Bayer AG’s Monsanto won a legal battle to own patents on genetically-modified cotton seeds in India, the world’s biggest producer of the fiber, in a rare piece of good news for the German company.
India’s Supreme Court ruled on Tuesday that Monsanto’s patent for Bt cotton seeds is valid, overturning a judgment by the High Court of Delhi that said certain items such as seeds, plants and animals can’t be patented. A two-judge bench, headed by Justice Rohinton F. Nariman, referred the matter to the lower court saying that all aspects related to Monsanto’s patents on genetically-modified seeds can be considered by the Delhi court.
The ruling is a boost for Monsanto, which faced the risk of losing revenues without a claim over exclusive rights in India, as the company faces legal challenges in the U.S. over allegations that its Roundup weed killer can cause cancer as well as a backlash in Europe over genetically modified organisms. The verdict may also boost foreign investors’ confidence about the validity of patents awarded to firms in India.
The ruling may prompt some biotech companies to revive expansion plans that were placed on hold amid restrictions imposed by the government and local courts in recent years.
Shares of Kaveri Seed Co. erased gains to drop as much as 3.6 percent on Tuesday, while Monsanto India Ltd. jumped as much as 13.5 percent in high volumes after the verdict.
The ruling is the result of years of legal battles between Monsanto and domestic seed companies, led by Nuziveedu Seeds Ltd. The Indian firm, one of the licensees of the U.S. company’s seeds in India, had petitioned in the court to cancel Monsanto’s patent. Monsanto had lodged counter cases for patent infringements by Indian companies.