What is the PEPSI Co- Potato case? What are the ethical issues involved in the case?

 

Relevance:

  • Prelims,  Mains GS paper I (farmer’s issues), GS paper II (Agriculture issues at international level), GS paper III (Economy), GS paper IV (Ethical issues in patents)

What’s the news?

  • PepsiCo Inc said on 16 May 2019 it will withdraw its lawsuit against four Indian potato farmers accused of infringing its patent, a PepsiCo India spokesman said.
  • PepsiCo in April sued four Indian farmers for cultivating a potato variety — FC5 — grown exclusively for its popular Lay’s potato chips under The Protection of Plant Varieties and Farmers’ Rights Act (PPVFRA).

Background:

  • The company applied for the registration of two hybrid potato varieties FL 1867and FL 2027 in February 2011.
  • These varieties were registered under the PPVFRA in February 2016 for a period of 15 years.
  • PepsiCo marketed the latter variety under the trademark FC-5, and now is claiming that the Gujarat farmers are illegally using this variety.
  • PepsiCo says it developed the FC5-type, which have lower moisture content, to a group of farmers who in turn sell it their produce at a fixed price.

Interests of farmers and MNCs are in conflict with each other:

  • India joined the World Trade Organisation in 1995 and agreed to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
  • The PPVFRA was enacted in 2001 after engaging debates were as to how intellectual property rights should be introduced in Indian agriculture after joining WTO.

There were two questions before the government:

  1. i) either enact a law that protected the interests of farming communities, or
  2. ii) to accept the framework of plant breeders’ rights given by the International Union for Protection of New Plant Varieties(better known by its French acronym, UPOV Convention).

The latter option was rejected primarily because the current version of UPOV, which was adopted in 1991 (UPOV ’91), denies the farmers the freedom to re-use farm-saved seeds and to exchange them with their neighbors.

PPVFRS protects the farmers in 3 ways:

  • Farmers are recognized as plant breeders and they can register their varieties;
  • Farmers engaged in the conservation of genetic resources of landraces and wild relatives of economic plants and their improvement through selection and preservation are recognized and rewarded; and,
  • Protecting the traditional practices of the farmers of saving seeds from one harvest and using the saved seeds either for sowing for their next harvest or sharing them with their farm neighbors.

Article 39(1)(iv):

  • It sanctifies the last-mentioned rights, states that farmers are “entitled to save, use, sow, resow, exchange, share or sell his farm produce including seed of a variety protected under this Act in the same manner as he was entitled before the coming into force of this Act”.

Points of laws in this case:

  • FC-5 has been registered as an “Extant Variety”: This means that it is also a “Variety of Common Knowledge”. This, in other words, implies that the said variety of potato was already available in the country before it was registered and that there was “common knowledge” about this variety in the country. It may, therefore, be assumed that PepsiCo’s variety would surely have been produced in the country before it was registered.
  • Ethical issue: Pepsi-Co raided the fields of the farmers to obtain the samples. This was done on the pattern of Canola case in Canada (1998), wherein the MNC Monsanto raided the fields of the farmers with the help of private investigators. It drew much flak from the farmers’ organizations world over.

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