*AI-generated translation, for reference only.

Keywords: Civil; Infringement of New Plant Variety Rights; Scope of Protection; Propagating Material; Harvested Material

Judgment Digest

1. The propagating material of an authorized variety constitutes the scope of protection of the new plant variety right, and serves as the foundation upon which the variety right holder exercises its exclusive monopoly right. The scope of protection of an authorized variety is not confined to propagating material obtained through the specific method adopted at the time of applying for the variety right. Even if the propagating material differs from that commonly used by breeders during the authorization stage of the new plant variety right, where other plant materials can be used as propagating material of the authorized variety, such materials shall likewise be incorporated into the scope of protection of the new plant variety right.

2. For plant material to be recognized as the propagating material of a particular authorized variety, the following requirements must be simultaneously satisfied: it must be living, must possess the capacity to propagate, and the new individual propagated therefrom must share the same characteristics and properties as the authorized variety. Plant material that can only be used as harvested material and cannot be used as propagating material does not fall within the scope of protection of the new plant variety right.

Relevant Statutory Provisions

Article 28 of the Seed Law of the People's Republic of China

Article 6 of the Regulations of the People's Republic of China on the Protection of New Varieties of Plants

Case Facts

On November 10, 2009, Cai Xinguang applied for a new plant variety right for the "Sanhong Pomelo" (Three-Red Pomelo), which was granted on January 1, 2014, with variety right number CNA20090677.9 and a term of protection of 20 years. The On-site Inspection Report of DUS Testing of New Varieties of Agricultural Plants issued by the Office for the Protection of New Varieties of Plants of the Ministry of Agriculture and Rural Affairs recorded that the provisional denomination of the variety was Sanhong Pomelo; the plant species belonged to the genus Citrus; the type of the variety was asexual reproduction; and the field inspection results indicated that the color of the albedo (white peel layer) of the applied variety was pink, whereas that of the closest similar variety was white, thereby possessing distinctness. The inspection concluded that the applied variety possessed both distinctness and uniformity. The attached photographs recorded that the Sanhong Pomelo had a dark red rind, pink albedo, and purple flesh, whereas the Red-flesh Pomelo had a yellow-green rind, white albedo, and red flesh. The foregoing facts are corroborated by evidence including the Certificate of New Plant Variety Right, the receipts for the annual fees of the new plant variety right, the Statement of Opinions, the Request for Variety Right Application, the Specification, the Application Form for Change of Bibliographic Items, and the On-site Inspection Report of DUS Testing of New Varieties of Agricultural Plants.

On March 23, 2018, Cai Xinguang filed a lawsuit with the Guangzhou Intellectual Property Court, claiming that Guangzhou Runping Commercial Co., Ltd. (hereinafter "Runping Company") had continuously and in large quantities sold "Sanhong Pomelo" fruits, thereby infringing his new plant variety right for the variety denominated "Sanhong Pomelo."

Runping Company argued in defense that the accused infringing pomelo fruits it sold had a legitimate source, and produced a contract entered into between Party A, Kunshan Runhua Commercial Co., Ltd. Guangzhou Huangpu Branch (hereinafter "Runhua Huangpu Company"), and Party B, Jiangshan Sennan Foods Co., Ltd. (hereinafter "Sennan Company"). On July 18, 2017, Runhua Huangpu Company and Sennan Company entered into the 2017 Annual Commercial Cooperation Terms. Article 6, Paragraph 5 of the contract recorded that, as of the date of execution of the contract, the two parties were already cooperating with respect to 6 stores, including Runping Company. On January 8, 2018, Sennan Company issued to Runhua Huangpu Company an invoice together with a list of goods sold or taxable services and labor provided, which listed goods including 650 kg of Sanhong Pomelo. The duplicate business license of Sennan Company recorded that Sennan Company was a limited liability company, incorporated on February 22, 2013, with a registered capital of RMB 5,000,000, and its scope of business was wholesale and retail of prepackaged food; and sale of fruits and vegetables. Sennan Company's Food Business License recorded that its business items were sale of prepackaged food and sale of unpackaged food, with the license valid until August 10, 2021.

Result of the Judgment

On January 3, 2019, the Guangzhou Intellectual Property Court rendered Civil Judgment (2018) Yue 73 Min Chu No. 732, dismissing Cai Xinguang's claims. Dissatisfied with the judgment, Cai Xinguang appealed to the Supreme People's Court. On December 10, 2019, the Supreme People's Court rendered Civil Judgment (2019) SPC IP Civil Final 14, dismissing the appeal and upholding the original judgment.

