MONSANTO TECHNOLOGY LLC THRU THE AUTHORISED REPRESENTATIVE MS. NATALIA VORUZ & OTHERSversusNUZIVEEDU SEEDS LTD. THRU THE DIRECTOR & OTHERS

                        [2019] 1 S.C.R. 145                           145


         MONSANTO TECHNOLOGY LLC THRU THE                             A
       AUTHORISED REPRESENTATIVE MS. NATALIA
                      VORUZ & OTHERS
                                v.
             NUZIVEEDU SEEDS LTD. THRU THE                            B
                     DIRECTOR & OTHERS
               (Civil Appeal Nos. 4616-4617 of 2018)
                       JANUARY 08, 2019
                                                                      C
          [R. F. NARIMAN AND NAVIN SINHA, JJ.]
      Code of Civil Procedure, 1908:
      s.9 – Suit / Counter Claim – Adjudication – Procedure for –
Suit seeking permanent injunction against defendants, restraining
them from using their registered trade-mark in violation of the       D
registered patent – Also sought temporary injunction by filing
application u/Or. 39 rr. 1 and 2 of CPC – Defendants filed Written
Statement as well as their Counter Claim seeking revocation of the
patent u/s.64 of Patents Act – Single Judge of the High Court while
deciding application for injunction observed that nature and extent
of the patent claim was a matter to be examined after pleadings       E
were complete and evidence adduced, which did not merit comments
at the stage of interim injunction – Single Judge issued notice on
the Counter Claim – Appeal by both the parties – Division Bench of
High Court while allowing the Counter Claim of the defendants
dismissed the claim of the plaintiffs as regards the patent – On      F
appeal, held: Section 64 of Patents Act necessarily presupposes a
valid consideration of the claims in the suit and the Counter Claim
in accordance with law and not summary adjudication sans evidence,
by abstract consideration – CPC provides a detailed procedure with
regard to the manner in which a suit instituted u/s. 9, including
Counter Claim has to be considered and adjudicated – Division         G
Bench of High Court ought not to have examined the Counter Claim
in a summary manner usurping the jurisdiction of Single Judge –
Summary adjudication of a technically complex suit requiring expert
evidence, that too at the stage of interim injunction, was neither
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146            SUPREME COURT REPORTS                         [2019] 1 S.C.R.


A     desirable nor permissible – Division Bench ought to have confined
      itself to examination of the validity of the order of interim injunction
      – In the facts and circumstances of the case, nature of the injunction
      relief was in order and merits no interference during pendency of
      the suit – Matter remanded to Single Judge – Patents Act, 1970 – s.
      3(j) and 64.
B
            Disposing of the appeals, the Court
             HELD: 1. Section 64 of the Patents Act provides for
      revocation of patent based on a counter claim in a suit. It
      necessarily presupposes a valid consideration of the claims in
C     the suit and the counter claim in accordance with law and not
      summary adjudication sans evidence by abstract consideration
      based on text books only. The Civil Procedure Code provides a
      detailed procedure with regard to the manner in which a suit
      instituted under Section 9, including a counter claim has to be
      considered and adjudicated. The CPC mandates a procedure by
D     settlement of issues, examination and cross-examination of
      witnesses by the parties, including discovery/inspection of
      documents, culminating in the hearing of the suit and decree. A
      suit can be disposed of at the initial stage, only on an admission
      inter alia under Order 12 Rule 6 of CPC or when the parties are
E     not in issue under Order 16 Rule 1 and the other grounds. [Para
      23][158-D-E]
            2. The Division Bench of High Court ought not to have
      disposed of the suit in a summary manner by relying on documents
      only, extracted from the public domain, and not even filed as
F     exhibits in the suit, much less examination of expert witnesses,
      in the facts of the present case. The issues raised were
      complicated requiring technological and expert evidence with
      regard to issues of chemical process, biochemical, biotechnical
      and micro-biological processes and more importantly whether
      the nucleic acid sequence trait once inserted could be removed
G     from that variety or not and whether the patented DNA sequence
      was a plant or a part of a plant etc. are again all matters which
      were required to be considered at the final hearing of the suit.
      [Para 23][158-F-H]

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MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                        147


