Intellectual property is the arms race of the 21st century. So, it comes as no shock that PepsiCo, one of the biggest companies in the world takes this kind of interest in what potatoes four farmers in a small village Deesa in Gujarat grow.
This entire incident is nothing short of a suspense-thriller episode out of the Blacklist. PepsiCo apparently got tipped about the sale of its proprietary varieties of potatoes in a wholesale vegetable market in Gujarat. The local office then hired a detective agency to check these allegations which ended up with a private investigator sent to there farms disguised as a buyer. That investigator then ended up taking photographic evidence of the said farmers actually growing the exact proprietary variety, limited to two four farms.
That is what made the entire thing suspicious for PepsiCo. The fact that the special variety FC-5 in question was growing only in the farms of the two farmers and there was no overlap with any other farm in the area, no cross-pollination or such. Armed with the investigator’s report the in-house counsel then decided to warn them of the infringement which they refused and alerted the Bharatiya Kisan Sangh about harassment at the hands of PepsiCo. The Sangh at that point took it upon themselves to stand against PepsiCo and issued statements in support of the farmers to the media. That’s when media got thoroughly involved in the matter.
At this point, PepsiCo’s representatives at a US-based firm decided to sue the farmer duo in court. While PepsiCo had previously filed complaints against agriculturists in Gujarat, this was the first time that individual farmers were mentioned.
PepsiCo claimed proprietary rights to grow registered FC-5 potatoes since 2016
Throughout this entire debacle, PepsiCo’s stock prices have not faced any major consequence. After all, only its franchises like Varun Beverages are listed in India. With the international community not particularly interested in these series of events, PepsiCo has been going steady at Nasdaq.
The company has played this entire thing on the front foot. As soon as news about the infringement came to light and media got involved PepsiCo dominated the airwaves. It was made pretty clear that they believed they had the rights to grow this particular variety of potato in India since 2016. The regulated proprietary potatoes that the company uses for its Lays line of chips was developed under their own R&D division. They apparently have spent quite a lot of money on developing this particular kind of potatoes and they believe it to be rightly theirs. Having said that, one cannot really expect to believe that all farmers would be aware of this and grow the crop that exists only in the public domain.
There is an obvious infringement issue if PepsiCo holds all the necessary rights to the product in question. However, that is irrelevant if the regulations are enforced appropriately. Having said that proper investigations need to be undertaken.to see whether there was any malicious intent on the farmers part in which case it makes sense to prosecute them. However, if they genuinely made a mistake of planting a crop that they believed to be profitable and nothing else, then stop now.
Where does PepsiCo stand with the Gujarat farmers right now?
Out of the three cases filed against the farmers, one has been withdrawn. The Gujarat Government is holding talks with PepsiCo to resolve the entire issue. However, the farmers and Bharatiya Kisan Sangh are not particularly happy about it. They believe that PepsiCo’s back-channel handling of this issue is going to end up with them losing their rights.
PepsiCo was dealt with a major blow when activists in India sided with the farmers right to grow whatever they wished and their own opinions of proprietary rights were met with harsh criticism. India today, grew out of a green revolution. It is not possible to separate farmers from growing the crops they want to. That’s not how things go.
As far as the rights of multinational corporations go, unless PepsiCo was wronged, they should not have the right to make cases against individual farmers who are just looking to feed their families.
Hopefully, the issue will be resolved soon with the Central Government stepping in but no headway is expected to be made until the incumbents have dealt with the elections. We will keep you updated with any and all changes made in the upcoming weeks regarding this infringement issue.