PepsiCo’s suing nine Gujarat farmers for alleged infringement of its intellectual property rights (IPR) over a proprietary potato variety makes for bad optics, bordering on a public relations disaster. The American food-and-beverage giant enjoys IPR protection in India for FL 2027, a potato variety with high dry matter and low sugar content that is better suited for making chips (normal table potatoes have more moisture, which adds to dehydration and energy costs during processing, and higher sugar that causes blackening on frying). Such protection is, indeed, required for incentivising agricultural research and development of new plant varieties by breeders, both in the private and public sectors. Under the Protection of Plant Varieties and Farmers’ Rights Act, 2001(PPVFRA), over 3,500 varieties across a range of crops — including those bred or improved by individual farmers — have so far been granted registration certificates for up to 15 years. These certificates confer on the breeders the exclusive rights over commercial production, sale, marketing, distribution, export and import of their protected varieties.
However, the PPVFRA simultaneously entitles farmers to “save, use, sow, re-sow, exchange, share or sell” the produce and seeds of any variety protected under the Act. Such freedom is conditional only upon no sale of such seeds in branded form — in other words, being “put in a package or any other container and labeled”. It is clear from this that the Gujarat farmers had not committed any IPR infringement by merely growing FL 2027 potato, even if without PepsiCo’s authorisation. PepsiCo may have developed this processing-grade variety solely for its Lay’s chips and for contract cultivation by farmers through a buy-back mechanism at pre-fixed rates. The company claims to be working with some 24,000 farmers across nine states: It’s fair to assume they benefit from the arrangement, both on account of being insulated from open market price fluctuations — huge in potatoes — and also receiving quality farm inputs and extension support. PepsiCo may, in turn, have legitimate concerns over farmers independently cultivating its proprietary varieties and possibly even supplying their produce to rival chips/French fries makers. But that still does not constitute an IPR infringement.
It would be in PepsiCo’s best interest to simply withdraw its suit against the Gujarat farmers, without attaching conditions. A $65-billion multinational seeking Rs one crore each of damages from Average Joe farmers of Sabarkantha — that too, during election time — is going to only invite opprobrium and consumer backlash. The losses from that will far outweigh any pyrrhic legal victory.