On March 17, 2024, the Supreme People’s Court of China (the SPC) released a new batch of typical cases regarding the seed industry’s intellectual property protection.
According to the SPC, there are 15 typical cases in this batch, which includes 13 civil infringement and contract cases, one administrative case regarding PVR granting, and one criminal case regarding the infringement of trade secret. Further, the said cases involve a wide range of plant varieties, such as wheat, rice, corn, pepper, melon, beans, etc.
Among them, most cases are PVR infringement civil disputes and involve compensation ranging from hundreds of thousands to millions of RMB, which provides useful insights on how to determine the amount of compensation that resulted from the infringement.
For instance, in Case Two, the plaintiff is the owner of the granted PVR “Dan Yu No. 405 (丹玉405号)” for corns. The defendant company first infringed “Dan Yu No. 405” under another name “Zi Guang No. 4” which was recognized as infringement by the people’s court in 2015, and then continued its infringement of the said PVR under other variety names in 2019 and 2020. In the plaintiff’s claim, it requested the defendant company and another company that was selling the infringing seeds 3 million yuan for compensation and reasonable cost, including 1.5 million yuan as the compensation base, plus one time as the punitive damages. The first instance court of the case only supported 1 million yuan for the compensation on the ground that it could not confirm the basis of the punitive damages.
Nevertheless, the SPC, upon hearing the second instance trial, considered that the defendant company should be liable for the punitive damages, as it had infringed the said PVR under other names multiple times and repeatedly conducted the infringement, which had covered a long time and a wide area on a large scale and showed an obvious intention of infringement in severe circumstances. The defendant company admitted that it illegally used 1000 kg of the original “Dan Yu No. 405” seed and bred 400 acres thereof. Based on the seed quantities and gross profit for sales of the “Dan Yu No. 405” that could be obtained from the said 400 acres, it can basically satisfy the 1.5 million yuan compensation basis claimed by the plaintiff, and the first instance court inappropriately applied the law by not supporting the plaintiff’s punitive claim. In other words, the SPC fully supported the plaintiff’s compensation request of 3 million yuan. According to the SPC, this case is enlightening as it specifies that the basis for the punitive base can be recognized based on the evidence of the case, other than simply applying for the legal compensation on the ground that it is hard to calculate precisely.
Further, in Case 3, the plaintiff is the owner of the granted PVR “Aodaili (奥黛丽)”. In March 2020, the plaintiff purchased, upon notarization, two bags of pepper seed “pepper 3756” which showed the manufacturer thereof was the defendant company. Upon appraisal, the bought seed was similar to the granted “Audaili” and they constituted similar variety. On June 28, 2020, the plaintiff signed an agreement with the defendant company in which the latter committed that it would not use, manufacture, or sell the “Aodaili” variety seeds and seedlings starting in 2021. … in case of violating the said commitment, it shall pay a compensation amount of 2 million yuan as a default to the plaintiff. On April 23, 2021, the plaintiff preserved evidence, upon notarization, of its purchase of the “pepper 3756” seeds from a shop, as well as multiple articles promoted on websites and a WeChat public account by the defendant company. The plaintiff brought an infringement lawsuit to court against the defendant company and the said shop for compensation and a reasonable cost amount of 2.2 million yuan. The first instance court merely supported the compensation and cost of 200 thousand yuan.
Nevertheless, the SPC, upon the second instance trial, considers that the said agreement stated the defendant company’s liability when it infringes again. Upon signing the agreement, the defendant company had not only ceased the previous infringement but also conducted a new infringement, which was obviously intentional. Based on the trial finding, it can be inferred that the profit obtained by the defendant company from the infringement exceeded the 2 million economical loss claimed by the plaintiff, and it should use the 2 million yuan stated in the agreement as an important reference to determine the compensation. Thus, the SPC determined that the defendant company shall compensate the plaintiff’s economical loss of 2 million yuan plus 10 thousand yuan for reasonable cost, and the said shop shall be jointly liable for 200 thousand yuan thereof. According to the SPC, this case is enlightening as it specifies that the PVR owner and the infringer can reach an agreement regarding the compensation for any possible infringement loss, which can become an important reference to determine the infringement compensation amount in future disputes. It is said that this is helpful to resolve the difficulty of the proof for the infringement compensation, enhance the protection of the right owners’ legal rights, and encourage the seed companies to operate honestly and perform in good faith.
[Comment]
This is the fourth batch of typical cases regarding the seed industry’s intellectual property protection in four consecutive years, the first batch of such cases was issued in 2021. By far, there are 50 typical cases issued in four batches.
Among them, there are about six criminal cases that involve the crimes of manufacturing and selling inferior products, selling inferior seeds, infringement of trademarks, and infringement of trade secrets; three administrative cases that cover both the rejection and invalidation of the PVR grant; and 41 civil cases that are mostly PVR infringement-related, as well as a few regarding the use fee of the temporary protection period and the PVR license agreement.
It can be seen that each of these cases will provide some helpful reference, such as the calculation of the base of the punitive damages and reaching agreement on the compensation for infringement in advance mentioned above, to both the PVR owners and the legal practitioners. Since China has increasingly emphasized the importance of intellectual property protection in the seed industry, it is estimated that there might be more typical cases released in the future.