      Alka Gupta v. Narender Kumar Gupta (2010) 10 SCC                 A
      141 : [2010] 1 SCR 756 – relied on.
      3. The Division Bench ought not to have examined the
counter claim itself usurping the jurisdiction of the Single Judge
to decide unpatentability of the process claims 1-24 also in the
summary manner done. Summary adjudication of a technically             B
complex suit requiring expert evidence also, at the stage of
injunction in the manner done, was certainly neither desirable
nor permissible in the law. The suit involved complicated mixed
questions of law and facts with regard to patentability and
exclusion of patent which could be examined in the suit on the
basis of evidence. [Para 22][158-A-C]                                  C

      4. The Division Bench ought to have confined itself to
examination of the validity of the order of injunction granted by
the Single Judge only. In the facts and circumstances of the
case, the nature of the injunctive relief granted by the Single
Judge was in order and merits no interference during the               D
pendency of the suit. The order of the Single Judge dated
28.03.2017 is restored and the suit is remanded to the Single
Judge for disposal in accordance with law. [Paras 25, 26][159-G;
160-A]
      “Marker-Assisted Recurrent Backcrossing in Cultivar              E
      Development” by Guoyou et.al – referred to.
                       Case Law Reference
      [2010] 1 SCR 756         relied on              Para 24
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4616-            F
4617 of 2018.
    From the Judgment and Order dated 11.04.2018 of the High Court
of Delhi at New Delhi in FAO(OS)(COMM) No. 86 of 2017 and
FAO(OS)(COMM) No.76 of 2017.
                               WITH                                    G

      Civil Appeal Nos. 188, 189-190 and 191-192 of 2019.
     Dr. A. M. Singhvi, Neeraj Kishan Kaul, Kapil Sibal, Sanjiv Sen,
Arvind P. Datar, K. V. Viswanathan, Shyam Divan, Jayant Bhushan,
Krishnan Venugopal, Rana Mukherjee, Shyam Divan, N. K. Kaul,           H
148            SUPREME COURT REPORTS                          [2019] 1 S.C.R.


A     Sr. Advs., Pravin Anand, Mahesh Agarwal, Rishi Agrawala, Ms. Archana
      Shankar, Dhruv Anand, Shrawan Chopra, Karan Luthra, Vishnu
      Tallapragada, Shubham Kulsheshtra, Adarsh Ramanujan, R. V. Prabhat,
      Vibhav Mithal, Ms. Udita Patro, Ms. Shruti Arora, Dr. Neeti Wilson,
      Azeem Samuel, Avishkar Singhvi, Ms. Gitika Suri, E. C. Agrawala, Pravin
      Anand, R. N. Karanjawala, Ms. Ruby Singh Ahuja, Ms. Deepti Sarin,
B
      Sanjeet Ranjan, Ms. Archana Shanker, Dhruv Anand, Shrawan Chopra,
      Mrs. Manik Karanjawala for M/s.Karanjawala & Co., Ms. Swikriti
      Singhania, Sayan Ray, Ms. Anindita Mitra, Soumo Palit, Chaitanya Mehta,
      Ms. Diya Kapur, Essenese Obhan, Abhishek Saket, Ms. Neha Khanduri,
      Rishabh Sharma, Ms. Sugandha Batra, Raghav Anand, Ms. Vrinda
C     Bhandari, Feorz Ali, Ketan Paul, Ms. Reeja Varghese, Tushar Bhushan,
      Ranjan Kumar Pandey, Sandeep Bisht, Ms. Liz Mathew, Jitendra Kumar,
      Ram Krishan, Aditya Dhar, Anuj Tiwari, Rahul Kumar, Ritwik Sahay,
      Aditya Sharma, Praneet Pranav, Ms. Ankita Chaudhary Rathi, Santosh
      Kumar, Nachiketa Joshi, Gunjan Singh, Satya Mitra, Amar Dave,
      P. S. Sudheer, Rishi Maheshwari, Ms. Anne Mathew, Ms. Pooja Katara,
D
      Ms. Aparna Kareer, Senthil Jagadeesan, Ms. Sonakshi Malhan, Ms.
      Suriti Chowdhary, Ms. Mrinal Kanwar, Satya Vikram, Abhishek Saket,
      Ms. Shahana Farah, Manish Madhukar, Rahul Dubey, M. Haque, Chitral
      Gambhir, Pranav Gupta, Ms. Lekha V. G., Ms. Manisha Singh, Abhai
      Pandey, Devanshu Sajlan, Sanyat Lodha, Deepak Joshi, Akash Lamba,
E     Advs. for the appearing parties.
            The Judgment of the Court was delivered by
            NAVIN SINHA, J. 1. Leave granted.
              2. The appellants/plaintiffs in Civil Appeal Nos.4616-4617 of 2018
F     instituted Civil Suit (Comm) No. 132 of 2016 seeking permanent injunction
      against the defendants from using the trademark “BOLGARD” and
      “BOLGARD II” brand cotton technology, violating the registered patent
      no. 214436 of the plaintiffs, and also to further restrain the defendants
      from selling and or using seeds/hybrid seeds bearing the patented
      technology, infringing the registered patent of the plaintiffs, along with
G     rendition of accounts. The parties shall, for convenience, be referred to
      by their position in the original suit.




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MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                  149
               [NAVIN SINHA, J.]

       3. The plaintiffs pursuant to their patent rights had entered into a      A
sub-licence agreement dated 21.02.2004 with the defendants for an initial
period of ten years. The agreement entitled the defendants to develop
“Genetically Modified Hybrid Cotton Planting Seeds” with help of the
plaintiffs’ technology and to commercially exploit the same subject to
the limitations prescribed in the agreement. The agreement also provided
                                                                                 B
for payment of licence fee/trait value by the defendants, for use of the
plaintiffs’ patented technology. The agreement after extension was
ultimately terminated by the plaintiffs on 14.11.2015 due to disputes
regarding payment of licence fee/trait value in view of subsequent price
control regime introduced by the State, and to which the defendants
required adherence by the plaintiffs. The plaintiffs filed an application        C
for injunction under Order 39, Rule 1 and 2 of the Code of Civil Procedure
(hereinafter referred to as ‘the Code”), to restrain the defendants from
using their registered trade mark in violation of the registered patent
during the pendency of the suit in view of the termination of the
agreement.
                                                                                 D
       4. The defendants in their written statement inter alia contended
that their rights were protected under the Protection of Plant Varieties
and Farmers’ Rights Act, 2001 (hereinafter referred to as ‘the PPVFR
Act’). The suit patent was bad because claims 1-24 were “process
claims” concerning genetic engineering or biotechnology method to insert
“Nucleic Acid Sequence” (NAS) into a plant cell as in claim 25-27                E
practiced in laboratory conditions, unlike the complete biological process
adopted by the defendants. The NAS was a chemical composition
incapable of reproducing itself and was thus not a micro-organism. Only
on insertion into a plant, a living organism, it imparts Bt.trait (insect
resistance) to the living organism. The defendants also filed a counter          F
claim no.51 of 2016 seeking revocation of the patent under Section 64 of
the Act, as being in violation of Section 3(j) of the Patents Act (hereinafter
referred to as “the Act”) in respect of plants and seeds that contained
DNA sequences, denying any infringement.
       5. The learned Single Judge on 28.03.2017, while deciding the             G
plaintiffs’ application for injunction, observed that the issues arising in
the suit necessarily required formal proof, particularly expert opinion,
which in complicated matters like that of patent were crucial for
ascertaining the breadth of the monopoly granted by the specifications
of a patent claim. The nature and extent of the patent claim was more
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150             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A     properly a matter to be examined after pleadings were complete and
      evidence adduced on the issues arising, which did not merit comments
      at the stage of interim injunction. Considering the existing patent
      registered under Section 48 of the Act, it was ordered that during the
      pendency of the suit, the parties shall remain bound by their respective
      obligations under the sub-licence agreement and that the licence fee/
B
      trait value payable by the defendant shall be governed by the laws in
      force. The learned Single Judge simultaneously only issued notice on
      the counter claim no.51 of 2016. The order of injunction dated 28.03.2017,
      therefore did not deal with or consider the counter claim. It was prima
      facie observed that the defendants having had the advantage of a sub-
C     licence ever since 2004, appeared unjustified in contending that they
      were not bound by the obligations under the agreement in view of the
      claimed statutory protections vis-à-vis the suit patent or the registered
      trademarks. Prima facie opining that the termination of the sub-licence
      agreement by the plaintiffs on 14.11.2015 appeared unjustified in view
      of the statutory price restrictions, the termination was held not to be of
D
      any consequence.
              6. Aggrieved, both the Plaintiffs and the defendants preferred
      appeals. The Division Bench dismissed the plaintiffs’ appeal upholding
      the defendants’ contention with respect to patent exclusion under Section
      3(j) of the Act and that the plaintiffs were at liberty to claim registration
E     under the PPVFR Act, as the two Acts were not complementary, but
      exclusive in the case of all processes and products falling under Section
      3(j) of the Act. Consequentially, the defendants’ counter claim succeeded.
      The suit was, however, permitted to continue with regard to the claim
      for damages and other reliefs. The plaintiffs were required to continue
F     with their obligations under the sub-licence agreement including payment
      of licence fee/trait value by the defendants in accordance with law.
            7. We have heard learned senior counsel Dr. Abhishek Manu
      Singhvi, Sri Kapil Sibal, Sri Neeraj Kaul, Sri K.V. Vishwanathan, Sri
      Arvind P. Datar, Sri Jayant Bhushan, Sri Krishnan Venugopal, Sri Shyam
G     Divan and Sri Sanjiv Sen, and learned counsel Sri Prasahant Bhushan
      and Ms. Anandita Mitra on behalf of the parties.
            8. Dr. Abhishek Manu Singhvi contended that the plaintiffs’ suit
      was for injunction restraining infringement of an existing and valid patent.
      The lack of patentability was never an issue in the suit. The defendants
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MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                 151
               [NAVIN SINHA, J.]

