You are on page 1of 10


AMIT A b2447
PepsiCo, Inc. an American multinational company has sued
eleven Indian farmers who grew potatoes in the western
state of Gujarat. They were charged for “illegally” growing
and selling a variety of potato registered by them under the
Protection of Plant Varieties and Farmers’ Rights (PPV&FR)
Act, 2001 on the 27th of April 2019.

PepsiCo asked for more than 10 million rupees ($142,840.82) each

for the patent infringement.

The patent is for the potato plant variety FL-2027 (commercial name
FC-5). Pepsico had the patent until October 2023.
 A civil suit was filed by PepsiCo
India against nine farmers in
Gujarat’s Sabarkantha and Aravalli
districts for infringing on their
patent rights.
 They claimed that the farmers in
ROOT OF THE CAUSE Gujarat were growing the special
FC5 variety of potatoes that can
grow in low moisture condition
and was also registered under the
Plant Variety protection rights.
The most successful and one of
the popular product of PepsiCo
that is the lays chips is made using
these variety potatoes.
 The farmers claimed that they did
not knowingly try to infringe the
PepsiCo demanded four farmers to pay Rs. 1.05 crore and Rs. 20 lakhs from the

By the end of April, Gujarat Deputy Chief Minister Nitin Patel said that the state
government will support the farmer’s cause.

An executive of PepsiCo to Business Today said, “Headquarters has asked

PepsiCo India to resolve the issue at the earliest and work as a team… They are
concerned about the legal issue and the backlash”

190 activists also wrote to the Union Ministry of Agriculture asking for legal and
financial support for the farmers. They also appealed the government to
pressure PepsiCo to withdraw these “false” cases against farmers who do not
have the means to fight back.

PepsiCo’s argument was entrenched in intellectual property (IP) rights, an area

of India’s legal framework that has recently been criticised by the United
States Trade Representative (USTR).
The whole case of PepsiCo – Potato farmers revolve around two important acts,
Infringement of Patent Rights Act and The Protection of Plant Varieties and
Farmers’ Rights Act (PPVFRA).

PepsiCo filed a lawsuit against the farmers of Gujarat, on the term that they
infringed the patent of the company to cultivate the special variety of potato
which they use to make lays.

Patent infringement can be simply explained as the prohibited act of using a

product or service whose right solely belongs to another person or organisation
without his/her/their permission
In the PepsiCo-Potato case four farmers where charged for “illegally” growing it’ s
potato varieties which were registered under PPVFRA. The two hybrid varieties of
potato, FL 1867 and FL 2027 were registered under PPVFRA in February 2016 for a
period of 15 years, after the company applied for it in 2011. Under the trademark
FC-5, PepsiCo marketed the latter variety and later when the farmers began to
cultivate the same in their respective private land, they were claimed to be illegal
users or patent infringers.

PepsiCo has invoked section 64 (a) of The Protection of Plant Varieties and
Farmer’s Act, 2001 to claim infringement of its rights.

Since the FC-5 has been already registered as an “Extant variety” which also mean
“Variety of common knowledge”, it was implied that this particular variety of seed
was available in the market way before it was registered and have been produced
since then.

Also, later the farmers pointed out that the section 39(1)(iv) of the same act
allows them to produce and sell any variety of crops as long as they don’t sell
branded seed of registered variety. The above section states the Farmer’s right

These were the key law points which changed the verdict of PepsiCo-Potato case
In Ahmedabad civil court, PepsiCo’s lawyer offered a settlement on these terms:
the farmers should give an undertaking that they will not use its registered
variety and destroy their existing stocks, or must enter PepsiCo's collaborative
farming program where farmers buy seeds from the company and sell produce
back to the company .The lawyer for the farmers stated that they would need
time to consider the offer, and to reply to the court.

PepsiCo invoked Section 64 of the Protection of Plant Varieties and Farmers’

Rights (PPV&FR) Act, 2001 to claim infringement of its rights. However, farmers
groups cited Section 39 of the same Act, which specifically stated that a farmer
is allowed “to save, use, sow, re-sow, exchange, share or sell his farm produce
including seed of a variety protected under this Act” so long as he does not sell
“branded seed”.
A PepsiCo India spokesperson said that this was done to protect our rights and
safeguard the larger interest of farmers that are engaged with us and who are
using and benefitting from seeds of our registered variety.

Farmers groups asked the Central government’s Protection of Plant Varieties and
Farmers’ Rights Authority (PPV&FRA) to make a submission in court on the
farmers’ behalf and fund their legal costs through the National Gene Fund

It was the war of “chips”, not the microchips but “potato chips”.
PepsiCo withdrew its legal suits against four farmers in an Ahmedabad
commercial court, as well as cases against five farmers Modasa District
court on Friday. Two other cases against large farmers and traders were
withdrawn in a Deesa court earlier this week. Initially PepsiCo sued small
farmers from Sabarkantha District, Gujarat Rs.1.05 Crores each. While
farmers have claimed victory, they also demanded an apology from
PepsiCo and planned to sue them for compensation for “harassment” by
the firm. PepsiCo’s decision to withdraw the cases was “backed by an
assurance from both the government, i.e. Gujarat government and the
Centre, for a long-term amicable settlement”. As the final verdict the
farmers are allowed to sell or purchase FC-5 variety of potatoes but
prohibited from selling seeds of the same.