Plant Variety Disputes: The Standard for Protecting Variety Rights Holders

Seeds are the “chips” of agriculture; tiny seeds are connected to the “great things of the nation.” Innovation, change, overcoming difficulties, protection and utilization… On the land of China, the seed industry is developing vigorously, like seeds breaking through the soil[1].

The protection of plant variety rights for asexually propagated varieties is a difficult issue in the protection of new plant varieties, and related cases are often highly controversial. For example, in the series of cases related to “Beautiful Elm” in the top 10 intellectual property cases of Chinese courts in 2016, some cases were retried twice, and the judgments were reversed multiple times. This issue has attracted widespread attention in the field of breeding. At the Third Session of the 13th National Committee of the Chinese People’s Political Consultative Conference, Yang Zhongqi, State Council Counselor, member of the National Committee of the Chinese People’s Political Consultative Conference, member of the Science and Technology Committee of the State Forestry and Grassland Administration, and director of the Key Laboratory of Forest Protection, submitted a proposal and specific suggestions on strengthening the intellectual property protection of asexually propagated plant varieties[2].

I. What are asexually propagated varieties? According to the breeding method, there are three main methods of plant breeding: asexually propagated varieties, sexually propagated varieties, and grafting hybridization breeding. Asexually propagated varieties refer to plant populations propagated asexually (such as division, cuttings, grafting, etc.). These plant populations have essentially identical genes and do not undergo gene recombination, resulting in low genetic diversity. Asexually propagated varieties have advantages such as rapid propagation, strong resistance to diseases and pests, and stable quality, but also disadvantages such as susceptibility to diseases and pests and a narrow genetic base.

Sexually propagated varieties refer to plant populations propagated sexually (such as pollen tube pathways, pollen tube germination, etc.). These plant populations undergo gene recombination, resulting in new genetic variations and high genetic diversity. Sexually propagated varieties have advantages such as strong adaptability, high genetic potential, and excellent quality, but also disadvantages such as long propagation cycles and susceptibility to environmental influences. Naturally hybridized varieties all belong to sexual propagation breeding.

In recent years, with the development of science and technology and people’s increasing emphasis on the ecological environment, more and more plant breeders have begun to try combining asexual and sexual propagation in order to achieve better breeding results. For example, superior female plants can be cultivated through asexual reproduction, and then hybridized with different male plants through sexual reproduction to obtain new varieties with better qualities and adaptability. This breeding method is often called grafting hybridization breeding.

In practical applications, both asexually and sexually reproduced varieties have their applicable scenarios. For example, some vegetable varieties are suitable for large-scale cultivation using asexual reproduction to increase yield and maintain quality stability; while some flower varieties are suitable for cultivation using sexual reproduction to obtain a wider variety of flower colors and shapes. Combining asexual and sexual reproduction aims to combine the advantages of both methods to apply to more complex scenarios.

II. Scope of Protection for Plant Variety Rights of Asexually Reproduced Varieties Article 28 of my country’s Seed Law, Article 6 of the Regulations on the Protection of New Plant Varieties, and Article 6 of the Supreme People’s Court’s “Several Provisions on the Specific Application of Law in the Trial of Disputes over Infringement of New Plant Variety Rights” all clearly stipulate that the protected and prohibited objects are the propagation materials of authorized varieties. Furthermore, Article 28 of the Seed Law, which came into effect in 2022, establishes protection for substantially derived varieties.

