In March 2023, the Intellectual Property Tribunal of the SPC concluded three related cases involving disputes over infringement of plant variety rights. The cases focused on how to determine compensation liability after the infringing seeds were sterilized. The rulings of the three cases affirmed that unauthorized production of propagation materials of authorized varieties constitutes an infringement of others' variety rights, and where after the infringers fulfills their obligation of taking sterilization measures, the variety rights holder demands compensation for losses incurred, such claims should be supported.
The plaintiff in the original trial was the variety rights holder of hybrid corn seeds named "Yufeng 303" and "Zhongke Yu 505". The defendants (multiple individuals in multiple cases), without authorization, bred "Yufeng 303" corn seeds on 207 mu of land and bred "Zhongke Yu 505" corn seeds on 64 mu and 110 mu of land respectively in Liangzhou District, Wuwei City, Gansu Province. Upon the plaintiff's request, the Comprehensive Agricultural Law Enforcement Team of Wuwei City, Gansu Province, sterilized the infringing corn seeds after the corn ears reached maturity. The plaintiff believed that the defendant's behavior infringed its plant variety rights and filed a lawsuit seeking compensation.
The first-instance court held that although the defendants had committed an act of infringement, the infringement had ceased, and the plaintiff failed to provide evidence proving its loss incurred due to the infringement or the profits the defendants had obtained from the infringement; considering that the infringing seeds had already been sterilized and could no longer enter the market as propagation materials, the defendants' infringement did not result in any damage to the plaintiff, and thus the plaintiff's claim for compensation was not supported. Based on the investigation, evidence collection and verification, etc. which had been made, the first-instance court ordered each defendant in the three cases to bear the reasonable costs of CNY 5,000 paid by the plaintiff for preventing the infringement.
The SPC in the second instance determined that the defendants, without authorization, produced corn seeds of the involved varieties for commercial purposes, thereby infringing the plaintiff's variety rights, and thus should bear liabilities for the infringement according to law. Adopting sterilization measures and compensating for damages are both specific manners for assuming infringement liabilities and are not mutually exclusive. Adopting sterilization measures is a specific way to stop the infringement, and it is not only one of the manners for assuming administrative liability, but also one for assuming civil liability. The infringers' adoption of sterilization measures does not preclude their liability to compensate for losses. The defendants' large-scale production of the infringing corn seeds had occupied the market space of the variety rights holder, including the seed and commodity grain market scale that the variety rights holder could have achieved. Although the infringing corn seeds which could be used as propagation materials did not ultimately flow into the seed market due to sterilization, it did not mean that the variety rights holder did not suffer loss due to the reduction of its market share. Although taking sterilization measures against the infringing propagation materials can prevent further damages, it cannot avoid losses from occurring. Therefore, the defendants' infringement has caused losses to the variety rights holder, and thus should bear compensation liabilities. After comprehensively considering the sales prices of the involved varieties, the nature and circumstances of the infringement, and the fact that the infringing seeds had been sterilized, the SPC ordered the defendants to pay the plaintiff CNY 212,000, CNY 69,000, and CNY115,000, respectively, to compensate for the plaintiff's economic losses and reasonable costs of rights protection.
The rulings of the above three cases clarify the applications of the liability to take sterilization measures and the liability to compensate for losses, and the rules that infringers should assume compensation liability even after the infringing propagation materials are sterilized, thereby protecting the legitimate interests of variety rights holders in accordance with the law and embodying the judicial concept of strengthening the protection of plant variety rights.
Details of the cases may be found at the following link:
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