argued lack of patentability to invalidate the primary issue relating to        A
infringement only. The counter claim for revocation of the patent as
unpatentable, was neither argued nor adjudicated by the learned Single
Judge. Only notice was issued on the counter claim bearing no.51 of
2016 while counter claim bearing no.50 of 2016 challenging the termination
of sub-licence agreement was withdrawn. The issue for existence of
                                                                                B
the patent, patent exclusion under Section 3(j) of the Act was a heavily
mixed question of law and facts requiring formal proof and expert
evidence, to be considered at the hearing of the suit, as rightly observed
by the Single Judge. The defendants in their memo of appeal themselves
contended that the issue regarding existence of the patent and/or its
revocation could not have been decided summarily by the learned Single          C
Judge as these were matters which required evidence and could be
adjudicated only at the final trial of the suit. The plaintiffs’ claims were
under 25-27 only. The process claims 1-24 was never an issue in
consideration before the Single Judge and yet the Division Bench delved
into the same and held the process claims to be bad also.
                                                                                D
        9. The plaintiffs had never consented to a summary adjudication
regarding the validity of its patent. The consent referred to by the Division
Bench, had been given only to decide whether the plaintiffs’ patent had
been infringed or not, as also the scope of the patent, so as to allow or
disallow the relief of injunction. It is incomprehensible that the plaintiffs
holding a valid registered patent under the Act nonetheless would have          E
agreed to a summary consideration and validation/invalidation of the
patent. The patent comprises of a DNA construct or nucleotide sequence
in claim 25-27 comprising of three different components, i.e. (i) a promoter
(ii) a man-made gene for the production of Cry2Ab 5-endotoxin and, (iii)
a third component for the production of a transit peptide 6. The DNA            F
construct so created did not exist in nature and upon insertion into a
plant confers insect tolerant trait. A plant is next produced as a “fusion
protein” which comprises the Cry2Ab S-endotoxin 7 bonded with the
transit peptide. The subject patent claims use of bacillus thuringiensis
strain and the development of two genes designated Cry2Aa and Cry2Ab.
Each gene sequence is known for its ability to synthesize proteins with         G
pesticidal properties. The NAS is not a living organism but a chemical
created in a laboratory. The “event” which is the positioning of the
NAS at a unique location in the genome of a plant cell is a separate,
subsequent and entirely different invention for which the plaintiffs have
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152             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A     obtained a different patent no. 232681 and which is not the subject matter
      of the present suit. In this case, the invention is the NAS and the target
      of the invention is its use in a plant cell. The property of the NAS is
      what makes the plant produce and localize the toxin protein in a specific
      location in the plant cell so as to make the toxin protein present throughout
      the plant, in pesticidal effective levels and still produce agronomically
B
      stable plants. Relying on “Marker -Assisted Recurrent
      Backcrossing in Cultivar Development” by Guoyou et.al, it was
      submitted a NAS gene once inserted into a plant, was removable and
      did not become part of the plant genome, to lose its patentable
      characteristics. These were matters to be considered in the suit on basis
C     of expert evidence.
             10. Shri Vishwanathan and Shri Datar for the defendant have
      adopted directly and mutually contradictory stands by contending that
      claims 25-27 are product claims, namely parts of a plant, and subsequently
      that the said claims are essentially biological process claims. Claims 1-
D     24 are not excluded under Section 3(j) being essentially biological
      processes as there exists significant human intervention. Dr. Singhvi
      very fairly admitted that he was not in a position to support the termination
      of the sub-licence agreement and that the plaintiffs’ claims for licence
      fee/trait value had to be in accordance with the statutory price regime.
      The seeds from the plaintiffs’ patented technology were the highest selling
E     compared to similar other seeds. The plaintiffs have no intention to sue
      any Indian farmer for violation of patent. It was lastly submitted that
      either this Court may remand the entire matter for adjudication of the
      patent issue and infringement or decide the patent issue and then remand
      the suit for other issues.
F            11. Shri Kapil Sibbal contended that a chemical/gene/DNA
      construct is not a plant variety, and is not eligible for protection under the
      PPVFR Act. A gene cannot be a plant variety and it would be denied
      such registration on account of lack of fulfillment of the conditions
      precedent in Section 2(za) read with Sections 14 and 15. A gene cannot
G     be a “plant grouping”, “within a single botanical taxon of the lowest
      rank”, which in simple terms means that it cannot belong to the lowest
      rank of a plant, namely a species. The PPVFR Act came into effect
      from 2007 and in the last 11 years, no infringement action has been filed
      under the same or injunction obtained. The department of bio-technology
      on their official website has acknowledged the role agro-biotechnology
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MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                153
               [NAVIN SINHA, J.]

