PepsiCo India Holdings on Thursday indicated it was willing to withdraw a suit for alleged infringement it has filed against a group of potato farmers in Gujarat in a lower court in Ahmedabad, following discussions with government officials.

“After discussions with the government, the company has agreed to withdraw cases against farmers. We are relying on the said discussions to find a long-term and an amicable resolution of all issues around seed protection,” a PepsiCo India spokesperson said in a statement here.

The Indian arm of the US-headquartered multinational food giant filed suits against farmers last week alleging that they had infringed its intellectual property rights (IPR) over a potato variety named FL 2027, also called FC5, by allegedly producing it without the company’s approval.

It sued nine farmers from Sabarkantha and Aravalli districts in two separate courts and sought damages of as much as ₹1 crore from each of them.

The US firm, which is a leading producer of potato chips under its Lay’s and Uncle Chipps brands, has been holding parleys with the central and Gujarat governments since the news broke out, sources said. PepsiCo claimed that it was compelled to take judicial recourse to protect its registered potato variety. The company also said it offered an amicable settlement to the farmers from the get-go, the spokesperson said.

Farmer groups, however, have been opposing an out-of-court settlement with the company. While opposing the government intervention to settle the case, the Alliance for Sustainable and Holistic Agriculture (ASHA) said nothing less than a clear reiteration of Section 39(1)(iv) of the Protection of Plant Varieties & Farmers Rights (PPV&FR) Act, 2001 was satisfactory and justifiable. According to the farmer group, this specific section provides an entitlement to farmers to cultivate any variety that they would like to, including PVP-registered varieties.

A flawed law?

Talking to BusinessLine earlier this week, Delhi-based legal researcher and policy analyst Shalini Bhutani said that the PPV&FR Act has many provisions that protect farmers, unlike plant variety protection laws in other countries. But, its biggest pitfall is that it is essentially an IPR law. “The irony is that farmers’ rights have been recognised in a law on intellectual property, when farmers were never asking for IPR in the first place,” she said.

“This is the first case of its kind in India and hence whatever verdict is given by the court would be trendsetting (precedent setting),” said Ram Kaundinya, Director General of the Federation of Seed Industry of India.

Our Ahmedabad bureau adds: A top Gujarat government official said that a meeting with the US-headquartered company is scheduled for Friday in Gandhinagar. Deputy Chief Minister of Gujarat Nitin Patel had on Wednesday admitted that the government was “trying to resolve the issue ‘out-of-court’ and as per the law, in a manner helpful to farmers.” A meeting is yet to take place.

Farmers’ representatives, while welcoming the move, maintained a cautious stand. “There are no details available except for the announcement of the withdrawal of cases. The issue is of the protection and establishment of the farmers’ rights on seeds. That has to be made clear,” said Kapil Shah of Jatan trust, an organisation actively engaged in the fight against PepsiCo’s legal action.

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