Concluding that the accused infringer lacked notice that the product sold for an unauthorized use was a variety protected under the Plant Variety Protection Act (PVPA), the U.S. Court of Appeals for the Federal Circuit reversed a district court’s denial of the accused infringer’s motion for judgment as a matter of law on both the PVPA and Lanham Act claims. Syngenta Seeds, Inc. v. Delta Cotton Co-Operative, Inc., Case No. No. 05-1507 (Fed. Cir. July 28, 2006) (Gajarsa, J.).
The PVPA provides a cause of action for infringement against any person who, inter alia, undertakes to "sell or market the protected variety," multiply or propagate it "for growing purposes" or "dispense the variety to another, in a form which can be propagated, without notice as to being a protected variety under which it was received." Damages are precluded where the authorized distribution of the protected variety is received without a label containing the words "Unauthorized Propagation Prohibited" or "Unauthorized Seed Multiplication Limited," unless the recipient has actual notice or knowledge of the prohibition. Syngenta markets PVPA-certified Coker 9663 wheat in approved packaging containing the required PVPA marking. Delta Cotton Co-Operative operates a grain elevator and functions as a broker, seller and retailer of grain. Delta Cotton’s businesses sell "feed wheat" not intended to be propagated and PVPA-protected seed varieties, including Coker 9663. After a jury trial, the district court found Delta Cotton to be liable for the sale of three bags of feed wheat containing Coker 9663 seed.
On appeal, the Federal Circuit concluded the trial court erred in its construction and application of the statue by omitting the requirement that the dispenser have notice that the seed it dispensed was a protected variety. The Court further noted that, before liability for infringement can attach, the statute requires failure by the dispenser to provide notice to the recipient that the seed was a protected variety. The Court concluded that the evidence before the jury was insufficient as a matter of law to sustain a finding of infringement because Syngenta did not prove that Delta Cotton both had notice and failed to provide this notice to the recipient of the dispensed seeds. Turning to damages, the panel concluded that, where the alleged infringer received the protected seed without the statutory label, the plaintiff has the burden to prove and demonstrate "actual notice or knowledge that propagation is prohibited" or that the seed is a protected variety. Therefore, Delta Cotton was not required to plead and prove lack of knowledge as an affirmative defense. The alleged trademark violation under the Lanham Act also was overturned on appeal. The Court questioned whether a claim for "reverse passing off," which stands for misrepresentation of someone else's goods or services as one’s own, is even cognizable when the re-branded product does not compete for the trademarked product because its use is for a different purpose, in this case as animal feed. The Court concluded there was insufficient evidence to support that Syngenta was involuntarily deprived of the advertising value of its name and the goodwill that otherwise would stem from public knowledge of the true source of the Coker seed.
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