has to play in feeding billion plus mouths in this country and the role that   A
“novel genes” can play to deal with biotic and abiotic stresses, enhance
productivity and nutritional quality.
       12. Sri Neeraj Kaul submitted that the patented NAS is not the
creation of any biological process. The correct admixture of the promoter,
the man made gene for the production of Cry2Ab endotoxin and the 3 rd          B
component for the production of the transit peptide leading to the DNA
construct, is entirely the creation of the human intervention. The Division
Bench wrongly holds the invention to be a plant variety. It is only plant
varieties and seeds which are covered by the PPVFR Act. The Patent
Act and the PPVFR Act are mutually exclusively.
                                                                               C
       13. Shri Vishwanathan leading the arguments on behalf of the
defendants submitted that no patent rights can be exercised with respect
to genetically modified cotton planting seeds being developed by the
defendants through conventional breeding methods and sold to the
farmers. If the patent rights of the plaintiffs be accepted, then the
regime provided under the PPVFR Act for plant intellectual property            D
with respect to genetically modified plants would be entirely defeated.
The plaintiffs’ claim was essentially of a “breeder” for developing a
variety and therefore its donor seed containing the NAS was registerable
under the PPVFR Act and they were entitled to benefit sharing under
Section 26 after such registration. No patent could be granted in a plant,     E
or part of a plant, under Section 3(j) of the Act. Patent infringement
analysis involves two steps: the proper construction of asserted claims
and the determination as to whether the product infringes the asserted
claim as properly construed. The plaintiffs claim to patent was never
for a chemical sequence in a vial. The plaintiffs’ claimed invention was
only an improvement on prior art where it claimed that it had found a          F
way to have a plant produce a higher level of expression of the endotoxin
protein by localizing it to the plastid thereby reducing insect tolerance
and at the same time producing morphologically normal plants. The
plaintiffs were also precluded from claiming rights onthegenetically
modified Bt. cotton seeds on basis of prosecution history estoppel. The        G
order of the Division bench being based on consent; it is not open for the
plaintiffs to contend to the contrary now.
     14. Shri Datar submitted that the “product” in claim 25-27 for
NAS is a chemical is false, because any chemical that is inserted into a
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154             SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A     plant is not capable of being passed on to the seeds of that plant and to
      the future progeny as the chemical will be metabolized by the plant itself
      and will never be transmitted to its seeds. Further, the NAS, by the
      wording of claims 25-27 itself, is a plant gene which is meant to be an
      inherent, intrinsic and integral part of the plant as it exists at the sub
      cellular level. The cell after transformation with the gene through the
B
      biological process of tissue culture results in a transgenic plant that
      produces seeds having the essential characteristic of these transgenic
      plants. Therefore, claims 25 to 27 even if it represents merely a “gene”
      will manifest as an inseparable and inheritable part of a plant and cannot
      be patented. The NAS gene inserted into the plant becomes an
C     inseparable part of the plant at the sub-cellular level by an irreversible
      biological process. It exists in every cell of the transformed plant. It not
      only expresses in the plant to produce endotoxin but also inherits into
      progeny plants in perpetuity. It does not result in a “product” which can
      be put into a vial and sold as such. The claims must be construed so as
      to give an effective meaning to each of them but the specifications and
D
      the claims must be looked at and construed together.
             15. Shri Jayant Bhushan submitted that the plaintiffs did not bring
      the NAS in a vial and but imported plants seeds containing NAS. These
      seeds were not protected by Patent. Indian seed companies were given
      donor seeds which already had the NAS/Bt. Trait integrated in them
E     and was capable of germination. What the Indian Seed companies do is
      to cross one of the plaintiffs’ plants with the plants of their proprietary
      Indian varieties suitable for cultivation in India, to develop a third/new
      cross-bred cotton variety which would have the Bt. trait from plaintiffs’
      variety so as to resist Bollworm and other traits from their own developed
F     varieties. Since the Indian Seed Companies do not use the NAS in
      isolation nor do they use the method of introducing the NAS into the
      plant through the method described in the patent, there is no infringement
      of the patent. NAS is an essentially biological process in which the
      patented product is neither separately used nor the patented process of
      insertion into a plant is used, the NAS is not being made or used by the
G     Indian Seed Companies. The patent on a gene sequence in a test tube
      cannot negate/undo the important researchers’ and farmers’ rights under
      Sections 30 and 39 of the PPVFR Act. Section 39 relates to Farmer’s
      Rights entitling him to save, use, sow and re-sow his farmed produce
      including a registered variety protected under the Act. It was lastly
H     submitted that if the Court is not inclined to uphold the order of the
MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                  155
               [NAVIN SINHA, J.]

