In a major legal blow to PepsiCo, the Delhi High Court has recently confirmed the cancellation of the company’s patent for potatoes. This decision marks a significant setback for the company in its efforts to protect its intellectual property rights.
The court found that PepsiCo had provided incorrect information in its application for registration, leading to the invalidation of the patent. This ruling paves the way for other players to enter the market and produce the popular potato variety. The decision has far-reaching implications for PepsiCo’s chip production and its contractual relationships with thousands of farmers in India.
The Delhi High Court has ruled against PepsiCo India Holdings Pvt. Ltd, upholding the revocation of intellectual property protection for a potato variety developed by the company. The court’s decision affirms an earlier order by the Protection of Plant Varieties and Farmers’ Rights Authority (PPVFRA).
The case revolves around FL 2027, a potato variety known for its high dry matter and low sugar content, making it ideal for chip production. PepsiCo’s subsidiary, PepsiCo India Holdings, obtained a certificate of registration for FL 2027 as an “extant variety” in 2016. This certification granted them exclusive rights over the commercial production, sale, and distribution of the potato variety for a period of six years, extendable up to 15 years.
In December 2021, the Protection of Plant Varieties and Farmers’ Rights Authority (PPVFRA) revoked the registration of FL 2027. PepsiCo India’s application for renewal was subsequently rejected in February 2022. PepsiCo appealed these decisions to the Delhi High Court, but the court upheld the PPVFRA’s actions in a ruling issued on July 5th. This is the latest development in the ongoing legal battle between PepsiCo India and the PPVFRA.
The court’s decision was based on PepsiCo’s incorrect application for FL 2027’s registration. The company had filed the application in 2012, claiming the potato variety as a “new variety” and stating its first commercialization date in India as December 17, 2009. However, the court found that FL 2027 did not meet the novelty criterion for new varieties, as it had already been commercialized in Chile in 2002. Therefore, the potato variety should have been registered as an “extant variety” based on its distinctiveness, uniformity, and stability, rather than novelty.
The Delhi High Court emphasized that any protection granted for a plant variety requires the applicant to make a complete and accurate disclosure of their invention or development. PepsiCo’s registration had been obtained based on incorrect information, leading to its invalidation.
FL 2027 has been widely grown by approximately 14,000 farmers in India under contract cultivation with PepsiCo India, who purchased the potatoes at predetermined rates for use in their Lay’s brand of potato chips. With the revocation of the patent, other parties will now have the opportunity to commercially produce and market this potato variety.
PepsiCo India has not yet released an official statement regarding the court’s decision. It remains to be seen how this ruling will impact the potato chip market in India and the contractual arrangements between PepsiCo and the farmers involved in potato cultivation.
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