Indian Court Favors PepsiCo on Potato Patent for Lay's Chips

The decision ensures that PepsiCo can continue to benefit from the production of Lay's potato chips while also affirming its commitment to collaborating with farming communities.

Thursday, January 11, 2024 9:35 AM UTC

An Indian court has recently overturned the decision that revoked PepsiCo Inc.'s patent for the potato variety used to produce its famous Lay's potato chips. The Protection of Plant Varieties and Farmers' Rights (PPVFR) Authority in India invalidated the intellectual property protection for PepsiCo's FC5 potato variety.

PPVFR cited regulations prohibiting seed varieties from being patented, as per Reuters.

Court Reversal and PepsiCo's Response

PepsiCo swiftly petitioned the Delhi High Court to challenge the ruling. However, in July 2023, Judge Navin Chawla dismissed the appeal. Determined to reinstate its patent, PepsiCo appealed the decision to the same court.

Market Screener reported that in a judgment dated January 9, Judges Yashwant Varma and Dharmesh Sharma of the Delhi High Court overturned the ruling issued in July 2023. PepsiCo welcomed this decision, emphasizing its commitment to working collaboratively with farming communities to ensure mutual benefits and progress.

PepsiCo, which established its first potato chip plant in India in 1989, supplies the FC5 seed variety to local farmers. These farmers, in turn, sell their produce to PepsiCo at a fixed price, forming a symbiotic partnership.

It should be noted that in 2019, PepsiCo filed lawsuits against Indian farmers who cultivated the FC5 potato variety, accusing these farmers of patent infringement. Each farmer faced claims of over 10 million rupees ($120,490) for allegedly violating PepsiCo's patent. However, the company withdrew these lawsuits within months, potentially seeking a resolution outside the courtroom.

PepsiCo's FC5 Potato Variety

PepsiCo said the FC5 potato variety was exclusively developed and registered by the company in 2016. This specific variety has a lower moisture content, making it ideal for snack production, particularly for popular products like potato chips.

PepsiCo is not the only American company to face intellectual property disputes in India. After protracted legal battles, seed maker Monsanto, now owned by German pharmaceutical firm Bayer AG, withdrew from certain business ventures in India.

Photo: PR Newswire