Supreme Court Upholds PepsiCo's Lay's Potato Variety Registration

The Supreme Court has refused to interfere with the Delhi High Court's ruling in the long-running intellectual property dispute over PepsiCo India's registration of the FL 2027 (FC-5) potato variety used to make Lay's potato chips.

The dispute arose after Kavitha Kuruganti, a social activist, sought cancellation of the registration, arguing that PepsiCo's lawsuits against farmers were contrary to public interest.

The court found no reason to interfere with the High Court's judgment upholding Pepsico's rights and clarified that farmers remain entitled to statutory protection under the Protection of Plant Varieties and Farmers' Rights (PPVFR) Act, 2001, in proceedings initiated by the company.

A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran ruled that PepsiCo's registration could not be revoked under Section 34(h) of the PPVFR Act merely because it had filed infringement suits against farmers.

The court agreed with the Delhi High Court that there was nothing on record to establish that the suits were vexatious or had been instituted as a predatory tactic.

"The High Court has clearly found that the allegation was raised merely with reference to various suits filed by the first respondent, alleging infringement against individual farmers. The High Court, according to us, rightly found that there was nothing to establish that these suits were vexatious or that they had been instituted as a predatory tactic of the first respondent. Filing of suits for the protection of rights conferred under the statute, per se cannot be held to be intimidatory or vexatious. Section 34(h) of the Act, hence, was not attracted, according to the High Court and if there was any allegation of a vexatious suit, then the same would have to be raised and proved at the appropriate stage before the appropriate forum, held the High Court. We find absolutely no reason to interfere with the same.", the top court noted.

The bench also clarified that individual farmers remain free to invoke the protection available under Section 39(1)(iv) of the PPVFR Act if PepsiCo initiates proceedings against them. They would have to establish that they fall within the scope of the provision.

At the same time, the court made it clear that PepsiCo cannot be prevented from pursuing legal remedies if it believes its statutory rights have been infringed.

"Be that as it may, considering the fact that the petitioner is not agitating a personal cause and is attempting to protect the interest of the farmers, we only make it clear that any individual farmer who claims protection under Section 39(1)(iv) of the Act, would be entitled to do so in any proceeding initiated by the first respondent and prove that they come under its cover. However, we make it clear that we cannot restrain the first respondent from taking legal remedies, if their rights are infringed.", it ruled.

The case stems from PepsiCo India's registration of the FL 2027 (FC-5) potato variety under the PPVFR Act. The variety is used to manufacture Lay's potato chips.

Kavitha Kuruganti, who approached the authorities claiming to protect farmers' interests, sought revocation of PepsiCo's registration under Section 34 of the PPVFR Act. She argued that the company's infringement suits against farmers showed that the registration was contrary to public interest.

The PPVFR Authority revoked PepsiCo's registration. PepsiCo challenged that decision before the Delhi High Court.

A single judge partly upheld and partly modified the authority's order. Both PepsiCo and Kuruganti appealed. The Division Bench ultimately restored PepsiCo's registration and held that Section 34(h) could not be invoked merely because the company had filed infringement suits against farmers.

Before the Supreme Court, Kuruganti argued that the High Court had not adequately addressed the protection available to farmers under Section 39(1)(iv) of the Act.

PepsiCo supported the High Court's judgment. The Supreme Court rejected the petitioner's contention. It observed that the High Court had considered both Section 39(1)(iv) and the argument that the registration should be revoked on public interest grounds under Section 34(h).

Finding no reason to interfere with the Delhi High Court's judgment, the Supreme Court disposed of the special leave petitions while clarifying that individual farmers can claim the statutory protection available under Section 39(1)(iv) of the PPVFR Act in proceedings initiated against them

For Petitioner: Colin Gonsalves, Sr. Adv, Hetvi Patel, Umesh Kumar, Bhanu Pathania, Puja Sharma, AOR

For Respondent: S. Niranjan Reddy, Sr. Adv, Anjali Anchayil, Vibhor Jain, Simarpreet Kaur Matharoo, Dheeraj Nair, AOR, Palak Arora