{"id":311235,"date":"2024-01-11T15:00:09","date_gmt":"2024-01-11T09:30:09","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=311235"},"modified":"2024-02-21T14:36:28","modified_gmt":"2024-02-21T09:06:28","slug":"dhc-sets-aside-single-judges-order-affirming-revocation-of-pepsicos-registration-for-potato-variety-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/01\/11\/dhc-sets-aside-single-judges-order-affirming-revocation-of-pepsicos-registration-for-potato-variety-legal-news\/","title":{"rendered":"Delhi High Court sets aside Single Judge\u2019s order affirming revocation of PepsiCo\u2019s registration for potato variety FL 2027 used in Lay\u2019s chips"},"content":{"rendered":"
\n

Delhi High Court:<\/span> The appeal arose from the judgment dated 05-07-2023 passed by the Single Judge dismissing the appeal preferred by appellant, PepsiCo India Holdings (P) Ltd. (‘PepsiCo’) under Section 56<\/a> of the Protection of Plant Varieties and Farmers’ Rights Act, 2001<\/a> (‘the Act’) and which had challenged the order of revocation dated 03-12-2021 passed by the Authority constituted under the Act. The order of revocation had annulled the registration accorded in favor of PepsiCo in respect of plant variety FL 2027. The Division Bench of Yashwant Varma*<\/span> and Dharmesh Sharma, JJ., affirmed the Single Judge’s decision that the mistake of styling the variety as ‘new’ was remediable and in any case not fatal to the cause especially since the Registrar itself had decided to process the same as relating to the ‘extant’ category.<\/p>\n

However, the Court did not uphold the Single Judge’s decision insofar as it affirmed the order of revocation primarily on the ground of PepsiCo having furnished incorrect information relating to the date of first commercial sale as well as failure on its part to present requisite documentation at the time of applying for registration as mandated in terms of the Act. The Court thus set aside the impugned judgment and order dated 05-07-2023 to this extent.<\/p>\n

Background<\/p>\n

PepsiCo applied for registration of plant variety FL 2027 and the same was made describing FL 2027 as a ‘new’ variety and the date of first commercial sale was indicated as 17-12-2009. The application proceeded based on an Assignment Deed in terms of which Robert Hoopes, original breeder, had assigned all rights in the plant variety in favor of Recot Inc., a company duly incorporated in USA. Later, PepsiCo apprised the Registrar that the variety be treated as ‘extant’, and its application should be amended and corrected accordingly. Thereafter, PepsiCo submitted a revised application, and it again described and placed FL 2027 in category of ‘new’ rather than ‘extant’. After considering the revised application, the Registrar apprised PepsiCo that the application for the variety would be considered under the ‘extant’ category for the purposes of registration and thus on 01-02-2016, the certificate of registration was granted in favor of PepsiCo.<\/p>\n

Respondent filed a revocation application alleging that registration certificate was based on incorrect information and had been granted to a person not eligible for protection and that there was a failure on PepsiCo’s part to furnish information, documents and material required for registration. Thereafter, the Authority revoked the registration and stated that the Assignment Deed had neither been stamped as per the provisions made in the Stamp Act, 1899<\/a> nor did it bear witnesses signature as required. The Authority concluded that PepsiCo had not only described the variety incorrectly as a ‘new’ variety, but it had also falsely asserted that the revised application was corrected manually so as to be considered as being an application for registration of an ‘extant’ variety.<\/p>\n

PepsiCo challenged the Authority’s order before the Single Judge, who observed that there did not appear to be any dispute that FL 2027 was an ‘extant’ variety and PepsiCo had nothing to gain by representing FL 2027 to be a ‘new’ variety. The Single Judge identified the first sale of FL 2027 to be of the year 2002 in Chile and not 17-12-2009, which had been mentioned by PepsiCo. Thus, the Single Judge’s decision was appealed before this Court.<\/p>\n

Analysis, Law, and Decision<\/p>\n

The Court opined that Sections 34(a), (b), (c), (d), and (e) of the Act shed light on the nature and extent of the revocation power and the same was not attracted when the grant was not found to suffer from patent invalidity or ineligibility. The power of revocation thus would be confined only to situations where it was found that the grant had come to be made in favour of a person or variety which was ineligible or where a variety which was otherwise not entitled to be registered had been accorded protection.<\/p>\n

The Court noted that Section 34 of the Act used the expression “may on the application in the prescribed manner of any person interested, be revoked”<\/span>. The Court further noted that Section 34 of the Act was pari materia<\/span> to Section 64<\/a> of the Patents Act, 1970<\/a>. The Court relied on Sukesh Behl v. Koninklijke Phillips Electronics<\/span>, 2014 SCC OnLine Del 2313<\/a> (‘Sukesh Behl Case’), wherein the Division Bench of this Court dealt with the issue of “whether the power to revoke would be warranted in situations where a failure to furnish information was neither intentional nor deliberate?”. The Court in Sukesh Behl Case<\/span> (supra) observed that “the word ‘may’ employed in Section 64(1) indicated that the provision was directory and raised a presumption that the power of revocation of patents conferred under Section 64(1) was discretionary. The word ‘may’ was not a word of compulsion. The revocation under Section 64(1)(m) was not automatic and it was always open to the Court to examine whether the omission to furnish the information was deliberate or intentional. The revocation would follow only if the Court was of the view that the omission to furnish the information was deliberate.”<\/span>.<\/p>\n

