On Thursday, May 2, PepsiCo withdrew its lawsuit against potatoes farmers in India, who were allegedly violating its patents. Pepsi and the farmers were in a legal dispute over the right to farm FC5 potatoes, a variety covered by a patent. The Gujarat government intervened and is brokering an out-of-court settlement between the two parties.
After discussions with the government, the company has agreed to withdraw [the] cases against farmers. We are relying on the said discussions to find a long-term and an amicable resolution of all issues around seed protection, said a PepsiCo India spokesperson, according to the Wire.
PepsiCo is now working with the Gujarat government to arrive at a settlement. NDTV reports that the multinational company is willing to settle on the condition that the farmers promise not to use the FC5 seeds again.
The Ahmedabad court will hear this case again on June 5.
PepsiCo files suit against Indian farmers
In April, PepsiCo India filed a civil suit against nine farmers in Gujarats Sabarkantha and Aravalli districts for infringing on their patent rights.
The company claimed that the farmers were growing the FC5 variety of potatoes that can thrive in low-moisture conditions and was registered under Plant Variety Protection (PVP) rights in 2016. These potatoes are used in Lays chips, one of the most successful products made by PepsiCo.
However, the farmers said they did not wilfully infringe on any patents.
I dont know what I did wrong. I didnt go and ask for a Pepsi seed. We mix seeds between farmers, somehow, some of the FC5 seeds would have come to my field. But I dont know how, farmer Hari Patel told the Wire.
PepsiCo was demanding Rs. 1.05 crore from four farmers and Rs. 20 lakh from the remaining five.
Also read: Lay off my potatoes: What’s behind PepsiCo’s bizarre lawsuits against Indian farmers
Backlash against PepsiCo
Towards the end of April, Gujarat Deputy Chief Minister Nitin Patel said that the state government will support the farmers cause. NDTV reports that politicians from both sides of the aisle, activists, and 192 farmer organisations, including the Bharatiya Kisan Singh, an associate of the RSS, called on PepsiCo to withdraw its lawsuit.
PepsiCos Asia-Pacific head office was concerned about its Indian counterparts decision to file a lawsuit, especially once criticism mounted against the company.
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, said an executive of PepsiCo to Business Today.
190 activists also wrote to the Union Ministry of Agriculture asking for legal and financial aid for the farmers. They also asked the government to pressure PepsiCo to withdraw these false cases against farmers who do not have the means to fight back.
The Hindu reported that by suing these farmers, PepsiCo is trying to set a precedent in the Indian agriculture industry.
This was done to protect our rights and safeguard the larger interest of farmers who are engaged with us, and who are using and benefitting from seeds of our registered variety, said a PepsiCo India spokesperson.
However, critics say that if this case ends in favour of PepsiCo, the ruling could spell financial disaster for the farmers.
PepsiCos argument is entrenched in intellectual property (IP) rights, an area of Indias legal framework that has recently been criticised by the United States Trade Representative (USTR).
The USTR released its Special 301 report that placed India on the Priority Watch List of countries with lax IP regulations that adversely impact American businesses.
However, the USTR said that it was hoping to engage in bilateral talks with India and come to a mutually beneficial solution.
Rhea Arora is a Staff Writer at Qrius