China: Plant Variety Protection in China - Growing Interest

By Matthew Murphy and Kellie Wu, MMLC Group, Beijing

Protection of new plant varieties is still a relatively new area of intellectual property in China, despite the country having one of the richest horticultural cultures in the world. Prior to 1997 (at least in the modern area following the founding of the People’s Republic of China), China did not have any laws or regulations in place allowing for the protection of plant breeders’ rights for their new varieties. The situation changed greatly in October 1997 after the Regulations of the People's Republic of China on the Protection of New Plant Variety (PVP Regulations) were promulgated.

Intelligent plant breeders can do very well out of licensing their plant variety rights, either through royalty-focused licensing regimes to nurseries and growers, or through immediate sale of their registered rights and associated know how to large growers. There has been a dramatic increase in the last six months in foreign companies’ interest in protecting and exploiting their new plant varieties in China – the PRC government has publicly announced on many occasions that it was wanting to focus on increasing the income to the nation’s 700 million farmers and rural dwellers in order to improve life quality – a development involving new plant technology can lead to significant increases in income for all concerned, particularly if exports are involved. Further, China’s low labor costs are no secret, but with the government deciding to phase out the 2000 year old agricultural products tax and provide various incentives to foreigners wishing to invest in the rural areas, China is becoming an extremely attractive venue for breeders and growers the exploitation of their plant variety rights (PVR). Once registered, PVR provide an owner with the exclusive right to grow and sell that new type of plant variety in China.

Following adoption of the PVP Regulations, the National People’s Congress approved China’s accession to the International Convention for the Protection of New Varieties of Plants (the UPOV Convention) on August 29 1998. China officially adopted the UPOV Convention (1978 Version) with effect from April 23 1999. Parties to the UPOV Convention form the Union for the Protection of New Varieties of Plants (the UPOV), which is an inter-governmental organization based in Geneva. Until China’s accession, foreign applicants under the PVP Regulations were generally only successful in obtaining plant variety rights (PVRs) where China had negotiated a bilateral agreement with the foreign applicant’s country. Until China joined the UPOV Convention, rights apparently available under the PVP Regulations were in practice mostly unavailable to foreign entities. With the exception of a brief framework agreement with Italy, China had not put in place formal bilateral arrangements with other countries relating to the mutual protection of new plant varieties. Foreign investors are now able to seriously consider commercializing certain new plant varieties in China.

The new plant variety, according to Article 2 of the PVP Regulations, means a cultivated plant variety, or a developed one based on a discovered wild plant, which is "new, distinct, uniform and stable", and whose denomination is adequately designated – clear standards have been provided in the regulations.

PVR is a comparatively new thing to Chinese plant variety breeders, but more and more breeders are beginning to realize the value of PVR. Since the promulgation of the PVP Regulations, more domestic companies are applying for PVR in China: in 2003, the New Plant Variety Protection Office of the MOA received 567 applications, almost double that which it received in 2002; the New Plant Variety Protection Office of SFA received 48 applications, as compared to 17 in 2002.

Enforcement of PVR in China is in theory, a relatively straight forward process under the PVP Regulations, its Implementations and the Provisions on the Handling Cases of Infringement of Rights to New Varieties of Agricultural Plants (Infringement Provisions), which came into effect on February 1, 2003.

In case of infringement, a PVR registered owner (or a licensee) has two enforcement options: enforcement handled by the MOA or SFA under the supervision of the PVR registered owner or a licensee, or filing a writ for PVR infringement in the relevant court in China.

Given that the MOA and the SFA are powerful bodies in China in agribusiness, it is likely that in most cases the assistance of the MOA or SFA would be sort initially in a infringement case to carry out a raid of the relevant farms of the infringers (immediate plant confiscation, document confiscation and infringer interrogation – later, the MOA or SFA will impose civil fines on the infringers and may assist in negotiating a compensation payment from the infringers to the PVR owner) and then consideration can be given to filing an action in a court for compensation if necessary and appropriate. Traditionally the courts have not been willing to order Chinese companies to pay significant sums of money for intellectual property infringement, however that is gradually changing.

Quarantine is a complex, time-consuming and often controversial area in China. For plant materials, which are introduced into China for the first time, the requirements for quarantine are strict. It is necessary for quarantine officers to see a complete growth cycle of a plant before it can be allowed to pass quarantine – see the Rules of Approval and Supervision to the Introduced Forestry Seeds, Plant Materials and Other Propagating Materials Quarantine promulgated by the SFA. Thus, it often takes about two or three years for a plant to pass quarantine. Foreign breeders should take care to commence the quarantine process at the same time they commence the PVR registration process, so as not to be disappointed when they get the PVR and then wish to use it in China.

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.