Farmers' rights, benefit sharing, compensation, compulsory licence, infringement and the National Gene Fund - Intellectual Property Rights II

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1. Farmers rights: section 39
2. Benefit sharing: section 26
3. Compensation to communities: section 41
4. Compulsory licence: sections 47 to 53
5. Infringement and relief: sections 64 to 67
6. National Gene Fund: section 45
7. Problem
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

What makes the Indian law different. A farmer in India may save, sow, exchange and even sell seed of a protected variety, so long as it is not branded seed, and cannot be held liable for infringement he did not know of. Breeders must share benefits with those whose material they used and may be ordered to compensate communities and farmers. These are the provisions examiners ask about most.

1. Farmers’ rights: section 39

Notwithstanding anything else in the Act:

(i) As breeder. A farmer who has bred or developed a new variety is entitled to registration and protection like any breeder.
(ii) Farmers’ varieties may be registered on a declaration that the genetic material was lawfully acquired.
(iii) Recognition and reward. A farmer engaged in conserving genetic resources of land races and wild relatives of economic plants and improving them by selection and preservation is entitled to recognition and reward from the Gene Fund, if the material has been used as a donor of genes in registrable varieties.
(iv) Seed. A farmer may save, use, sow, resow, exchange, share or sell his farm produce including seed of a protected variety as he could before the Act, but may not sell branded seed, that is, seed put in a package or container and labelled to indicate that it is of a protected variety.

Other provisions complete the scheme:

Compensation for failed seed (section 39(2)). A breeder selling propagating material to farmers must disclose its expected performance under given conditions; if it fails to perform, the farmer may claim compensation before the Authority, which may direct the breeder to pay after hearing him.
Innocent infringement (section 42). A farmer who was not aware of the right is not deemed to infringe, and no relief or prosecution lies against a farmer who proves lack of awareness.
Exemption from fees (section 44) in proceedings before the Authority, the Registrar and the High Court.
Consent for derivation (section 43) from farmers whose variety is the initial variety of an EDV.
Disclosure of the use of material conserved by tribal or rural families (section 40).

The PepsiCo dispute shows section 39(iv) at work. In 2019 PepsiCo sued potato farmers in Gujarat for growing its registered variety FL-2027 and claimed crores in damages. The suits were criticised as contrary to section 39 and were withdrawn, and in 2021 the Authority revoked the registration itself (see the registration note).

2. Benefit sharing: section 26

On registration, the Authority publishes the certificate and invites claims for benefit sharing.
Claims may be made by Indian citizens, or firms or governmental or non-governmental organisations formed in India, and the breeder may oppose them.
After hearing, the Authority fixes the amount, considering the extent and nature of the use of the claimant’s genetic material in developing the variety and the commercial utility and market demand for the variety.
The breeder deposits the amount in the National Gene Fund, from which it is paid to the claimant. It is recoverable as an arrear of land revenue.

3. Compensation to communities: section 41

Any person, group or governmental or non-governmental organisation may, on behalf of a village or local community, file a claim at a notified centre attributable to the community’s contribution to the evolution of a registered variety. If the centre finds that the community contributed significantly, it reports to the Authority, which, after hearing the breeder, may award compensation within limits notified by the Central Government. The breeder deposits it in the Gene Fund, and it is recoverable as an arrear of land revenue. The difference from section 26: benefit sharing rewards a contributor of genetic material, while section 41 compensates a community for its role in evolving the variety.