Division Bench, the matter may be remanded to the Division Bench for             A
fresh hearing on the injunction matter because the correctness of the
injunction order dated 28.03.2017 never came to be tested or considered
by the Division Bench.
       16. Shri Divan submitted that that there is no inventive step in the
plaintiffs’ patent claim, until the artificial NAS is inserted into a plant so   B
that the plant starts producing the delta endotoxin which is toxic to the
Bollworms. There is no capability of industrial application of the NAS
except to become part of a plant and to develop a transgenic plant. The
threshold requirements of an invention in terms of the patents Act are
missing until the implant stage. The inventive qualities begin when the
NAS is inserted in a plant cell and not before that stage. Once, the NAS         C
is inserted in a plant cell, the exclusion under Section 3(j) applies and the
PPVFR Act becomes operative.
       17. Shri Venugopal submitted that a conjoint reading of Section
2(j) and Section 3(c) of the Act makes it clear that it excludes patentability
both of transgenic plants (invented through recombinant gene technology          D
in the laboratory) and those invented through conventional breeding
techniques even where a new plant, variety or species is initially created
through genetic manipulation, to the extent that the subsequent production
or propagation of the plant, variety or species is done through “an
essentially biological process”, the biological process would not be             E
patentable under Section 3(j) of the Act. Even if patent exclusion under
Section 3(j) was not applicable, still the patent claim could never permit
plaintiffs to claim the right to prevent farmers from making, using, offering
for sale or selling plants or seeds of the cotton plant that contain Bt.
gene. The patent of an artificial gene and the process for inserting it into
the genome of a plant, will not entitle the exercise of rights under Section     F
48 of the Act in respect of a plant that contains the artificial gene on
which it has a patent. The protection under Section 48 of the Act is
capable of being exercised against other biotechnology companies that
seek to replicate the Bt. gene product or the process of insertion of that
gene in the genome of the cotton plant. Both the Patents Act and PPVFR           G
Act have a link that is to protect the interests of the farmers so that they
are not burdened by exorbitant rates of seeds.
       18. Shri Prashant Bhusan, Shri Sanjiv Sen, and Smt. Anandita
Mitra on behalf of the interveners submitted that the NAS is not “capable
of industrial application” unless it becomes a part of the plant cell where      H
156             SUPREME COURT REPORTS                             [2019] 1 S.C.R.