Therefore, to determine the scope of protection for new plant varieties, it is necessary to determine what constitutes the propagation material of the authorized variety. Since plant varieties are living organisms, all the genetic characteristics of the variety are contained in the propagation material of the variety, which is also the carrier for measuring whether the variety possesses novelty, distinctiveness, uniformity, and stability. Using the propagation material to determine the scope of protection for the variety right is the most complete and accurate. Zhou Xiang, Vice President of the Intellectual Property Court of the Supreme People’s Court, and Luo Xia, a judge of the court, believe that the identification of propagation material in judicial practice mainly considers three factors: First, it must meet three conditions in biology, namely, it must be a living organism, have the ability to reproduce, and the new individuals produced must have the same characteristics as the authorized variety. Second, whether the material obtained through the theory of cell totipotency is propagation material. Third, how to identify the act of producing and selling propagation material, it is necessary to strictly examine the true intention of the actor when it is both propagation material and harvested material [3]. For example, in the 2019 case of Cai Xinguang v. Guangzhou Runping Commercial Co., Ltd., one of the 50 typical intellectual property cases in Chinese courts, there was a dispute over the infringement of new plant variety rights [4]. In this case, Cai Xinguang owned the variety right of the new plant variety Sanhong Honey Pomelo. The Sanhong Honey Pomelo is a fruit variety belonging to the Citrus genus. It is a new variety resulting from a secondary bud mutation of the Guanxi Honey Pomelo bud, which developed into a red-fleshed honey pomelo (also called red-heart honey pomelo). It is a vegetatively propagated plant. In early 2018, Cai Xinguang discovered that Runping Company was selling this variety of pomelo fruit. Cai Xinguang filed a lawsuit, requesting the court to order Runping Company to cease selling the fruit propagated from the Sanhong Honey Pomelo, to compensate for economic losses, and to bear the litigation costs.

During the second instance trial, the Supreme People’s Court held that propagation material includes both sexual and asexual propagation material; any plant or part of a plant can potentially become propagation material. That is, asexual propagation material also falls under the category of propagation material. The reason why propagation material of a variety is included in the scope of protection for plant variety rights is that the genetic characteristics of the variety are contained within its propagation material, and the plant characteristics obtained after propagation through this material remain unchanged. Therefore, although seeds, fruits, roots, stems, seedlings, buds, and leaves of a plant may all have reproductive capabilities, whether they fall within the scope of plant variety rights protection hinges on whether the propagated plants retain the characteristic traits of the variety or whether those traits have changed even if propagated. Different parts of a plant may have multiple uses, including production for propagation, direct consumption, or ornamental purposes. The same plant material may serve as both propagation and harvest material. Whether a plant that can be used for both propagation and harvest in an infringement dispute can be considered propagation material depends on the seller’s true intention in selling the allegedly infringing plant.

After court investigation, it was found that propagating new plants from the allegedly infringing pomelo fruit and seeds would be difficult, and even if new seedlings were cultivated, there was a high probability of mutation. Runping Company sold this pomelo variety through supermarkets, clearly not for propagation, but for consumption of the harvest material. Therefore, the Supreme People’s Court determined that the allegedly infringing pomelo fruit was harvest material, not propagation material, and therefore did not fall within the scope of plant variety rights protection.

III. Infringement Determination of Planting of Asexually Propagated Varieties Asexually propagated varieties themselves include propagation materials; therefore, whether planting constitutes infringement has been a long-standing point of contention. For example, in one of the aforementioned “Beautiful Elm” series cases, the Changchun Intermediate People’s Court held that the planting by Jiutai Gardening Office was a landscaping activity, and that the Hebei Academy of Forestry and Luyuanda Company had no evidence to prove that Jiutai Gardening Office had carried out production or sales for commercial purposes. Therefore, Jiutai Gardening Office’s actions did not constitute an infringement of plant variety rights. If only considering the purpose, Jiutai Gardening Office’s subjective purpose might indeed be landscaping. However, objectively, its planting inevitably leads to propagation. If it is determined not to infringe, the variety rights holder will inevitably face the inability to protect its rights. After two retrials, the Supreme People’s Court ultimately ordered the Shandong Provincial Higher People’s Court to retry the case. The Shandong Provincial Higher People’s Court held that Jiutai Gardening Office acknowledged that it had planted the allegedly infringing elm trees and determined that Jiutai Gardening Office had committed the allegedly infringing act. Ultimately, the court ruled that Jiutai Gardening Office should bear the corresponding tort liability [4]. The Supreme People’s Court released the tenth of the third batch of typical cases of judicial protection of intellectual property rights in the seed industry. In the case of Sichuan Yidun Kiwi Fruit Planting Co., Ltd. v. Shizhangkong Kiwi Fruit Professional Cooperative of Mabian Yi Autonomous County, the Supreme People’s Court further clarified the infringement determination of planting asexually propagated varieties. The kiwi fruit involved in the case is an asexually propagated variety. Since asexually propagated varieties can reproduce themselves, planting asexually propagated varieties will inevitably produce new propagation material. Therefore, except for “private non-commercial use”, the act of planting authorized asexually propagated varieties without permission will involve the production and propagation of authorized variety propagation material in Article 28 of the Seed Law revised in 2015 [5].

