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German Federal Supreme Court strengthens rights of breeders in respect of harvested material and raises the bar for traders of harvested material

An article from Dr. Edgar Krieger


A trader who sells harvested material must check himself or make sure that his supplier has checked that the harvested material has been produced with the authorization of the breeder/titleholder.

Claiming ignorance of the unauthorized use of variety constituents is no proper defence for the trader of the harvested material obtained from these variety constituents.

Enforcement and acceptance of damages or remuneration does not lead to the subsequent legitimisation of the infringement.


If a breeder does not know about the unauthorized use of variety constituents of his protected variety for the production of harvested material, he had no reasonable opportunity to exercise his right in relation to the variety constituents.


The facts:

In the years from 2013 to 2018 a grain trader sold grain of varieties protected by Community Plant Variety Rights. The trader had bought the grain from three grain-producing farmers (the grain producers) who produced the grain from seed which they had purchased from three seed-producing farmers (seed producers). Although not clearly expressed in the Federal Court Decision, the three seed producers obviously had not had a license to produce the seed. The breeders / titleholders of the varieties concerned had no knowledge of the production of the seeds or the grain. Only after inspecting the operations of the six farmers, the breeders became aware of the facts.


The six farmers involved in the production and supply-chain issued cease-and-desist declarations to the breeders and paid reasonable compensation and/or damages.


The grain trader refused to sign a cease-and desist declaration, so that the breeders brought him to trial. As requested, the Regional Court prohibited the defendant from offering for sale, selling or other marketing or storing for any of these purposes harvested material (grain) of the varieties in suit without the consent of the breeders, if variety constituents were used for its production without the consent of the breeders and they had no opportunity to exercise their rights with regard to the use of these variety constituents.


The Higher Regional Court of Düsseldorf (Court of Appeal) dismissed the defendant's appeal against this decision.


Subsequently, the Federal Supreme Court dismissed the defendant's appeal against the decision of the Court of Appeal, for the following reasons:


  • The grain was obtained through the unauthorized use of variety constituents, because neither the grain producers nor the seed producers had a license to produce the grain respectively the seed.


  • The grain trader could not escape from his liability by claiming ignorance of the unauthorized production of the grain. A person who offers or places a product on the market may not evade responsibility for an infringement of rights therein by failing to take cognisance of the infringement. If such a party does not have the relevant information itself, it is obliged, as far as possible and reasonable, to obtain this information from third parties, for example by asking the suppliers. According to the case law of the Federal Supreme Court, a duty of inspection exists in any case for those distributors of harvested goods who purchase a product without checking with their suppliers that the necessary inspection has been carried out with due care by the supplier or an earlier link in the distribution chain (BGH, judgment of 14 February 2006 - X ZR 93/04, GRUR 2006, 575, para. 28 - Melanie).

  • The enforcement and acceptance of damages does not constitute prior authorization within the meaning of Art. 13 (2) Community Plant Variety Right Regulation (“CPVRR”). The claim for damages provided for in Art. 94 para. 2 CPVRR arises if one of the acts listed in Art. 13 para. 3 of the Regulation is carried out without the consent of the breeder / titleholder. This claim serves to compensate for the damage caused by the infringing act. Its fulfilment does not lead to the subsequent legitimisation of the unlawful act. The same shall apply to the enforcement and acceptance of remuneration pursuant to Art. 94 para. 1 CPVRR. The claim for remuneration also serves to compensate for acts of infringement that have been committed. Therefore, its fulfilment cannot lead to the unlawful act subsequently being regarded as lawful.


Rights in relation to harvested material are not already excluded if the breeder had the mere legal possibility to exercise his right in relation to the variety constituents. Rather, it is necessary that the breeder actually had sufficient possibilities to exercise his right in relation to the variety constituents used to obtain the harvested material. A sufficient opportunity to exercise the right in relation to the variety constituents presupposes that the breeder can ensure in advance that acts of use in relation to these variety constituents will only take place with his consent. In any case, if a breeder did not know about an infringing act, he had not the possibility to exercise his right in relation to the variety constituents.


 

Footnote: credits to Thomas Leidereiter from Green Rights, who brought the case to the CIOPORA Crop Section Fruit in Berlin last February.  


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