Page 21 - A&A Patents&Design Rewind-2016

CAP ON ROYALTY LEVIED BY COMPANIES

LICENSING GM TECHNOLOGY
The Ministry of Agriculture and Farmers
Welfare published and notified the licensing request. If the Licensor does not grant a License
and formats for Genetically Modified (GM) within a month of the request by the requesting
eligible seed company, the license shall be deemed

technology agreement guidelines, 2016 in May to have been obtained.

2016. As per the preamble, the guidelines have

been published in order to provide an effective The notification specified that companies licensing

system for fixation of maximum sale price of GM technology could charge seed companies

cotton seeds to ensure their availability to the royalty no more than 10% of the government-

farmers at uniform, fair, reasonable and affordable specified maximum sale price of a packet of cotton

prices. The guidelines, in particular, aim at ensuring for 5 years. Moreover, they are required to reduce

access of GM Traits to all seed companies without this value by 10% every year starting sixth year and

any restraint and at the same time biotech trait if proved that the potency of the technology was

The notification specified that companies waning, the company could not claim this royalty.
licensing GM technology could charge seed The notification also provided a no charging of
companies royalty no more than 10% of upfront fees from domestic seed companies
the government-specified maximum sale which may have already paid said fee in the past.
price of a packet of cotton for 5 years. Further, the notification also capped the upfront
fees at rupees twenty five lakhs for new licensing
agreements.

development being adequately rewarded under These guidelines which lay down rules akin to
the Fair, Reasonable and Non-Discriminative compulsory licensing of cotton seeds were met
mechanism (FRAND mechanism). with a huge uproar by crop research majors.
Within a short span of two days post publication,
These guidelines specify criterion for one to become the guidelines were withdrawn and republished as
a Licensor or a Licensee and the compulsory format Draft Guidelines inviting comments from the public
in which these Agreements should be entered into. within 90 days of notification of the Draft.
Every Licensor is mandated to grant a license for
the Genetic Engineering Appraisal Committee The guidelines can be accessed at:
(GEAC) approved GM Trait to any eligible seed http://egazette.nic.in/WriteReadData/2016/169713.
company within thirty days of receiving such a pdf

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