Monsanto : royalty income to take a hit

The Delhi High Court made an announcement on Tuesday in favour of India's largest seed producer company, Nuziveedu Seeds Ltd. on a petition filed by Monsanto over claims of an alleged patent infringement.

Mahyco Monsanto Biotech (MMB) is the U.S. company's joint venture which dragged Nuziveedu Seeds Ltd. to court in 2015, claiming patent violation. Further it accused Nuziveedu Seeds Ltd. for using Monsanto's technology even after MMB had cancelled its licensing contract.

On Tuesday the Delhi High Court ruled that the contract should never have been terminated in the first place and said it must be restored.  Monsanto was ordered to restore a licensing agreement and cut royalty charges. It also stated that royalty charges agreed as per the original contract must be reduced as per the changes done in Indian government policy last year.

Under the contract, Nuziveedu Seeds made genetically modified cotton seeds using Monsanto technology.

Monsanto had sued Nuziveedu and group companies, Prabhati Agri Biotech Ltd and Pravardhan Seeds Pvt Ltd for selling cotton seeds with bollgard technology in 2015, citing non-payment of Rs 165 crore in dues.

MMB markets the seeds directly, though the local licensees together having command of 90% of the market. Local seed comapnies have filed complaints against MMB that it is charging high fees. One committee was created to handle this matter. The committee has now recommended a cut of 70% in royalty fees, that the seeds companies pay to MMB. This decision can affect the company's revenue. MMB does not publish revenue figures or say how much it contributes to Monsanto's overall revenue.

The government-appointed committee has also recommended cutting Bt cotton seed prices to about 800 Rs. for a packet of 400 grams. Currently Bt cotton seeds are being sold in the range of 830-1100 in different parts of the country.