According to the SPC, there are 15 typical cases in this batch, which includes 13 civil infringement and contract cases, one administrative case regarding PVR granting, and one criminal case regarding the infringement of trade secret. Further, the said cases involve a wide range of plant varieties, such as wheat, rice, corn, pepper, melon, beans, etc.
Among them, most cases are PVR infringement civil disputes and involve compensation ranging from hundreds of thousands to millions of RMB, which provides useful insights on how to determine the amount of compensation that resulted from the infringement.
For instance, in Case Two, the plaintiff is the owner of the granted PVR “Dan Yu No. 405 (丹玉405号)” for corns. The defendant company first infringed “Dan Yu No. 405” under another name “Zi Guang No. 4” which was recognized as infringement by the people’s court in 2015, and then continued its infringement of the said PVR under other variety names in 2019 and 2020. In the plaintiff’s claim, it requested the defendant company and another company that was selling the infringing seeds 3 million yuan for compensation and reasonable cost, including 1.5 million yuan as the compensation base, plus one time as the punitive damages. The first instance court of the case only supported 1 million yuan for the compensation on the ground that it could not confirm the basis of the punitive damages.
Nevertheless, the SPC, upon hearing the second instance trial, considered that the defendant company should be liable for the punitive damages, as it had infringed the said PVR under other names multiple times and repeatedly conducted the infringement, which had covered a long time and a wide area on a large scale and showed an obvious intention of infringement in severe circumstances. The defendant company admitted that it illegally used 1000 kg of the original “Dan Yu No. 405” seed and bred 400 acres thereof. Based on the seed quantities and gross profit for sales of the “Dan Yu No. 405” that could be obtained from the said 400 acres, it can basically satisfy the 1.5 million yuan compensation basis claimed by the plaintiff, and the first instance court inappropriately applied the law by not supporting the plaintiff’s punitive claim. In other words, the SPC fully supported the plaintiff’s compensation request of 3 million yuan. According to the SPC, this case is enlightening as it specifies that the basis for the punitive base can be recognized based on the evidence of the case, other than simply applying for the legal compensation on the ground that it is hard to calculate precisely.
Further, in Case 3, the plaintiff is the owner of the granted PVR “Aodaili (奥黛丽)”. In March 2020, the plaintiff purchased, upon notarization, two bags of pepper seed “pepper 3756” which showed the manufacturer thereof was the defendant company. Upon appraisal, the bought seed was similar to the granted “Audaili” and they constituted similar variety. On June 28, 2020, the plaintiff signed an agreement with the defendant company in which the latter committed that it would not use, manufacture, or sell the “Aodaili” variety seeds and seedlings starting in 2021. … in case of violating the said commitment, it shall pay a compensation amount of 2 million yuan as a default to the plaintiff. On April 23, 2021, the plaintiff preserved evidence, upon notarization, of its purchase of the “pepper 3756” seeds from a shop, as well as multiple articles promoted on websites and a WeChat public account by the defendant company. The plaintiff brought an infringement lawsuit to court against the defendant company and the said shop for compensation and a reasonable cost amount of 2.2 million yuan. The first instance court merely supported the compensation and cost of 200 thousand yuan.
Nevertheless, the SPC, upon the second instance trial, considers that the said agreement stated the defendant company’s liability when it infringes again. Upon signing the agreement, the defendant company had not only ceased the previous infringement but also conducted a new infringement, which was obviously intentional. Based on the trial finding, it can be inferred that the profit obtained by the defendant company from the infringement exceeded the 2 million economical loss claimed by the plaintiff, and it should use the 2 million yuan stated in the agreement as an important reference to determine the compensation. Thus, the SPC determined that the defendant company shall compensate the plaintiff’s economical loss of 2 million yuan plus 10 thousand yuan for reasonable cost, and the said shop shall be jointly liable for 200 thousand yuan thereof. According to the SPC, this case is enlightening as it specifies that the PVR owner and the infringer can reach an agreement regarding the compensation for any possible infringement loss, which can become an important reference to determine the infringement compensation amount in future disputes. It is said that this is helpful to resolve the difficulty of the proof for the infringement compensation, enhance the protection of the right owners’ legal rights, and encourage the seed companies to operate honestly and perform in good faith.
[Comment]
This is the fourth batch of typical cases regarding the seed industry’s intellectual property protection in four consecutive years, the first batch of such cases was issued in 2021. By far, there are 50 typical cases issued in four batches.
Among them, there are about six criminal cases that involve the crimes of manufacturing and selling inferior products, selling inferior seeds, infringement of trademarks, and infringement of trade secrets; three administrative cases that cover both the rejection and invalidation of the PVR grant; and 41 civil cases that are mostly PVR infringement-related, as well as a few regarding the use fee of the temporary protection period and the PVR license agreement.
It can be seen that each of these cases will provide some helpful reference, such as the calculation of the base of the punitive damages and reaching agreement on the compensation for infringement in advance mentioned above, to both the PVR owners and the legal practitioners. Since China has increasingly emphasized the importance of intellectual property protection in the seed industry, it is estimated that there might be more typical cases released in the future.