Delhi HC Upholds PepsiCo's Patent Claim for Lay's Potato Variety

The division bench of the Delhi High Court has recently ruled in favor of PepsiCo, granting them a patent for a specific potato variety used in their popular Lay's potato chips.

PepsiCo wins Patent Case

In 1989, PepsiCo, a renowned New York based  American snacks and beverages manufacturer, established its inaugural facility in India with the purpose of manufacturing potato chips. A specific variety of potato seeds was provided to a group of farmers by the company, who then exclusively sold their produce to PepsiCo at a predetermined price.

In 2019, PepsiCo initiated a lawsuit against a select number of Indian farmers for cultivating the FC5 potato cultivar, claiming patent infringement. Additionally, the company sought compensation of over Rs 10 crore ($121,050) from each accused farmer for the alleged infringement. However, after several months, PepsiCo decided to withdraw the lawsuit.

The varietal registration certificate for the potato variety 'FL-2027' awarded to the U.S Giant has been revoked by the Plant Varieties Protection Authority PPV&FR in December 2021.

In 2021, the Protection of Plant Varieties and Farmers' Rights (PPVFR) Authority of India decided to withdraw the intellectual protection granted to the FC5 potato variety of  PepsiCo. The authority cited that Indian regulations prohibit the patenting of seed varieties, leading to the revocation of the intellectual property rights.

The authority's decision was prompted by a petition filed by agricultural activist Kavitha Kuruganti, who alleged that PepsiCo India had obtained the registration certificate through the submission of false information.

PepsiCo filed a petition with the Delhi High Court challenging the decision, however, single Judge dismissed their appeal in July 2023. Subsequently, the company appealed to the same court to overturn the ruling. In a recent judgement dated Jan. 9, the devision bench of Delhi High Court judges reversed the ruling made in July 2023. PepsiCo expressed their satisfaction with this decision.

Despite arguments put forth by Kavitha Kuruganti, a farmers' rights campaigner, claiming that PepsiCo should not be granted a patent for a potato seed variety, the court has sided with the company. PepsiCo's renewal application will now be reinstated in the Registrar's file and will be processed in accordance with the law.

Furthermore, the court dismissed Kuruganti's assertion that PepsiCo's multiple lawsuits against farmers were contrary to the public interest. The court stated that there was no evidence to support the claim that these lawsuits were vexatious or part of predatory tactics employed by PepsiCo, apart from a mere mention of the suits alleging infringement.

About FL 2027 Potato Seed Veriety:

FL 2027, a potato cultivar created by Robert W Hoopes at Frito-Lay Agricultural Research, has been exclusively bred to cater to the chip production needs of PepsiCo's Lay's brand.

FL 2027 possesses exceptional attributes that make it an optimal choice for chip manufacturing, including its elevated dry matter, minimal sugar content, and reduced moisture levels.

These remarkable qualities not only contribute to minimizing dehydration and energy expenses during processing but also mitigate the likelihood of discoloration when subjected to frying.

However, it is worth noting that PepsiCo's initial application in 2012 sought the registration of FL 2027 as a "new variety". Unfortunately, this application was rejected due to its failure to meet certain criteria.

PepsiCo India Holdings was officially granted a certificate of registration for FL 2027 on February 1, 2016 by PPVFRA, classifying it as an "extant variety". This designation meant that for the duration of the validity period, no other entity could engage in the commercial production, sale, marketing, distribution, import, or export of FL 2027 without obtaining authorization from the breeder.

The validity period spanned 6 years from the registration date and had the potential to be extended up to 15 years.

Criteria for a "new variety" of Plant and FL 2027

A "new variety" must meet the requirement of novelty, meaning that the material derived from it should not have been sold in India within one year prior to the application for registration.

FL 2027 variety only fulfilled the criteria of distinctiveness, uniformity, and stability, but not novelty. So, the Reason for the Registration Revocation is that PepsiCo provided an incorrect initial date of commercialization for the variety (17 Dec 2009), despite it being already commercialized in Chile in 2002.

As a result, the PPVFRA revoked the protection in December 2021 and rejected PepsiCo's application for renewal in February 2022. Furthermore, it clarified that India's regulations do not permit patenting of seed varieties. PepsiCo has contested the decision of the PPVFRA in the Delhi HC.

Protection of Plant Varieties and Farmers' Rights (PPVFR) Authority

1. The PPVFRA is a reputable organization in India that is dedicated to protecting the rights of plant breeders and farmers.

2. Statutory body established under the Protection of Plant Varieties and Farmers' Rights (PPVFR) Act, 2001, the PPVFRA holds the responsibility of safeguarding the interests of breeders and farmers.

3. With a crucial role in the field of intellectual property protection, the PPVFRA ensures that plant varieties are granted the necessary rights and breeders and farmers are duly recognized.

4. Through a thorough review process, the authority carefully examines applications for plant variety registration and grants certificates of registration to eligible applicants.

5. Additionally, the PPVFRA possesses the authority to revoke or cancel the registration of plant varieties if it deems necessary, further emphasizing its commitment to upholding the rights of breeders and farmers.