IV. Liability for Infringement of Asexually Propagated Varieties In the protection of new plant varieties, the way of assuming liability is relatively flexible in judicial practice. Article 7 of the “Several Provisions of the Supreme People’s Court on the Specific Application of Law in the Trial of Disputes over Infringement of New Plant Variety Rights” stipulates that if both the right holder and the infringer agree to deduct the value of the infringing product from the losses suffered by the right holder, the people’s court shall allow it. If the rights holder or the infringer does not agree to a deduction based on the price, the People’s Court, upon the request of the parties, shall order the infringer to destroy the infringing material to render it unusable as propagation material. If the infringing material is in its growth stage or its destruction would lead to significant adverse consequences, the People’s Court may not order the destruction of the infringing material but instead order the payment of reasonable expenses. However, this does not apply if otherwise stipulated by law or administrative regulations.

The above judicial interpretation provides a legal basis for the flexible handling of infringement liability. For asexually propagated varieties, ceasing infringement means destroying the plants of the accused variety, which inevitably leads to significant adverse consequences. In the aforementioned case of Sichuan Yidun Kiwi Fruit Planting Co., Ltd. v. Shizhangkong Kiwi Fruit Professional Cooperative of Mabian Yi Autonomous County, a dispute over infringement of plant variety rights, the court of first instance ruled that payment of licensing fees should be made in lieu of ceasing infringement, and the Supreme People’s Court upheld this decision in the second instance.

This flexible approach avoids the inability of variety rights holders to protect their rights, thereby encouraging innovation and R&D investment and ensuring fair competition in the seed industry market. When the rights of variety rights holders are protected, they can obtain economic returns, which will encourage them to continue R&D and innovation, promoting scientific and technological progress and agricultural development. Protecting the rights of plant variety holders prevents infringement, ensures fair competition in the seed market, and prevents unfair competition from harming the interests of legitimate businesses. It also protects the interests of impoverished farmers and avoids resource waste. If the infringement is stopped by a judgment, kiwifruit trees that have been planted for several years and are about to bear fruit will need to be destroyed. However, this project is a local poverty alleviation project, with a certain percentage of impoverished farmers as shareholders, which would obviously have adverse social effects. Paying licensing fees, on the other hand, balances the interests of all parties, maximizing their benefits.

V. Summary and Outlook
The protection of asexually propagated varieties is an important component of plant variety protection. In recent years, the scope of protection for asexually propagated varieties has been further clarified, the standards for infringement identification have been further unified, and the methods of liability assumption have become more flexible and comprehensive. These advancements indicate that the protection of asexually propagated varieties has entered a new era.

However, my country’s plant variety protection system started relatively late. After nearly 30 years of exploration, a protection system with Chinese characteristics has only been initially established. In the future, we should strengthen systematic and comprehensive top-level design, legislate and formulate a separate law for plant variety protection, and elevate the legal status of variety rights protection. Further strengthen the protection of new plant varieties, expand the protection process, broaden the scope of protection, and extend the protection period to provide more opportunities for variety right holders to safeguard their legitimate rights and interests.

References:

[1] Xinhua News Agency, New Era, New Journey, New Great Cause: Matters of Concern to General Secretary Xi Jinping | The “Core” Wish of Seeds, 2023.05.14, http://m.news.cn/2023-05/14/c_1129612928.htm.

[2] Luo Huixin, Proposal of CPPCC Member Yang Zhongqi: Intellectual Property Protection of Asexually Reproduced Plant Varieties Needs to Be Strengthened, [J]. China Flowers & Horticulture, No. 11, 2020.

[3] Zhou Xiang, Luo Xia, You Meiling, Identification of Propagation Material in New Plant Variety Rights [J]. People’s Justice, No. 1, 2020.

[4] Shandong Provincial Higher People’s Court, Judgment No. 13 of 2014 (Lu Min Zai Zi). [5] Supreme People’s Court, (2022) Supreme Court Intellectual Property Civil Final Judgment No. 211.