whose Basmati it is? a full case solution

1WHOSE BASMATI IS IT?

BRCM COLLEGE OF BUSINESS ADMINISTRATION

LIBRARY ASSIGNMENT 2013-14

EXPORT MANAGEMENT-II

TYBBA- SEM-VI

DIVISION-II [MARKETING]

TOPIC NAME- A CASE ANALYSIS ON WHOSE BASMATI IT IS?

BY,

115- GANDHI SANI B.

136- MEHTA ROMIL K.

SUBMITTED ON -26TH MARCH, 2014

SUBMITTED TO – MR. OJAS DESAI



What case is all about (Brief Introduction)

In September 1997, an American company RiceTec Inc, a small food technology

company based in Taxes, was granted a patent by the US patent office to call the

aromatic rice variety developed in USA 'Basmati'. RiceTec Inc, had been trying to enter

the international Basmati market with brands like 'Kasmati' and 'Texmati' described as

Basmati-type rice with minimal success. Ultimately, the company claimed to have

developed a new strain of aromatic rice by interbreeding basmati with another variety.

They sought to call the allegedly new variety as Texmati or American Basmati.

RiceTec Inc, was issued the Patent number 5663484 on Basmati rice lines and

grains on September 2, 1997.

This was objected to by two Indian nongovernmental organizations (NGOs) — Centre

for Food Safety, an international NGO that campaigns against biopiracy, and the

Research Foundation for Science, Technology and Ecology, an Indian environmental

NGO who filed legal petitions in the United States. The Centre for Scientific and

Industrial Research also objected to it.

India challenged arguing that Basmati is unique aromatic rice grown in northern India

and not a name Rice tec could claim and only inventions can be patented. Concequently

US patent office accepted accepted India’s basic position and the company had to drop

15 out of 20 claims that it had made. And for remaining claims, Rice tec managed to

evolve three new varieties of rice for which it got patent from United states Patent and

Trademark office (USPTO).

Rice Tec was not handed over Basmati Brand but provided a patent for superior three

strains’ of Basmati developed by cross-breeding a Pakistani Basmati with semi-dwarf

American variety.

According to WTO agreement, geographic indication like Basmati can be protected

legally and their misuse can be prevented. And Indian government was late in taking

such actions.



Question: 1: can any of the following Viz., turmeric, neem and the name Basmati be

patented?

Basically patents are given for new innovations.

Before we go for answering we need to know what is Biopiracy.

Biopiracy is a situation where indigenous knowledge of nature, originating with

indigenous peoples, is used by others for profit, without permission from and with

little or no compensation or recognition to the indigenous people themselves.

Inventions can only be patented if they satisfy three criteria:

Novelty: only inventions that are genuinely new, and not part of existing knowledge,

can be patented.

Non-obviousness: if the new invention is obvious, i.e. anyone familiar with the

subject could easily anticipate the invention, then it cannot be patented.

Utility: the invention has to work in practice.

A. Turmeric

Use: The rhizomes of turmeric are used as a spice for flavouring Indian cooking. It

also has properties that make it an effective ingredient in medicines, cosmetics and

dyes. As a medicine, it has been traditionally used for centuries to heal wounds and

rashes.

History: In 1995, two expatriate Indians at the University of Mississippi Medical

Centre (Suman K. Das and Hari Har P. Cohly) were granted a US patent on use of

turmeric in wound healing. The Council of Scientific & Industrial Research (CSIR),

India, New Delhi filed a re-examination case with the US PTO challenging the patent

on the grounds of existing of prior art. CSIR argued that turmeric has been used for

thousands of years for healing wounds and rashes and therefore its medicinal use

was not a novel invention. Their claim was supported by documentary evidence of

traditional knowledge, including ancient Sanskrit text and a paper published in

1953 in the Journal of the Indian Medical Association. Despite an appeal by the

patent holders, the US PTO upheld the CSIR objections and cancelled the patent. The



US Patent Office revoked this patent in 1997, after ascertaining that there was no

novelty; the findings by innovators having been known in India for centuries.

So we can conclude that Turmeric cannot be patented because turmeric is

being used in India for thousands of the years and therefore unless and until

its new use is not being invented, it can not be patented as it would not be

called invention for which generally patents are given.

B. Neem

Use: Neem extracts can be used against hundreds of pests and fungal diseases that

attack food crops; the oil extracted from its seeds can be used to cure cold and flu;

and mixed in soap, it provides relief from malaria, skin diseases and even

meningitis.

History: In 1994, European Patent Office (EPO) granted a patent (EPO patent

No.436257) to the US Corporation W.R. Grace Company and US Department of

Agriculture for a method for controlling fungi on plants by the aid of hydrophobic

extracted Neem oil. In 1995, a group of international NGOs and representatives of

Indian farmers filed legal opposition against the patent. They submitted evidence

that the fungicidal effect of extracts of Neem seeds had been known and used for

centuries in Indian agriculture to protect crops, and therefore, was unpatentable. In

1999, the EPO determined that according to the evidence all features of the present

claim were disclosed to the public prior to the patent application and the patent was

not considered to involve an inventive step. The patent granted on was Neem was

revoked by the EPO in May 2000. EPO, in March 2006, rejected the challenge made

in 2001 by the USDA and the chemicals multinational, W. R. Grace to the EPO’s

previous decision to cancel their patent on the fungicidal properties of the seeds

extracted from the neem tree.

The use of neem extract, or its seeds or leaves, cannot be patented, since they have

been used for centuries. Its properties can only be patented if they are considerably

modified. For instance, any synthetic variation of a naturally occurring product is

patentable, as it does not occur in nature in that form.