4. Compulsory licence: sections 47 to 53

When (section 47). At any time after three years from the certificate, any interested person may apply alleging that the reasonable requirements of the public for seed or propagating material have not been satisfied, or that it is not available at a reasonable price.
Procedure. The Authority, after consulting the Central Government and hearing the breeder, may order him to grant a licence on terms it fixes, and the licensee is registered under section 28(4).
Factors (section 48). The nature of the variety, the time since registration, the price of seed, the measures taken by the breeder or licensee to meet demand, and the capacity and competence of the applicant.
Adjournment (section 49). Up to twelve months in aggregate if the breeder shows a reasonable cause for inadequate production and has taken immediate measures.
Duration (section 50) is fixed case by case but cannot exceed the remaining term; the licensee is given reproductive material from the National Gene Bank.
Terms (section 51). Reasonable compensation to the breeder, and assurance that the licensee can supply seed to farmers in time and at a reasonable price. A compulsory licence does not authorise import.
Revocation and modification (sections 52 and 53) for breach of terms or in the public interest. Failure to supply seed to a compulsory licensee is also a ground for revoking the breeder’s own registration (section 34(e)).

5. Infringement and relief: sections 64 to 67

Infringement (section 64). A right is infringed by a person who, not being the breeder or a registered agent or licensee:

sells, exports, imports or produces the registered variety without the breeder’s permission, or outside the scope of a registered licence or agency; or
uses, sells, exports, imports or produces any other variety under a denomination identical with or deceptively similar to that of a registered variety, so as to cause confusion.

This is subject to the farmers’ and researchers’ rights in sections 39 and 30, and section 74 says nothing permitted by the Act is an offence.

Suit (section 65). Not in any court inferior to a District Court having jurisdiction, meaning the court within whose limits the cause of action arises.

Relief (section 66). An injunction and, at the plaintiff’s option, damages or a share of the profits. The injunction may be ex parte or interlocutory and may provide for discovery of documents, preservation of infringing material and evidence, and attachment of the defendant’s property to secure the eventual award. The court may appoint an independent scientific adviser (section 67).

Offences (sections 70 to 73). Applying a false denomination or a false name of country or breeder: three months to two years, or fine of fifty thousand to five lakh rupees, or both. Selling varieties with a false denomination: six months to two years, or the same fine, or both. Falsely representing a variety as registered: six months to three years, or fine of one to five lakh rupees, or both. A subsequent offence: one to three years, or fine of two to twenty lakh rupees, or both.

6. National Gene Fund: section 45

Credited with: benefit sharing received from breeders; the annual fee payable by way of royalty under section 35(1); compensation deposited under section 41(4); and contributions from national and international organisations.

Applied for: paying benefit sharing under section 26(5); paying compensation under section 41(3); supporting the conservation and sustainable use of genetic resources, including in situ and ex situ collections, and strengthening the capability of Panchayats in such conservation; and schemes for benefit sharing under section 46. The Plant Genome Saviour Community and Farmer awards are paid from it under the Gene Fund rules.

7. Problem

A farmer bought seed of a registered wheat variety, saved part of his harvest, and sold it to neighbouring farmers in plain gunny bags. He also packed some in printed bags bearing the variety’s name and sold them in the market. The breeder sues. Advise.

Issue. Whether either sale infringes the breeder’s right under section 28.

Law. Sections 28, 39(1)(iv), 42 and 64 of the PPV&FR Act, 2001.

Application. Selling a registered variety without permission is infringement under section 64(a), but section 39(1)(iv) applies “notwithstanding anything contained in this Act” and lets a farmer save, exchange, share and sell farm produce including seed. The sales in plain bags are protected. The sales in printed bags labelled with the variety name are sales of branded seed, which the proviso excludes; they infringe, and using the registered denomination may also amount to applying it without authority under section 68. If the farmer shows he did not know of the registration, section 42 bars relief against him.

Conclusion. The breeder can obtain an injunction and damages or a share of profits only for the branded sales, in a District Court, unless the farmer proves innocence under section 42.

How this is examined

January 2026 set “Benefit sharing” and “Compulsory licence of plant varieties” as short notes and asked for the protection available for plant varieties and farmers’ rights; June 2025 “remedies against infringement”; February 2025 “National gene fund” and “Farmer’s Rights”. Each maps onto a section above. For the 10-mark question on protection, combine section 28 from the registration note with sections 1 to 3 here.