China’s SPC Clarifies Scope of PVR in Highly Anticipated Decision in Pomelo Case
By Alanna Rennie (Baker Mckenzie, Sydney), Dr Yu Shujun (Beijing Hengda Agforest PBR Attorneys Co., Ltd. ) and Andrew Sim (Baker Mckenzie, Beijing)
The Supreme People’s Court of China has handed down its decision in the highly anticipated San Hong Pomelo Plant Variety Rights Infringement Case – providing significant clarification on the scope of Plant Variety Rights in China.
December 11, Beijing - The Supreme People’s Court handed down its decision on the Plant Variety Rights (PVR) infringement case of Cai Xin Guang (Appellant) vs. Guangzhou Runping Company Limited. Appellant is the holder of PVR in the pomelo variety San Hong (三红蜜柚 variety). The Appellant claimed that sales of the San Hong pomelo fruit in supermarkets infringed its PVR, claiming that the fruit falls within the definition of “propagating material” (繁殖材料) and therefore the scope of PVR under China’s New Plant Variety Protection Regulations (PVR Regulations) and Seed Law. In the end the Court determined that the fruit subject to the sale was not propagating material, and dismissed the Appellant’s claim of infringement.
However, the judgment provides significant detail on the Court’s decision process and logic, providing welcomed guidance on the scope of the right in China. Among the judges presiding on this case was Judge Luo Xia, who has significant experience in dealing with PVR cases and has made significant efforts to provide judicial guidance for breeders in this case.
Picture credit: Phoenix Han, Unsplash.com
This case provided clarity on the following points:
1. How to determine what is “propagating material”?
In order to be the propagating material of a certain variety, the material must satisfy the following conditions:
i. be living;
ii. possess propagating ability; and
iii. be able to propagate a plant which possesses the same traits and characteristics as the protected variety (i.e. propagate the variety true-to-type).
2. Whether “propagating material” can be determined by the theory of totipotency
According to the theory of totipotency, the DNA sequence of a variety can be replicated outside the plant and be used to propagate further plant material. However, the Court held that in order to be the propagating material of a PVR protected plant variety, the material must be able to propagate the same traits and characteristics as the protected variety. The Court concluded that simply declaring a variety to be propagating material based on totipotency does not accord with the legal requirements for PVR in China, and would result in the situation where all plant material, without distinction, is classified as propagating material.
3. Whether harvested material is protected by PVR in China?
The Court noted the scope of the right in China is limited to propagating material. Propagating material is defined for the purpose of PVR in China as “agriculture crop and forestry plant material or propagating material, including the seeds, fruit, roots, stems, seedlings, buds, leaves, and cells, organs (in forestry) etc.” The Appellant claimed that the fruit of its protected pomelo variety sold for consumption purposes constitutes sales of propagating material because the fruit seeds and the juice vesicles of its protected pomelo variety fall within the definition of propagating material.
The Court determined that the fruit seeds and the juice vesicles could not easily be used to propagate the variety true-to-type, and therefore did not fall within the definition of propagating material in this case. In reaching this conclusion, the Court relied on expert assistance which found that it would be difficult to propagate the variety true-to-type from the seeds because not all seeds in the pomelo fruit possess propagation capabilities, furthermore, those seeds that do possess propagation capability could not always propagate the variety true-to-type, especially for this said pomelo variety. With respect to the juice vesicles, the Court held that under the current state of technology, the juice vesicles could not always propagate the variety true-to-type.
4. If material can be both propagating material and harvested material, how to determine whether there has been an infringement?
Where material can be used as both propagating material and as harvested material, the court determined that the seller’s true intention must be examined, that is whether the seller’s intention is to sell the material as propagating material or as harvested material. If the user counter-argues that the activity is use rather than production, then the court should examine what the use is in reality. That is, if the material is to be directly used for consumption or in the propagation of the protected variety.
5. Whether growing and/or using a protected variety without the rights holder’s permission constitutes infringement?
Other than as determined by relevant laws and administration regulations, the Court held that if propagating material of a protected variety is “grown” without the rights holder’s permission, this constitutes the infringing conduct of “producing” the protected variety.
6. Whether propagating material is limited to the propagating material produced by the method of propagating on application?
The system of PVR protection protects those varieties that comply with the conditions of grant, and protects the propagating material of those varieties. The Court noted that although, at the time of applying for PVR a stem may be provided which has been obtained through the propagation method of grafting, this does not mean that the scope of protection for the granted variety only includes propagating material obtained through that propagation method. A stem produced using other methods of propagation may also constitute propagating material. With developments in science and technology, plant parts other than stems may become commonly used by breeders for propagation. In this situation, such plant material will become the propagating material of the granted variety, and should fall within the scope of protection.
The clarified scope of propagating material
In summary in order to be considered propagating material, and fall within the scope of the right in China, the following conditions must be satisfied:
i. The material be living;
ii. The material must possess propagating ability;
iii. The material be able to propagate a plant which possesses the same traits and characteristics as the protected variety (i.e. propagate the variety true-to-type);
iv. Where sales are involved, the seller’s intention must be to sell the material as propagating material; and
v. The propagating material must ordinarily be used to propagate the variety the subject of the alleged infringement.
The judgment in this case is welcomed in the respect that it provides clarity on the scope of the right in China, arguably more clarity than exists in other countries. On the other hand, the judgment sets limits on the scope of the right, so that harvested material sold for the purpose of consumption does not fall within the scope of the right.
This is the first case of PVR infringement since the establishment of the Intellectual Property Rights Tribunal under Supreme People’s Court at the end of 2018. The legal clarity provided by the case is a representation of the significant progress in China’s Plant Variety Rights system.
At the beginning of this year China released a draft revision to its PVR Regulations drawing from years of research of PVR systems globally and China’s own situation. The draft regulations are progressive and forward looking in line with the hope that China can become a leader in PVR protection, creating a more effective system which other countries can draw from. Among other things the draft regulations protect harvested material provided the rights holder has not had a reasonable opportunity to exercise its rights over the propagating material.
The Appellant was disappointed that the Supreme People’s Court rejected the Appellant’s claim that sales of pomelo fruit in supermarkets fell within the scope of the breeder’s right and felt that the case was not in line with the policy released two years ago in which the Chinese Communist Party and the State Council requested and urged the protection of intellectual property rights by creative thought. However, the judgement was made based on the existing Seed Law and PVR Regulations. Now we look forward to seeing whether protection will be directly extended to harvested material under the revised regulations.
Directly protecting harvested material is important for fruit and ornamental breeders where much of the breeding effort is focused on this material. CIOPORA has provided its comments on the draft regulations that the right be directly extended to harvested material. The regulations are now being progressed through the Chinese legislative approval processes.
We understand that the revised regulations will be announced early next year. We will look forward to reporting on the result.