The ‘new’ and ‘extant’ dispute<\/p>\n

The Court noted that PepsiCo had repeatedly and while submitting its applications for registration ticked the box meant for ‘new’ variety, and while responding to Registrar’s communication and in its own letter, PepsiCo had clearly apprised the Authority that it was seeking registration of FL 2027 under the ‘extant’ category. The Court stated that while applying for registration, PepsiCo had never claimed FL 2027 to be novel. The Court thus concurred with the Single judge’s conclusion that the registration was not liable to be revoked on this basis.<\/p>\n

Dispute regarding the date of first sale<\/p>\n

The Court opined that PepsiCo would have derived no benefit or advantage in making a deliberate or conscious declaration of the date of first sale as 17-12-2009. The mentioning of the date of first sale whether computed with reference to commercialization in Chile or in India did not adversely impact PepsiCo’s right to apply under the Act either on the date when the application was originally moved or even when it was filed in its revised form.<\/p>\n

The Court noted that in terms of the provisions made in Rule 22(2A) of the Protection of Plant Varieties and Farmers’ Rights Rules, 2003 (‘Rules’), PepsiCo had the right to apply for registration under the ‘extant’ variety within 15 years from the date of first sale and the application as ultimately made would thus be within the 15-year time period, be it computed from 28-10-2002 or 17-12-2009.<\/p>\n

Inherent Contradiction<\/p>\n

The Court took note of PepsiCo’s contention that the Single Judge’s findings with respect to ‘new’ and ‘extant’ variety on one hand and those with respect to first sale of the FL 2027 variety were clearly contradictory or at least irreconcilable. The Court opined that the power of revocation which stands comprised in Section 34 of the Act could not possibly be construed as being intended to be invoked in any eventuality or in situations which might have no impact on appellant being otherwise eligible to be accorded protection or the registration being otherwise valid and in conformity with the provisions of the Act.<\/p>\n

The Court was thus unable to concur with the Single Judge’s observation that the incorrect mention of the date of first sale was a determinative factor even though it might not “materially affect” the grant. The Court opined that it would be wholly arbitrary and illogical to accord a judicial imprimatur to an order of revocation which was founded on a factor which had no material bearing on the ultimate grant or which failed to meet the tests of fundamental ineligibility and invalidity.<\/p>\n

Section 39(1)(iv) of the Act and Public Interest<\/p>\n

The Court took note of respondent’s contention that the the filing of various suits by PepsiCo was violative of the rights conferred upon farmers by virtue of Section 39(1)(iv) of the Act and the institution of these suits was clearly representative of PepsiCo acting contrary to public interest and thus the registration was liable to be revoked under Section 34(h) of the Act. The Court opined that apart from a mere reference to various suits alleging infringement which were stated to have been filed by PepsiCo, respondent failed to establish\/prove that those suits were vexatious or that they had been instituted as part of predatory tactics of PepsiCo.<\/p>\n

The Court noted that the the institution of a suit for the purposes of protection of rights conferred by Section 28 of the Act could not per se be said to be intimidatory or vexatious. Such an allegation would have to be established and proven in accordance with law. The Court opined that the Registrar while considering the application for registration did not require or call upon PepsiCo to furnish any additional information. Such a power was conferred upon the Registrar in terms of Section 20 of the Act and had these issues been flagged at that stage, the present controversy might not have arisen at all.<\/p>\n

The Court affirmed the Single Judge’s decision that the mistake of styling the variety as ‘new’ was remediable and in any case not fatal to the cause especially since the Registrar itself had decided to process the same as relating to the ‘extant’ category. However, the Court did not uphold the Single Judge’s decision insofar as it affirmed the order of revocation primarily on the ground of PepsiCo having furnished incorrect information relating to the date of first commercial sale as well as failure on its part to present requisite documentation at the time of applying for registration as mandated in terms of the Act. The Court thus set aside the Single Judge’s decision to this extent. The Court further held that the renewal application made by PepsiCo should stand restored on the file of the Registrar who should dispose of the same in accordance with law.<\/p>\n

[PepsiCo India Holdings (P) Ltd. v. Kavitha Kuruganti, 2024 SCC OnLine Del 153<\/a>, decided on 09-01-2024<\/span>]<\/p>\n

*Judgment authored by: Justice Yashwant Varma<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Appellant:<\/span> Dayan Krishnan, Senior Advocate; Dheeraj Nair, Anjali Anchayil, Aishna Jain, Advocates<\/p>\n

For the Respondent:<\/span> Colin Gonsalves, Senior Advocate; Hetvi Patel, Umesh Kumar, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“It will be wholly arbitrary and illogical to accord a judicial imprimatur to an order of revocation which is founded on a factor which has no material bearing on the ultimate grant or which fails to meet the tests of fundamental ineligibility and invalidity.”<\/p>\n","protected":false},"author":1,"featured_media":303940,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[2543,64294,51185,59264,64293,10851,3173,43371,63189],"class_list":["post-311235","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-Delhi_High_Court","tag-f-2027","tag-pepsico","tag-plant-variety","tag-potato","tag-registration","tag-revocation","tag-single-judge","tag-variety"],"yoast_head":"\nDelhi HC sets aside Single Judge\u2019s order affirming revocation of PepsiCo\u2019s registration for 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