So we can conclude that in neem case also unless and until new usage of neem

is not found out, neem can not be patented because it has been used by Indian

people for various uses since many years and hence unless new use is not

found patenting is not possible because patents are given for some new

inventions.

C. Name Basmati

Many critics of the basmati patent have argued that RiceTec’s use of the name

"basmati" is wrong because only rice grown in northern India and Pakistan can be

termed basmati and no other person or country can use the name Basmati and The

Trade-Related Intellectual Property (TRIPs) Agreement of the World Trade

Organization provides for protection where a given quality or reputation of an item

is attributable to its geographic origin.

Basmati rice, sought-after for its fragrant taste, was developed by Indian farmers

over hundreds of years, but the Texan company RiceTec obtained a patent for a

cross-breed with American long-grain rice.

RiceTec was granted the patent on the basis of aroma, elongation of the grain on

cooking and chalkiness.

Authentic Basmati rice can only be obtained from the northern regions of India and

Pakistan due to the unique and complex combination of environment, soil, climate,

agricultural practices and the genetics of the Basmati varieties.” But in 1998 the US

Rice Federation submitted that the term “Basmati” is generic and refers to a type of

aromatic rice. In response, to a petition filed by the US and Indian civil society

organizations which sought to prevent US-grown rice from being advertised with

the word “Basmati”, the US Department of Agriculture and the US Federal Trade

Commission rejected it in May 2001. It opined that the label “American-grown

Basmati” did not mislead the consumers, and deemed “Basmati” as a generic term.

So we can conclude that Basmati Name cannot be patented because it is a

name given to long rice having good fragrance grown in northern part of India

and Pakistan for thousands of years and according WTO’s agreement



regarding geographic indication which can be protected against misuse hence

Basmati Name is not patentable.

Question: 2: Evaluate the role played by Government of India in preventing the

misuse of the name Basmati.

Answer:

In an official release, the government of India reacted immediately after learning of

the Basmati patent issued to RiceTec Inc., stating that it would approach the US

patent office and urge them to re-examine the patent to a United States firm to grow

and sell rice under the Basmati brand name in order to protect India's interests,

particularly those of growers and exporters.

Furthermore, a high level inter-ministerial group comprising of representatives of

the ministries and departments of commerce, industry, external affairs, Council for

scientific and industrial research (CSIR), Agriculture, Bio-technology, All India Rice

Exporters Association (AIREA), APEDA, and Indian Council of Agricultural Research

(ICAR) were mobilized to begin an in-depth examination of the case.

The contents and implications of the patent are currently being analyzed in

consultation with patent attorneys and agricultural scientists. The government of

India is particularly concerned about the patenting of Basmati because of an earlier

case where the US granted a patent to two Indian-born scientists on the use of

Turmeric as a wound healing agent. This case worked in favor of India because the

patent was subsequently revoked after scientists of (CSIR) successfully challenged

the patenting on the ground that the healing properties of Turmeric had been

'common knowledge' in India for centuries. There is a clause in US patent laws that

will accept any information already available in published or written form

anywhere in the world as 'common knowledge'. As a result, India was able to

furnish published evidence to support their case that the healing characteristics of

Turmeric is not a new invention and as such cannot be patented.



According to the Economic Times of India, the law firm of Sagar and Suri who won

the Turmeric patent case and presently representing the government against

RiceTec Inc. in existing cases, said; "RiceTec has got a patent for three things:

growing rice plants with certain characteristics identical to Basmati, the grain

produced by such plants, and the method of selecting the rice plant based on a

starch index (SI) test devised by RiceTec Inc." The lawyers plan to challenge this

patent on the basis that the above mentioned plant varieties and grains already exist

and thus cannot be patented. In addition, they encountered some information from

the US National Agricultural Statistics Service in its latest Rice Year book 1997,

released in January 1998, which states that almost 75 percent of US rice imports are

the Jasmine rice from Thailand and most of the remainder are from India and

Pakistan, “varieties that cannot be grown in the US" This piece of information is

rather interesting and can be used as a weapon against the RiceTec Basmati patent.

In June 2000 Agriculture and Processed Food Products Development Authority

(APEDA) Under the Ministry Of Commerce filed a re-examination application

contesting 3 claims of the patent. So. Company withdrew its claims on 4 points that

relate to trade of Basmati. INDIA WON THE CASE BASED ON EOGRAPHICAL

INDICATIONS DURING JUNE 2000!

For years, India largely ignored any claim or legal protection for growers and

marketers of basmati. A bill has been introduced to recognize produce as belonging

to a specific geographical area, but it is still pending before a panel of the

Parliament. Given that basmati is not patented by geographic location even within

India, the country's international patent appeal appears weak.

For over two decades ''basmati'' has been used in the United States to describe long-grain aromatic rice grown domestically. This usage went unchallenged by India, so much so that the patent claims were under the plea of ''long usage'' provided for in trade-related intellectual property rights.Ricetec claims that India felt posed a threat to Indian basmati exports to the United States. In hundreds of pages of scientific evidence, India



argued that its basmati varieties already had the characteristics claimed as unique by Ricetec.And india won the case and Ricetec has to withdraw his 15 claims out of 20 but it is

always questionable that whose basmati it is?

So we can evaluate government role as fair enough for protecting the name basmati

because government immidiatly reacted against it, made a committee and took help

from those who have already experienced same in case of turmeric and they also

prevented patent of basmati through APEDA under ministry of commerce through

re-examination and finally won the case based on EOGRAPHICAL INDICATIONS

during JUNE 2000.


whose Basmati it is? a full case solution

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