Highlights of the Latest Judicial Interpretation of Disputes over New Plant Variety Rights
Lusheng Press Editor
14 Jul 2021
The <Several Provisions (II) of the Supreme People's Court on Issues Concerning the Application of Law in the Hearing of Cases Involving Disputes over Infringement upon the Rights of New Plant Varieties > recently issued by the Supreme People's Court shall come into effect on July 7, 2021.
Previously, the Supreme People's Court made interpretations and provisions on specific application of laws on disputes over new plant varieties in 2000 and 2007 respectively. Then the interpretations and provisions were revised with the newly promulgated PRC Civil Code and implemented simultaneously with the PRC Civil Code. It summarizes the main types of cases of disputes over new plant varieties, clarifies the jurisdiction of the corresponding case types, the way of determining the defendant, the right of the interested person to sue, the infringement determination of using the granted variety for the production of another variety, the selection of the infringement forensic agency, the forensic method, the pre-litigation preservation, the determination of the amount of compensation, the way of handling the infringing objects, and growers entrusted by others to propagate on behalf of the growers do not know the infringement of the substitute breeding material exemption. These two interpretations and provisions continue to be valid.
To a certain extent, this Judicial Interpretation continues the previous provisions on specific application of law and makes supplementary improvements. It absorbs the legislative and judicial experience accumulated in recent years in the field of intellectual property and civil litigation in China, and refines and implements a series of institutional designs such as prior judgment, obstruction of proof, defence of legitimate source, order to provide documents, punitive damages, etc. into the cases of new plant varieties. It increases the strength of protection and speed of remedy for the right holder, improves the efficiency of case trial, and reflects the extended application of legislative and judicial techniques already implemented in other branches of intellectual property law in the case of new plant varieties.
I. Define the exceptions to infringement
It stipulates under the Seed Law of the People's Republic of China that the use of granted varieties for breeding and other scientific research activities can be carried out without the permission of the owner of the new plant varieties and without paying royalties. This Judicial Interpretation further emphasizes that the use of granted varieties to cultivate new varieties and the use of granted varieties to cultivate the formation of new varieties, for new plant varieties application, new plant varieties validation, new plant varieties registration needs and repeated use of granted varieties of reproductive materials are scientific research activities. It is worth noting that the breeding here is different from the repeated breeding with other parents using the propagation material of the granted variety as the parental material as stipulated in the Supreme People's Court's "Several Provisions on the Specific Application of Law in the Trial of Dispute Cases of Infringement on the Right to New Plant Varieties", which will be deemed the use for commercial purposes. Regarding the right of farmers to reproduce for their own use, this Judicial Interpretation defines it. Farmers reproduce and use their own land within the scope of the land agreed in household contract for the contracted operation of rural land. Beyond the scope of use, the court will consider the purpose, scale, whether profit-making and other factors before determining whether it is an exceptional situation. This interpretation strikes a balance between protecting the interests of farmers and preventing the abuse of farmers' rights and considers the boundaries of farmers' and variety rights holders' rights.
II. Responses to Improve the Obstruction of Proof
It is normally difficult for right holders to collect evidence of infringement and compensation. Asking the court to go to the field to preserve the evidence of infringing plants is a procedural measure used frequently in such cases. Since the plants are completely under the control of the alleged infringer, the successful, accurate and complete preservation and post-preservation maintenance of the condition of the preserved object in practice depend on a high degree of cooperation from the alleged infringer and may have a significant impact on the infringement determination of the case. Article 16 of this Judicial Interpretation provides that where the alleged infringer resists preservation, unseals, transfers or destroys the preserved property or commits other acts of obstruction of proof, resulting in the failure to ascertain the relevant facts of the case, the court may presume that the claim of the right holder in respect of the matter of proof involved in the evidence is tenable. This provision, combined with the Civil Procedure Law, provides further institutional safeguards for this procedural measure in terms of legal consequences through the creation of a burden of proof. It plays a positive role in guaranteeing the normal operation of the judicial procedure and reducing the difficulty of proof for rights holders. In addition, Article 15 of this Judicial Interpretation introduces the rule of writ of certiorari and obstruction of proof. This makes clear that the obligation of the alleged infringer to provide account books and materials and the legal consequence of refusing to provide or providing false account books and materials in new plant variety cases. This provision achieves uniformity with the design of the corresponding system in other IPR cases, and clarifies the allocation and shifting of the burden of proof on the issue of compensation in such cases. It is also conducive to the identification of the calculation base by the court in the process of trial, thus improving the efficiency of the application of punitive damages in practice and reflecting the organic combination between the systems.
