In a significant victory for Indian farmers, the Delhi High Court recently upheld a 2021 order that resulted in the revocation of PepsiCo India’s alleged patent for a specific potato variety used in Lay’s chips. The court also invalidated the intellectual property protection granted to PepsiCo.
The legal battle between PepsiCo India and farmers’ rights activist Kavitha Kuruganti began in 2019 when the company sued a group of farmers in the state of Gujarat for growing the FL 2027 potato variety, also known as FC5, claiming infringement of its intellectual property rights.
The case gained widespread attention when the snacks and beverages giant sued the farmers and initially sought $121,050 from each farmer for alleged patent infringement.
In response, Kuruganti wrote a letter to the Protection of Plant Varieties and Farmers’ Rights Authority (PPVFRA) accusing PepsiCo of hiring a private intelligence firm to pose as potential buyers and survey the fields of certain potato farmers in Gujarat.
PepsiCo India argued that independent farmers in the state were growing the FL 2027 variety, which they discovered through testing. The company had filed individual petitions in the Ahmedabad civil court to stop the farmers from cultivating that type of potato.
Following backlash from lawmakers and farmers, PepsiCo withdrew the legal cases in 2019 and expressed its intention to resolve the issue amicably. However, Kuruganti subsequently petitioned the PPVFRA to revoke PepsiCo’s intellectual property rights for the FC5 potato variety, citing Indian laws that do not allow patents on seeds.
The FL 2027 potato variety was developed in 1996 by a plant breeder working with PepsiCo’s division, Frito-Lay Agricultural Research. Since then, the company has been producing and selling Lay’s potato chips using this variety.
The FL 2027 potato has lower moisture content compared to other potato varieties, making it ideal for snack production. Regular potatoes with higher moisture content can result in increased dehydration and energy costs during the chip manufacturing process, while the high sugar content in regular potatoes can cause them to darken when fried.
PepsiCo established its first potato chips plant in India in 1989 but began developing and registering various potato varieties in the country after experiencing production setbacks in 2008. The FC5 variety, registered as FL 2027, was commercially used starting in 2009, and PepsiCo granted select farmers in Punjab permission and seeds to grow this variety.
As of last year, PepsiCo reportedly worked with thousands of farmers in around 10 Indian states through contract cultivation at fixed prices.
Under the PPVFRA Act, potatoes are among the crop species eligible for intellectual property rights protection. PepsiCo India obtained a certificate of registration for the FL 2027 variety in 2016, which granted exclusive authority over the potato variety for a specific period.
However, in February 2022, the PPVFRA rejected PepsiCo’s application for renewal of the registration, leading the company to file an appeal with the Delhi High Court in May 2022.
In a recent court order, the Delhi High Court upheld the PPVFRA’s decision to revoke PepsiCo’s registration based on a technicality. The company had initially applied to register FL 2027 as a “new variety” but failed to meet the novelty requirement. The court determined that the certification was obtained based on incorrect information provided by the applicant.
PepsiCo India responded to the court order, stating that the revocation was primarily due to procedural infirmities in the application and supporting documents. The company is currently examining the order to determine its options.
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