Judge's Opinion

The Supreme People's Court holds that the principal issue in dispute in this case is whether Runping Company's sale of the accused infringing pomelo fruits constitutes infringement of Cai Xinguang's new plant variety right for the Sanhong Pomelo, and that, within this issue, determining the scope of protection of the new plant variety right for the Sanhong Pomelo is the focal point of the case.

In the present case, although what Cai Xinguang submitted when applying for the new plant variety right for the Sanhong Pomelo was propagating material—namely, branches—obtained by means of grafting, this does not mean that the scope of protection of the new plant variety right for the Sanhong Pomelo is limited solely to that propagating material obtained by grafting; branches obtained by other means likewise constitute propagating material of that variety. With the advancement of science and technology, plant bodies differing from the propagating material used at the authorization stage of the new plant variety right may also become planting material chosen by breeders—that is, planting material other than branches may also be commonly used by breeders. Under such circumstances, where such planting material serves as propagating material of the authorized variety, it shall be incorporated into the scope of protection of the new plant variety right. The original judgment held that the propagation method of infringing propagating material should correspond on a one-to-one basis with the material and propagation method used in breeding the variety, and held that incorporating into the scope of protection of the new plant variety right propagating material different from the initial propagation method by which the variety right was obtained would create an imbalance with the rights that the right holder is entitled to enjoy in the course of applying for the new variety right. That determination treats the propagation method used at the time of applying for the new plant variety right as the basis for protecting the authorized variety, thereby restricting the scope of protection of the new plant variety right and narrowing the lawful rights and interests of the new plant variety right holder, and should accordingly be corrected.

China's relevant laws, administrative regulations, and rules have enumerated propagating material, but have not expressly provided how to determine which parts of a plant body constitute propagating material for any specific variety. Biologically, in order to be determined as propagating material of a given authorized variety, the following conditions must be simultaneously satisfied: it must be living, must possess the capacity to propagate, and the new individual propagated therefrom must share the same characteristics and properties as the authorized variety. Whether the accused infringing pomelo fruits are propagating material of the Sanhong Pomelo variety requires not only a determination of whether the fruits possess the capacity to propagate, but also a determination of whether the new individuals propagated from such fruits possess the morphological features of a dark red rind, purple flesh, and pink albedo. If they do not possess the characteristics and properties of the authorized variety, they do not constitute propagating material protected by the variety right for the Sanhong Pomelo.

As to whether the Sanhong Pomelo fruits can serve as propagating material, upon examination, even specialized scientific research institutions find it difficult to propagate pomelo seedlings from the seeds of Sanhong Pomelo fruits. At the second-instance hearing, the expert assistant engaged by Cai Xinguang stated that pomelo is monoembryonic and prone to variation, that this variety is propagated by branches, bud sticks, rootstocks, or division, and that whether the Sanhong Pomelo fruits contain seeds and whether the seeds are degenerate is uncertain. Taking into account the specific circumstances of the variety in the present case, neither the seeds nor the juice vesicles of the accused infringing pomelo fruits in this case possess the capacity to propagate the authorized variety Sanhong Pomelo, and they therefore do not constitute propagating material of the Sanhong Pomelo variety. The accused infringing pomelo fruits are harvested material rather than propagating material, and do not fall within the scope of protection of the new plant variety right. To incorporate harvested material into the scope of protection of the new plant variety right in the present case would contravene the relevant provisions of the Seed Law, the Regulations on the Protection of New Varieties of Plants, and the Provisions of the Supreme People's Court on Several Issues Concerning the Specific Application of Law in the Trial of Cases of Infringement of New Plant Variety Rights.

Moreover, different parts of a plant body may have a variety of different uses—they may be produced for propagation purposes, or they may be used for direct consumption or ornamental purposes—and the same plant material may serve both as propagating material and as harvested material. With respect to a plant body that may serve both as propagating material and as harvested material, the question whether it can be recognized as propagating material in an infringement dispute should be determined by examining the seller's true intent in selling the accused infringing plant body—that is, whether the seller's intent is to sell the material as propagating material or as harvested material. With respect to a user who argues in defense that its conduct constitutes use rather than production, the user's actual conduct of use should be examined—that is, whether the user uses the harvested material directly for consumption or uses it to propagate the authorized variety.

In conclusion, Cai Xinguang's grounds of appeal—that the accused infringing pomelo fruits are propagating material of the Sanhong Pomelo and that Runping Company's act of sale constitutes infringement—cannot be sustained and should be dismissed.