III. The combination of theory and practice of forensic
The comparative forensic of the granted variety and the infringing plant is one of the important parts in the case of new plant variety dispute. In order to determine whether the alleged infringing plant has the identity with the granted variety, it is necessary to judge through professional forensic. The common forensic methods are field observation detection (DUS detection) which requires breeding and long detection time, and gene fingerprinting detection (DNA detection) which has a short detection time and simple procedures but requires higher technology. In practice, the owner of the new plant varieties may delay the proceedings because of the lack of such testing methods for the variety or the inability to find the appropriate testing agency. Based on the previous provisions of the Supreme People’s Court on the Specific Application of Legal Issues in the Hearing of Disputes Over the Infringement of the Right to New Plant Varieties on the selection of forensic agencies and forensic methods, this Judicial Interpretation more clearly states that the forensic institutions should be selected from expert directory of the relevant fields or the forensic experts referred by agriculture or forestry authorities to the court. Several previous provisions have made it clear that if the infringing plant being sued has the same characteristics and features as the granted variety or the differences in characteristics and features are due to non-genetic variation, the infringing plant being sued shall be deemed to belong to the production, breeding or sale of propagating materials of the granted variety. This interpretation allows the use of industry-specific methods to determine the uniformity of characteristics between granted verities and the object being sued for infringement if the varieties cannot be identified by means of genetic fingerprinting or other detection methods. This gives effect to the judicial status of this mode of comparison. The results of the DNA tests are generally accepted, but that does not mean they are 100% accurate. In this Judicial Interpretation, those who have objections to the forensic opinion may apply for re-examination. This provision gives the possibility of re-examination or additional forensic to the objector. It makes no further provisions on the re-examination method. In other words, the re-test can use other forensic methods, and is not limited to the original test method. At the same time, the interpretation of the application for re-examination also made the restriction for the re-examination. It requests that the re-examination may only be requested based on reasonable grounds and evidence to prevent deliberate delay in the proceedings. The officer in charge of the Intellectual Property Tribunal of the Supreme People's Court further elaborated on the above "reasonable grounds" in an interview with the reporter: if the forensic institution or forensic expert does not have the corresponding forensic qualifications, the forensic procedure seriously violates laws, the source of the comparative sample is unknown, the basis of the forensic method is obviously insufficient, etc., and the applicant provides the corresponding evidence, in principle, it should be considered that there is ‘reasonable grounds’ for re-examination, supplemental test or re-test. For the inconsistency between the DUS test and the DNA test results, this Judicial Interpretation clearly stipulates that the DUS test result shall prevail. The DUS (Distinctness, Uniformity and Stability) test is a substantive examination step in the application for new plant variety rights. It is used as the basis for judicial forensic and has stronger proving power.
IV The new listing of serious infringement
Article 73 of the Seed Law stipulates that punitive damages may be imposed if the infringement of new plant variety rights is ‘serious’. However, there is no specific description of what constitutes a "serious" situation. Article 17 of the Judicial Interpretation explicitly lists six infringement that can be considered as "serious" for such disputes in view of the characteristics of the infringement of new plant variety rights:
- Committing the same or similar infringement again after being imposed with administrative punishment or taking liability as ruled by a court due to infringement;
- Engaging in infringement of new plant variety rights as main business;
- Forging certificates of new plant variety right;
- Selling granted varieties in packages without marks or labels;
- Violating Items (i), (ii) and (iv) of Paragraph 1 of Article 77 of the Seed Law; or
- Refusing to advise the places of production, reproduction, sale and storage of the alleged infringing products.
And it is clear that for five of them, the amount of punitive damages can be determined in accordance with more than two times of the calculation base. In addition, Article 17 also pointed out that provisions concerning punitive damages under other laws and judicial interpretations are also applicable to disputes over infringement of new plant variety rights. According to the Interpretation of the Supreme People's Court on the Application of Punitive Damages in Hearing Civil Cases of Infringement upon Intellectual Property Right released in March 2021, the other circumstances in which punitive damages may be applied include at least: where the defendant has forged, destroyed or concealed the infringement evidence; where the defendant has refused to perform the ruling on preservation; where the defendant has made huge gains from the infringement or the right holder has suffered huge losses; where the infringement may endanger national security, public interests or personal health. The above provisions provide certain standards and bases for the determination of "serious circumstance" in disputes over infringement of new plant variety rights, and play a positive role in improving the application of punitive damages and reflecting the efforts to combat infringement.
In view of the Judicial Interpretation issued by the Supreme Court, it appears that the handling of new plant variety dispute cases has been gradually improved through continuous judicial practice. From the initial explanation of procedural issues and infringement determination, it extends to a number of aspects such as right protection, proof, extent of protection, and gives very operational guidelines.
Xu Yi has rich experiences in IP litigation. She is based in Shanghai.
Xu Yi joined Rouse in December 2013. She has a bachelor and masters degrees in law from Peking University. She worked as a judge in the IP Tribunal of Shanghai Pudong New District Court for 6 years prior to joining Lusheng, and has since handled numerous groundbreaking IP litigation cases, including patent litigation, copyright, trademark, unfair competition, parallel importation cases, licensing agreement disputes, etc.
Xu Yi provides tailored enforcement strategies. She has particular expertise in patent cases, new types of unfair competition, conflict between different kinds of IP rights, protection of collective trademarks and complicated copyright infringement. She has helped clients reverse unfavourable prior judgments in multiple complicated second instance and Supreme Court retrial cases. She has obtained high compensation of more than tens of millions for clients in many large-scale lawsuits. She has also successfully applied for preliminary injunction orders for clients in multiple courts.
Jacqueline Zhao is a consultant at Lusheng Law Firm.
Jacqueline advises clients on technology transfer, incorporation and acquisition of China business, regulatory requirements for advertising and product packaging and labeling, enforcement of intellectual property rights, plant variety application, copyright prosecution and domain name prosecution and domain name dispute. She also has extensive experiences in drafting such legal instruments as intellectual property related agreements like assignment, license and evaluation of IP, commercial agreements like sales, service, non-disclosure and e-commerce agreements, corporate documentation like equity joint venture contract and articles of association, employment and corporate administration related documentation like employment contracts, premises lease contract and cease and desist letters to infringers.
During the period of working for ROUSE and its network law firm for over 14 years, Jacqueline has participated in joint venture and acquisition projects (e.g. incorporation of a joint venture company invested by an overseas company and a PRC listed company), IP transfer and licensing projects (e.g. purchasing trademarks and copyrights from an overseas company by a domestic Chinese stock company), provided legal services in connection with IP online and offline enforcement (e.g. enforcement of trademark registered in China by an overseas company via domestic e-commerce platforms), provided retainer legal services (e.g. rendering services to foreign-invested