[co-authors: Stefaan Meuwissen , Jonathan Liang]
China's IP Court of Appeal has recently handed down an important and long-awaited judgment in the SanHong pomelo Plant Variety Right ("PVR") infringement case. The judgment sheds light on how to determine the scope of protection of PVRs in China, by clearly delineating the concept of 'propagating material', protected under a PVR, and distinguishing it from 'harvested material', which is currently not protectable by PVRs in China. The Court also clarifies other key concepts such as whether merely growing a plant protected by a PVR may constitute an infringement, and how sales of harvested material that also constitute propagating material (e.g. a fruit containing seeds) must be handled.
Case Background
The facts of the case were as follows: Cai Xinguang (the "PVR owner”) had brought a civil PVR infringement procedure before the Guangzhou IP Court against supermarket chain Guangzhou Runping Co. Ltd (the “supermarket chain”), based on the supermarket chain’s large sales volumes of the SanHong pomelo (三红蜜柚), protected by a PVR, without a license.
In first instance, the Guangzhou IP Court had rejected the PVR owner’s claims in March 2019. The PVR owner appealed this decision to China's IP Court of Appeal (set up within the Supreme People's Court), which handed down its speedy appeal decision only nine months later, in December 2019.
The judgment
In its judgment, the IP Court of Appeal reiterated that according to article 28 of the Seed Law and article 6 of the PVR Regulations, a PVR entitles its owner to the exclusive right over the propagating material of a PVR. Conversely, harvested material by itself is in principle not protected by a PVR in China.
In this case, the PVR owner claimed that although the SanHong pomelo variety is normally grown from grafts and not from seed, the pomelos themselves, sold by the supermarket chain, also constituted protected propagating material, since the SanHong variety could also be grown from the seeds within the fruits, or even from the fruit tissue of the pomelos through tissue cultivation.
In order to assess this issue, the IP Court of Appeal set out three essential biological requirements for plant material to be considered propagating material:
- the material must be alive;
- the material must be capable of consistently propagating the variety; and
- the material must be capable of producing a plant with the same characteristics as the protected variety.
The Court hereby also explicitly rejected the argument of cell totipotency(1), relied on by the PVR owner, because that would lead to the undesirable result that potentially all plant material would be protectable under a PVR as propagating material.
In this case, based on several court expert opinions delivered to the Court, the Court held that not all seeds or tissue of the pomelos could be used to consistently propagate SanHong pomelo plants, and that, even where this was possible, the plants did not consistently possess the characteristics of the protected variety.
On the basis of the above, the Court held that the pomelo fruit sold by the supermarket chain did not meet the requirements of the abovementioned three-step test, and therefore did not constitute protected propagating material under the PVR. On the basis of this reasoning, the Court confirmed the Guangzhou IP Court’s first instance decision, and rejected the appeal by the PVR owner.
Takeaways
This case is a milestone case in PVR field, as it clearly delineates the concept of propagating material through the three-step test of biological requirements for propagating material. However, the Court also provided guidance on two other issues that are of great importance to PVR practice.
The first of these issues is how to assess cases where plant material constitutes both protected propagating material and unprotected harvested material (e.g. in the case of fruits containing seeds). In this case, the Court held that the seller /user’s intention with the sales/use is crucial: was the material sold or to be used as propagating material (e.g. pomelos with seeds to grow new plants) or as harvested material (e.g. pomelos for final consumption as an edible fruit, as was the case here). If the material was sold or to be used as propagating material, the material must be considered as such for the infringement assessment.
Secondly, the Court also clarified that the act of ‘growing’ a certain protected plant variety to obtain unprotected harvested material (e.g. farmers growing certain fruit trees, protected by a PVR) is not a neutral ‘use’ act to obtain unprotected harvested material, but instead constitutes the infringing act of producing the propagating material of such PVR. This is a very important clarification of the law for PVR owners, especially when faced with large-scale growers of protected plant varieties destined for human or animal consumption.
Next Steps
With the SanHong judgment, the IP Court of Appeal has set the record straight on a variety of issues concerning PVRs in China, which will have important practical consequences.
Going forward, it is likely that a new consultation draft of the PVR Regulations will be issued in the second half of this year. Noting that the last draft version contained important changes, such as proposing to extend protection to harvested materials under certain conditions, PVR owners need to monitor these developments closely, and we will publish an analysis of the new draft here as soon as it becomes available.
For further questions or to receive the full text of the judgment, please reach out to our contacts listed in this article.
Authored by Stefaan Meuwissen and Jonathan Liang
(1) According to which a single cell of a certain plant can divide into further cells and produce all of the differentiated cells in a certain plant, allowing to propagate a plant by replicating the DNA sequence from one of its cells.
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