April 26, 2019 / 1:22 PM / 3 months ago

PepsiCo sues four Indian farmers for using its patented Lay's potatoes

AHMEDABAD/NEW DELHI (Reuters) - PepsiCo Inc has sued four Indian farmers for cultivating a potato variety that the snack food and drinks maker claims infringes its patent, the company and the growers said on Friday.

A customer picks packets of Lay's potato chips at a shop in Ahmedabad, India, April 26, 2019. REUTERS/Amit Dave

Pepsi has sued the farmers for cultivating the FC5 potato variety, grown exclusively for its popular Lay’s potato chips. The FC5 variety has a lower moisture content required to make snacks such as potato chips.

The company is seeking more than 10 million rupees ($142,840) each for alleged patent infringement.

The farmers grow potatoes in the western state of Gujarat, a leading producer of India’s most consumed vegetable.

“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,” said Bipin Patel, one of the four farmers sued by Pepsi.

Patel did not say how he came by the PepsiCo variety.

A court in Ahmedabad, the business hub of Gujarat, on Friday agreed to hear the case on June 12, said Anand Yagnik, the farmers’ lawyer.

“In this instance, we took judicial recourse against people who were illegally dealing in our registered variety,” a PepsiCo India spokesman said.

“This was done to protect our rights and safeguard the larger interest of farmers that are engaged with us and who are using and benefiting from seeds of our registered variety.”

PepsiCo, which set up its first potato chips plant in India in 1989, supplies the FC5 potato variety to a group of farmers who in turn sell their produce to the company at a fixed price.

The company said the four farmers could join the group of growers who exclusively grow the FC5 variety for its Lay’s potato chips.

“PepsiCo India has proposed to amicably settle with the people who were unlawfully using the seeds of its registered variety. PepsiCo has also proposed that they may become part of its collaborative potato farming programme,” the company spokesman said in a statement.

If the farmers do not wish to grow the FC5 potato variety for PepsiCo, they can simply sign an agreement with the company to cultivate other available varieties, he added.

The All India Kisan Sabha, or All India Farmers’ Forum, has asked the Indian government to protect the farmers.

The forum has also called for a boycott of Lay’s chips and PepsiCo’s other products.

The Ministry of Agriculture & Farmers’ Welfare did not immediately respond to an email seeking comment.

PepsiCo is the second large U.S. company to face patent infringement issues in India.

Stung by a long-standing intellectual property dispute, seed maker Monsanto, now owned by German drugmaker Bayer AG, withdrew from some businesses in India over a cotton-seed dispute with farmers, Reuters reported in 2017. (reut.rs/2ncBknn)

($1 = 70.0080 rupees)

Reporting by Amit Dave in AHMEDABAD and Mayank Bhardwaj in NEW DELHI; Editing by Martin Howell, Louise Heavens and David Goodman

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