A     it is expressed by the plant cell through essentially biological processes
      of transcription, translation, and replication, to produce the desired protein.
      The Biodiversity Act which prohibits the “use” of any biological resources
      occurring in India for commercial utilisation and which includes genes
      used for improving crops and livestock through genetic intervention
      necessitates prior permission from the National Bio Diversity Authority
B
      which has not been taken by the plaintiffs. The NAS only adds a trait to
      a plant leading to development of a transgenic variety creating donor
      seeds. The seeds are not patentable under Section 3(j) of the Act though
      the plaintiffs may be entitled for benefit sharing under the provision of
      the PPVFR Act as defined under Section 2(h) of the PPVFR Act. The
C     claim of the plaintiffs has ramifications beyond the immediate parties.
             19. We have considered the respective submissions made on behalf
      of the parties. Though very elaborate submissions have been made
      with regard to facts and the technical processes involved in the patent in
      question, the provisions of the Act, the PPVFR Act and a large volume
D     of case laws for construction of patents, the obligations under the World
      Trade Organisation (WTO), General Agreement on Tariffs and Trade
      (GATT), Trade-Related Aspects of Intellectual Property Rights (TRIPS)
      Agreement, leading to the Patents Amendment Act, 2002 on 25.06.2002,
      in view of nature of the order proposed to be passed, we do not consider
      it necessary to deal with the same at this stage, and leave open all
E     questions of facts and law to be urged for consideration in appropriate
      proceedings.
              20. The patent claims 1-24 are with regard to the processes while
      claims 25-27 are with regard to the chemical product called NAS.
      According to the plaintiffs, the latter was a man-made DNA construct
F     that did not exist in nature and did not otherwise form part of a plant
      existing in nature. The DNA construct was inserted into a plant which
      confers the trait of insect tolerance to the plant. It comprises of three
      different components i.e. (i) A promoter, (ii) A gene for the production of
      Cry2Ab 5-endotoxin and (iii) a third component for the production of a
G     transit peptide. Of these three, Cry2Ab 5-endotoxin is stated to be a
      man-made gene. This nucleic acid sequence is then inserted into the
      cell of the plant at a particular location resulting in the production of “a
      fusion protein” which comprises the Cry2Ab 5-endotoxin 7 bonded with
      transit peptide. The production of a fusion protein is critical in this respect

H
MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                 157
               [NAVIN SINHA, J.]

for the technology to be effected in plants. The bacillus thuringiensis         A
strain does not produce such a fusion protein. It is the plaintiffs’ claim
that it is only its technology that allows a cotton plant to produce the
Cry2Ab 8-endotoxin protected inter-alia by claims 25-27 of the patented
inventions. The subject patent claims the use of Bacillus thuringiensis
strain and development of two genes designated Cry2Aa and Cry2Ab.
                                                                                B
Each gene sequence is known for its ability to synthesize proteins with
pesticidal properties.
       21. It is the contention of the defendants apart from the
unpatentability of the plaintiff’s claim, they have not violated patented
rights, if any, as:
                                                                                C
      “a) Nuziveedu sowed seeds of their proprietary cotton varieties
      alongside the Transgenic Bt. Cotton seed.
      b) The Transgenic Bt. Cotton seed and the Nuziveedu’s varieties
      seed yielded different plants, which were cross-pollinated at the
      flowering stage.                                                          D
      c) The cotton fruits from the Nuziveedu’s cotton varieties had
      cotton seeds, which were carrying the proprietary hybrid (“Bt.
      cotton hybrids”)
      d) Nuziveedu conducted extensive agronomic evaluation trials of
      newly developed Bt. Cotton Hybrids to ascertain their utility to          E
      the farmers.
      e) Nuziveedu obtained the approval of the GEAC under the
      Environment (Protection) Act, 1986 for the commercial release
      of each new Bt. Cotton Hybrid which were considered
      satisfactory after internal evaluation, and thereafter produced in        F
      mass scale and distributed to the farmers.”
       22. Manifestly, the counter claim of the defendants was never
considered by the learned Single Judge as only notice had been issued
on the same. The plaintiffs had preferred an appeal against the nature
of the injunctive relief with regard to the issue of licence fee/trait value,   G
now conceded by the plaintiffs. We see no reason to reject the submission
of Dr. Singhvi that it stands to reason why the plaintiffs would have
consented to a summary adjudication of an existing patent and risk losing
the same without any merit adjudication. The defendants themselves
                                                                                H
158             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A     had contended in their appeal that the issues were complicated requiring
      expert evidence to be considered in a full-fledged trial. The Division
      Bench therefore ought to have confined its adjudication to the question
      whether grant of injunction was justified or unjustified in the facts and
      circumstances of the case. The Division Bench ought not to have
      examined the counter claim itself usurping the jurisdiction of the Single
B
      Judge to decide unpatentability of the process claims 1-24 also in the
      summary manner done. Summary adjudication of a technically complex
      suit requiring expert evidence also, at the stage of injunction in the manner
      done, was certainly neither desirable or permissible in the law. The suit
      involved complicated mixed questions of law and facts with regard to
C     patentability and exclusion of patent which could be examined in the suit
      on basis of evidence.
             23. Section 64 of the Act provides for revocation of patent based
      on a counter claim in a suit. It necessarily presupposes a valid
      consideration of the claims in the suit and the counter claim in accordance
D     with law and not summary adjudication sans evidence by abstract
      consideration based on text books only. The Civil Procedure Code
      provides a detailed procedure with regard to the manner in which a suit
      instituted under Section 9, including a counter claim has to be considered
      and adjudicated. The Code mandates a procedure by settlement of issues,
      examination and cross examination of witnesses by the parties, including
E     discovery/inspection of documents, culminating in the hearing of the suit
      and decree. A suit can be disposed of at the initial stage only on an
      admission inter alia under Order 12 Rule 6 or when the parties are not in
      issue under Order 16 Rule 1 and the other grounds mentioned therein,
      none of which are applicable herein. We are therefore satisfied that the
F     Division Bench ought not to have disposed of the suit in a summary
      manner by relying on documents only, extracted from the public domain,
      and not even filed as exhibits in the suit, much less examination of expert
      witnesses, in the facts of the present case. There is no gain saying that
      the issues raised were complicated requiring technological and expert
      evidence with regard to issues of chemical process, biochemical,
G     biotechnical and micro-biological processes and more importantly whether
      the nucleic acid sequence trait once inserted could be removed from
      that variety or not and whether the patented DNA sequence was a plant
      or a part of a plant etc. are again all matters which were required to be
      considered at the final hearing of the suit.
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MONSANTO TECHNOLOGY LLC v. NUZIVEEDU SEEDS LTD.                                  159
               [NAVIN SINHA, J.]

