Guest Post: Exhaustion in the Context of Seeds

I have discussed the doctrine of exhaustion in several posts on this blog. Below is a short guest post from Ms.Apurba Kundu on the issue of exhaustion with reference to protected seed varieties under the Plant Variety Protection and Farmers Rights Act, 2001. Apurba has a Bachelors degree in biotechnology engineering and a Bachelors in law from IIT Kharagpur. Apurba loves to read and hopes to teach someday. 

Now, to the Guest Post.

Exhaustion in the Context of Seeds

The US Supreme Court will start hearing arguments on patent exhaustion on February 19, 2013, specifically on whether the Federal Circuit Court of Appeals erred in refusing to find patent exhaustion – a doctrine which eliminates the right to control or prohibit the use of an invention after an authorized sale. The doctrine of exhaustion would be analyzed by the Court in the specific context of self-replicating technologies such as patented seeds. 

A case on similar lines was heard by the Supreme Court of Canada where it was held that the licensor/patentee could restrict sale of seeds produced from his patented invention and is entitled to impose contractual obligations, such as a prohibition on saving seeds.

This led me to think about the position of Indian Law on this issue.

The Plant Variety Protection and Farmers Rights Act, 2001 (“PVP Act”) is a very progressive, pro-developing country legislation. The relevant provision of the Act is Section 39(1)(iv), which throws light on the issue of exhaustion. The provision reads thus:

a farmer shall be deemed to be 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: Provided that the farmer shall not be entitled to sell branded seed of a variety protected under this Act.

Section 2(za)(iii) of the act defines “variety as follows”:

variety means a plant grouping except microorganism within a single botanical taxon of the lowest known rank, which can be considered as a unit with regard to its suitability for being propagated, which remains unchanged after such propagation, and includes propagating material of such variety, extant variety, transgenic variety, farmers’ variety and essentially derived variety.

This means the traditional right of a farmer to save seeds for the next season is protected. However, the farmer is enjoined from selling seeds which are owned by third parties.

Also, Section 39(2) of the Act entitles farmers to claim compensation from owners of registered seeds in case the performance of the seed fails to match the expected performance as disclosed by the right owner.

While discussing the PVP Act, it is important to discuss the Seeds Bill, 2004 too which has been pending since December 2004. New amendments were proposed by the government to the Bill in April 2010 and November 2010, which incorporated several recommendations of the Parliamentary Standing Committee. This bill also doesn’t restrict the farmer’s right to use or sell his farm seeds and planting material, provided he does not sell seeds which are owned by a third party.

Importantly, transgenic varieties of seeds can be registered only after the applicant has obtained clearance under the Environment (Protection) Act, 1986.  Farmers buying seeds are covered under Consumer Protection Act, 1986 and all registered varieties, seed producers, distributors and vendors have to disclose the expected performance under certain given conditions. If the seed fails to perform to expected standards, the farmer can claim compensation from the dealer, distributor or vendor under the Consumer Protection Act, 1986.

Maybe it’s high time that the Seeds Bill was passed by the Parliament. Meanwhile, farmers in faraway lands must be thinking it would have been better if they were Indian farmers.