jurisprudence.
CONCLUSION
PepsiCo India Holdings Pvt. Ltd. v. Gujarat Potato Farmers (2019) is landmark not for any judgment delivered but for the legal questions it surfaced and institutional responses it triggered. It exposed an unresolved tension at the PPVFR Act’s core, whether a statute designed simultaneously to protect breeders and farmers can serve both without compromising either. Until Section 39(1)(iv) is legislatively clarified and stricter breeder disclosure standards are imposed, corporate plant breeders’ rights will continue colliding with smallholder farming practices.
REFERENCES
The Protection of Plant Varieties and Farmers’ Rights Act, 2001 — Sections 28, 39(1)(iv), 64, 65
The Patents Act, 1970 — Section 3(j)
PepsiCo India Holdings Pvt. Ltd. v. Gujarat Potato Farmers — Commercial Court, City Civil Court, Ahmedabad & District Court, Modasa (April–May 2019) (suits withdrawn; no merits judgment)
PepsiCo India Holdings Pvt. Ltd. v. Kavitha Kuruganti — Delhi High Court, Single Bench (5 July 2023) (appeal dismissed)
PepsiCo India Holdings Pvt. Ltd. v. Kavitha Kuruganti — Delhi High Court, Division Bench (9 January 2024) (Single Bench order set aside; registration restored)
PPVFR Authority Revocation Order — 3 December 2021 (PVP certificate of FL 2027 cancelled)
Parna Mukherjee & Urmil Shah, ‘The PepsiCo Dispute: A Case of David Versus Goliath?’, SSRN (2020) — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3552452
PepsiCo Sues Gujarat Farmers for Growing Potato Variety Used in Lays’, Live Law (26 April 2019) — https://www.livelaw.in
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