In April 2023, the Intellectual Property Tribunal of the SPC concluded the first administrative case regarding confirmation of plant variety rights, clarifying the judgment criteria for loss of novelty of a claimed variety due to sales. The ruling affirmed that where a breeder provides breeding materials for seed production under contract and agreeing to repurchase the seeds, such act does not constitute an act of sale that would lead to loss of variety novelty.
In this case, the appellant held that the respondent's corn variety had lost its novelty since its propagation materials were provided by the respondent to another company for seed production (while the respondent agreed to repurchase the seeds) in 2008, which was more than one year before the respondent applied for variety protection on December 9, 2009. Therefore, the appellant filed an invalidation request against the respondent's plant variety rights with the Plant Variety Reexamination Board. The invalidation decision affirmed the respondent's variety rights. Then, the appellant filed a lawsuit at the Beijing Intellectual Property Court. The first instance dismissed the lawsuit, and then the appellant appealed to the SPC.
The SPC in the second instance held that the existence of an act of sale is a crucial factor in determining whether a variety in respect of which variety rights are applied for meets the novelty requirement. Pursuant to Article 14 of the Regulations on the Protection of New Varieties of Plants, for a new plant variety in respect of which plant variety rights are applied for, acts of sale that lead to the loss of novelty mean that the breeder gives propagation materials to others for transactional purposes while relinquishing his/her own rights to dispose of such materials. Where a breeder provides propagation materials of a variety to others for seed production under contract and it is agreed that the seeds produced will be returned to the breeder, then the breeder essentially retains the right to dispose of such materials, which does not result in loss of variety novelty unless otherwise stipulated by law. Although the entrusted party held and used the propagation materials for a certain period, they had no right to dispose of them or engage in activities contrary to the terms of the production contract. Therefore, the breeder did not relinquish his own rights to dispose of such materials, and his providing propagation materials for seed production under contract and repurchasing the seeds did not constitute sales of propagation materials. The evidence presented by the appellant in this case was insufficient to prove loss of novelty of the variety concerned, and therefore the SPC ruled to reject the appeal and uphold the original ruling.
Through a reasonable interpretation of sales act under law, the SPC in this case has established legal protection for breeders who apply for variety protection after providing propagation materials for seed production under contract during the research and development process, safeguarding variety rights for innovative breeding achievements and thus effectively stimulating breeding innovation. This case was recently selected into the third batch of people's courts' typical cases of judicial protection of intellectual property rights in seed industry.
Details of the case may be found at the following link:
https://ipc.court.gov.cn/zh-cn/news/view-2300.html
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