       24. The manner in which a suit instituted under Section 9 of the          A
Code is required to be dealt with and decided, fell for consideration in
Alka Gupta vs. Narender Kumar Gupta, (2010) 10 SCC 141, observing
as follows:-
      “27. The Code of Civil Procedure is nothing but an exhaustive
      compilation-cum-enumeration of the principles of natural justice           B
      with reference to a proceeding in a court of law. The entire object
      of the Code is to ensure that an adjudication is conducted by a
      court of law with appropriate opportunities at appropriate stages.
      A civil proceeding governed by the Code will have to be proceeded
      with and decided in accordance with law and the provisions of
      the Code, and not on the whims of the court. There are no short-           C
      cuts in the trial of suits, unless they are provided by law. A civil
      suit has to be decided after framing issues and trial permitting the
      parties to lead evidence on the issues, except in cases where the
      Code or any other law makes an exception or provides any
      exemption.                                                                 D
      ……….
      30. But where the summons have been issued for settlement of
      issues, and a suit is listed for consideration of a preliminary issue,
      the court cannot make a roving enquiry into the alleged conduct
      of the plaintiff, tenability of the claim, the strength and validity and   E
      contents of documents, without a trial and on that basis dismiss a
      suit. A suit cannot be short-circuited by deciding issues of fact
      merely on pleadings and documents produced without a trial.
      31. In this case, the learned Single Judge has adjudicated and
      decided questions of fact and rendered a judgment, without                 F
      evidence tested by cross-examination….”
       25. The Division Bench ought to have confined itself to examination
of the validity of the order of injunction granted by the learned Single
Judge only. But we are not inclined to remand the matter for that purpose
to the Division Bench as we are satisfied in the facts and circumstances         G
of the case that the nature of the injunctive relief granted by the Single
Judge was in order and merits no interference during the pendency of
the suit.

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160             SUPREME COURT REPORTS                         [2019] 1 S.C.R.


A            26. The order of the Division Bench is set aside. The order of the
      Single Judge dated 28.03.2017 is restored and the suit is remanded to
      the learned Single Judge for disposal in accordance with law. In view of
      the importance of the question involved, we expect the parties to
      cooperate and facilitate the learned Single Judge in early disposal of the
      suit.
B
             27. The appeals and the intervention applications stand disposed
      of.


      Kalpana K. Tripathy                                      Appeals disposed of.
C




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