PepsiCo India vs. Farmers: A Tale of David and Goliath
Never a dull day in the world of IP. Let’s talk about the PepsiCo India vs. Lays debacle. In April of 2019, the colossus PepsiCo India sued nine Indian farmers for cultivating the FC5 potato variety which is grown purely to make the much-loved Lays potato chips. The company accused the farmers of patent infringement. What makes these potatoes so special, right? Well, it’s because the FC5 potatoes contain significantly less moisture than the average Joe potato.
PepsiCo India’s legal team would likely have shattered their opposition in court. However, after learning that they sued the farmers for a stupefying $142,840, PepsiCo’s head and Asia-Pacific offices stepped in.
Following the mediation, PepsiCo India formally withdrew the lawsuit. They reached an out-of-court settlement.
The farmers either be prohibited from growing the patented potatoes and must demolish all existing stock or sign a joint farming agreement with PepsiCo India and sell the existing stock to the company.
The Law isn’t a Suggestion
What‘s truly baffling is the fact that conglomerate PepsiCo took the farmers to court. As per Indian law, patenting plants isn’t even permitted. This then raises the question of why there aren’t any agricultural laws implemented. Well actually, there is The Protection of Plant Variety and Farmers Right Act, 2001.
Dr. M.S. Swaminathan, one of the bill’s architects, stated on the subject that the law is clear and that royalties have no standing. He stated in an email to Mongabay-India, a conservation, and environment news center, that the “Plant Variety Protection and Farmers‘ Rights Act is the first one in the world which confers equal rights to farmers for their contribution to conservation and to breeders for converting genetic material into a commercial variety.”
PepsiCo continued on to file a lawsuit with the total absence of legal standing. It’s probably because originally, agriculture was outside the scope of intellectual property law. However, when PepsiCo sued, the law was very much unambiguous in the area of agriculture.
Ultimately, though, the farmers, like David, came out victorious. This just goes to show that intellectual property law, if implemented and exercised, holds tremendous influence.
