New Zealand: Plant Variety Rights

Last Updated: 30 November 2006
Article by Jane Calvert and Kate Duckworth

Commentary on the first case to consider infringement of plant variety rights in New Zealand.

Plant Variety Rights

Plant variety rights cases are rare and the first case to consider infringement was decided in the High Court of New Zealand in September 2004, followed by an appeal to the Court of Appeal by the first and second defendants in 2005.

In New Zealand plant variety rights ("PVRs") are governed by the Plant Variety Rights Act 1987 ("the Act"). PVRs give the owner of the PVR the exclusive right to "produce for sale, and to sell, reproductive material" of the variety protected (see section 17 of the Act). Infringement of the exclusive rights is actionable in the High Court. An appeal lies to the Court of Appeal.

The Facts Of The Case

In Cropmark Seeds Ltd v Winchester Intl (NZ) Ltd & Ors*, Cropmark, a New Zealand company, sued another New Zealand company and its two directors personally for infringement of its PVR in a barley called "Optic" used in brewing beer.

Cropmark alleged the defendants "arranged" for the sale of Optic barley seed.

Optic barley was developed in the United Kingdom. Cropmark was the exclusive licensee in New Zealand. There were sub-licensees in New Zealand who paid a royalty to Cropmark.

The facts of the case revealed a complex web whereby the defendants arranged for sales of uncertified Optic seeds from a third party. They did not sell seed themselves. The parties involved in the sale of the uncertified seed documented the sales and supply of seed as "feed" and not for "sowing" to avoid the need to pay levies and royalties to Cropmark. The seed was sold in plain bags, without tags. Purchasers of the seed were asked not to tell anyone about the purchase and that they would be billed for "straight barley" so as to leave a non-descript paper trail.

The second defendant was found to have gone to some lengths to hide the true nature of the sales. The judge, John Hansen J, also found discrepancies in the evidence. In relation to the second defendant, he found him "disingenuous, prone to dissemble, sometimes contradictory, and frequently answering a completely different question to what was put".

The High Court Decision

The judge came to the view that the second defendant knew that legally only Cropmark had the right to sell Optic barley, and had decided that if he did not sell directly, but merely arranged sales, he would avoid infringing Cropmark’s rights.

The defendants claimed that because there were no "sales" and as such no infringement based on the words of section 17 "produce for sale, and to sell, reproductive material".

John Hansen J’s decision includes an interesting discussion of the extent of the rights granted by the Act. The Act was said to give proprietary rights. Infringement is a violation of those rights, and in the judge’s view could not be limited to sale. The judge appeared to work backwards, stretching the words "produce for sale, and to sell, reproductive material" to include arranging sales. He said that otherwise sales of seed could be organised, in breach of proprietary rights, but escape liability.

How Can It Be An Infringement If The Rights Do Not Extend That Far?

It was the judge’s view that Parliament did not intend to exclude arranging sales from infringement. While this may be true, the words of the Act do not extend that far.

The Judge found that the first and second defendants infringed Cropmark’s proprietary rights. The third defendant, as director of the first defendant, was found not to have infringed because he lacked the necessary knowledge of the activities.

The question then turned to damages. There was no evidence that the defendants profited from their activities. If this was the case then one wonders why the defendants bothered to arrange sales. In any case, the judge saw no point in seeking an account of profits or damages.

Cropmark asked for exemplary damages. Exemplary damages are available where the defendant’s behaviour is reprehensible and are intended to punish a defendant.

The judge had no difficulty in finding there was a blatant and deliberate disregard of Cropmark’s rights. An award of $5,000 against each of the first and second defendants was awarded.

The Court Of Appeal Decision

The defendants challenged the High Court judgment as to liability, the award of exemplary damages and an order for payment of costs#.

The question was said to be whether the defendants’ conduct has diminished Cropmark’s enjoyment of its exclusive right.

Each of the sales was of reproductive material namely Optic seed. Since Cropmark possessed the exclusive right to engage in such conduct, undoubtedly the defendants infringed the exclusive right by depriving it of potential royalties.

The defendants may now apply to the Supreme Court for leave to appeal to that Court.

Did The Courts Get It Right?

Possibly not, because arranging sales is not one of the exclusive rights granted to the proprietor under section 17. But the defendants’ actions did deprive Cropmark of royalties and were deliberately designed to do so.

A judge can only operate within the confines of the law under consideration (although judges have at times been accused of stretching the law into the area of judicial lawmaking). Interest and lobby groups can then pressure Parliament for a change. The New Zealand Government is currently considering a change to the Act. The Plant Variety Rights Amendment Bill ("the Bill") has been released to the public for discussion but does not specifically cover "arranging sales". It does set out an expanded group of rights including the right to prevent other people, without the PVR owner’s authorisation, "from producing or reproducing, conditioning for propagation, offering for sale, selling or marketing, or importing or exporting the reproductive material of a protected variety" likely to be subject to some exceptions. The Bill also includes the right to prevent other people stocking that material for any of those purposes and authorising other people to do any of those things.

If passed by Parliament in its current form the Bill may be more likely to capture the defendants’ activities in the present case. While the words of the Bill do not expressly include "arranging sales" such an activity may be caught by the words "offering for sale" and/or "marketing" or as "authorising" other people to sell or offer for sale or market a protected variety. It seems that Parliament’s intention in drafting the Bill is to broaden the exclusive rights granted to PVR owners. However, the Bill is not yet law and has no effect on the case of Cropmark Seeds v Winchester.

*Cropmark Seeds Ltd v Winchester Intl (NZ) Ltd & Ors (HC, 28/9/04, John Hansen J, Timaru CIV 2003 – 476 – 8).

# Winchester Intl (NZ) & Anr v Cropmark Seeds Ltd (CA, 5/12/2005, Anderson P, Glazebrook J, Baragwanath J, Wellington, CA226/04)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions