The humblest of foods has spawned the ultimate David and Goliath lawsuit.
PepsiCo $PEP, Inc. (PEP), a major international corporation, is suing four farmers in India for patent infringement. The company’s Indian subsidiary claims that the growers are cultivating its proprietary FC5 potatoes, which are designed to be lower in moisture than other spuds, without permission. “In this instance, we took judicial recourse against people who were illegally dealing in our registered variety,” a PepsiCo India spokesman told Reuters.
The giant has demanded Rs10 million, or about $142,000, from each allegedly infringing farmer. It’s a steep demand for the defendants, who all have small, independent farms in the state of Gujarat, a leading potato-production region.
The farmers are fighting the case. “We have been growing potatoes for a long time and we didn’t face this problem ever, as we’ve mostly been using the seeds saved from one harvest to plant the next year’s crop,” Bipin Patel, one of the defendant farmers, told Reuters. The farmers have not explained how they came to grow these special spuds.
At a hearing in court on April 26, Pepsi offered to settle the matter. “Either join us or grow other potatoes,” a company spokesman told CNN Business. “That way, we are willing to let go of the case.” The corporation has licensing deals with other farmers in Gujarat, providing them with FC5 potato seeds, which are grown only for Pepsi’s use in Lay’s potato chips. The company argues that it must police its intellectual property in order to protect the cultivators who have entered into legal agreements to grow the unique tubers.
But not everyone wants the cultivators to settle with the corporation. The growers have a lot of local support, and congress leader Ahmed Patel has called Pepsi’s lawsuit “ill advised and brazenly wrong.”
Some Indian agricultural activists argue that the intellectual property lawsuit filed by Pepsi amounts to illegal bullying. They accuse Pepsi of sending private detectives posing as potential buyers to farms and secretly recording video, as well as sampling their potatoes. “We believe that the intimidation and legal harassment of farmers is happening because farmers are not fully aware of [their] rights,” the activists wrote in a letter sent to the government and reported by CNN Business.
Indian agricultural laws protect the farmers’ rights to grow and sell registered crops, according to the All India Farmers’ Forum (AIFF). It says Pepsi’s case violates the Protection of Plant Varieties and Farmers Rights Act of 2001, which allows farmers to “save, use, sow, resow, exchange, share or sell his farm produce including seed of a variety” so long as they do not sell branded seed. In a press release, AIFF demanded that Pepsi immediately withdraw its lawsuits and “apologize to the peasants of India.”
Additionally, the AIFF promised to mobilize workers around the nation if Pepsi doesn’t comply with its demands. The release states, “The future of the country will be determined through the growing resistance of the working class and peasantry against these corporates.” It has also called for a nationwide boycott of all Lay’s products.
The farmers’ lawyer asked for time to consider Pepsi’s join-us-or-perish offer, and the parties are expected to return to court on June 12.
