China’s Supreme Court Handed Down Judgment on Landmark PVR Case – San Hong Pomelo Plant Variety Rights Infringement Case

On 11 December 2019 the Supreme People’s Court of China (‘SPC’) handed down its decision in the long-awaited San Hong Pomelo Plant Variety Rights Infringement Case (the ‘Pomelo Case’), which has dismissed the appeal of the plant variety right (‘PVR’) holder and upheld the original judgment of first instance delivered by the Guangzhou IP Court.

The Pomelo Case is concerned between Cai Xinguang (Appellant) and Guangzhou Runping Company Limited (Appellee). The Appellant is the holder of PVR in the San Hong Honey Pomelo variety (三红蜜柚). The Appellant asserted that the Appellee’s sales of the fruit of San Hong Honey Pomelo variety had infringed its PVR, claiming that the fruit fell within the definition of “propagating material” protected under China’s New Plant Variety Protection Regulations (‘PVR Regulations’) and Seed Law. SPC, after findings, held that the fruit of San Hong Honey Pomelo variety does not qualify as propagating material and thus the sales thereof by the Appellee does not constitute infringement against the PVR of the Appellant. Apart form ascertaining the said fact, the analysis in the judgment by SPC is of high judicial value which has shed light on and clarified several important aspects related to defining PVR infringement.

Criteria to define ‘propagating material’
According to Article 28 of Seed Law and Article 6 of PVR Regulations, a PVR holder enjoys exclusive right over the protected plant variety and without authorization by the PVR holder, no one has right to produce or sell propagating material of such protected plant variety for commercial purposes, or repeatedly use for commercial purposes propagating material of such protected plant variety in the production of the propagating material of another variety. It can be read from the said provision that the scope of PVR protection is solely limited to the ‘propagating material’ of the protected variety based on which the PVR holder shall exercise his/her rights. Therefore, to clearly define and identify ‘propagating material’ of a protected variety have always been essential and necessary in any PVR infringement case. 

SPC, in its judgment over the Pomelo Case, has first clarified the criteria defining ‘propagating materials’ of a plant variety which include three biological conditions that must be satisfied: (1) the plant material must be living; (2) the plant material must possess propagating capacity; and (3) the plant material must be able to propagate a plant which possesses the same traits and characteristics as the protected variety.

The above criteria are, in particular, significant in and conductive to determining the ‘propagating material’ of a plant variety reproduced by asexual reproduction (in which a plant grows from a fragment of the parent plant or a specialized reproductive structure). In the Pomelo case, the pomelo at issue is a variety reproduced by asexual reproduction. The court has in the end denied the fruit of San Hong Honey Pomelo variety constituting as its propagating material since it is found, relying on expert opinion and technical consultation, that not all fruits of pomelo possess propagating capacity and those fruits that do possess propagation capability do not always propagate the pomelo plant having the same traits and characteristics as the protected variety.

In addition, the SPC judgement also rebutted the theory of totipotency argued by the Appellant which holds that the DNA sequence of a variety can be replicated outside the plant and be used to propagate further plant material. SPC holds that in any case the plant material at issue needs to be tested according to the above criteria otherwise it may result in any living material from a plant falling into ‘propagating material’  simply relying on the theory of totipotency.

Criteria to define selling plant material falling into both propagating and harvested material
Plant material can be divided into propagating material, harvested material and products that are made and processed from harvest material. As previously explained, the scope of PVR protection is solely limited to propagating material of a protected variety. However, there are cases where the plant material at issue falls into both propagating material and harvested material of a plant. This can be frequently seen in plant variety reproduced by asexual reproduction. In the Pomelo Case, SPC has further elaborated on this issue and pinpointed the criteria to determine whether there is infringement when selling plant material recognized as both propagating and harvested material. Specially, SPC holds that owing to a part from a plant may have different purposes of use such as propagation, or direct consumption and ornament, the court shall first examine the seller’s actual intention of such sales, namely whether to sell the material as harvested material or propagating material. Should the conduct of selling be ascertained as for direct consumption and ornament purposes, the relevant person of such conduct may not be imputable under PVR protection.

Unauthorized “growing” of propagating material will be deemed as PVR infringement
It has been commonly seen in practice that widespread fruit trees, vegetables, and ornamental plants are grown with the propagating material of relevant plant variety without the authorization by the relevant PVR holder. However, those persons committing the ‘growing’ often argues that such ‘growing’ is a conduct of ‘use’ rather than ‘produce’ which is legally set out as an act of infringement and thus imputable. Now SPC, in the Pomelo Case, has clearly clarified that expect as provided in relevant laws and regulations, any ‘growing’ of the propagating material of a protected variety without the authorization of the relevant PVR holder shall be deemed as an act of infringement by “producing” the propagating materials. The said clarification of SPC is highly valuable to enhance the level of PVR protection which serves as a clear warning to those companies engaging growing of fruit trees, vegetables and ornamental plants to respect and protect the PVR of relevant holder. It is highly important to obtain the authorization or license from the relevant PVR holder before any growing.

In consideration of the above, this SPC judgment over Pomelo Case has made clear of several disputed aspects in defining PVR infringement and shall serve as a landmark judgement. It shall provide high judicial values of guidance for PVR holders seeking protection against infringement and also give a clear warning to those companies in the market not paying attention to and respecting PVR protection.