China’s Supreme Court Issued A New Draft on the Trial of Cases Involving Infringement of New Plant Variety Rights

On March 23, 2021, the Supreme People's Court (“SPC”) issued "Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases Involving Disputes over Infringement of New Plant Variety Rights (II) (Draft for Comments)" (“Draft”) for public comments. This Draft, preparing the way for the SPC’s final judicial interpretation, is aimed at strengthening judicial protection of new plant variety rights (“PVR”) and safeguarding scientific and technological innovation in the seed industry.

In this article, we will go through the key changes as introduced by the Draft and what the implications are for practice.

Following the landmark PVR case
In Chinese judicial practice, the SPC’s judicial interpretations are derived in part from a generalization of the judicial system's long-accumulated trial experiences, unifying those standards that can be repeatedly applied to the same types of dispute and issues. This Draft also refers to the SPC’s opinion shown in the Landmark PVR Case – San Hong Pomelo PVR Infringement Case. (the ‘Pomelo Case’)

For example, the Draft repeated the criteria in the Pomelo Case defining ‘propagating materials’ of a plant variety which include several biological conditions that must be satisfied: (1) the plant material must possess propagating capacity; and (2) 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 significant in 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).

Meanwhile, Article 5 of the Draft also followed the judgement that clarified that any ‘growing’ of the propagating material of a protected variety shall be deemed as an act of “producing” the propagating materials.

As mentioned in our earlier issue of the newsletter dated 12 December 2019, such clarification of SPC in this landmark case serves as a clear warning to those companies engaging in growing fruit trees, vegetables and ornamental plants to respect the PVR of the relevant holder. Compared with the individual case, the SPC’s judicial interpretation will be more generally binding and shows a solid attitude to go a step further in PVR protection.

How to determine the act of PVR infringement
The Draft also sets out some factors to be considered when finding whether there is PVR infringement.

Contract terms between the PVR holder and the infringer will be taken into account. Article 7 points out that where the licensee produces, propagates or sells the propagating materials of a protected variety beyond the geographical area authorized by the PVR holder, if the PVR holder claims that the above act constitutes an infringement, the people’s court shall support such a claim.

When the court deliberates over the PVR infringement, the commercial purpose of the alleged infringer, which is a key fact, will also be taken into account. The Draft specifies the relevant factors of the commercial purpose, including whether the act damages the market interests of the PVR holder, the subjective intention and subsequent acts of the alleged infringer, etc.

This reflects a trend in which the courts are attempting to address the problem of vague standards and wide discretion in the adjudication of disputes over PVR infringement in practice.

Guidance on appraisal in the trial of PVR cases
For disputes over PVR, due to the involvement of biotechnology and other specialized issues, the appraisal is usually needed to determine whether it constitutes infringement. However, the current laws and regulations do not provide a clear framework of trial rules concerning the appraisal. The Draft thus further gives the courts more detailed guidance concerning the appraisal process.

• Emphasizing the qualifications of the appraiser
  Article 22 regulates that the appraiser shall be affirmed upon negotiation by the parties concerned from the list of appraisers in relevant fields or among the appraisers recommended by the competent agricultural or forestry authorities under the State Council to the People’s Court. By contrast, the 2020 version of “Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases Involving Disputes over Infringement of New Plant Variety Rights”, does not stipulate that the appraiser appointed by agreement of the parties must be within a specific list or recognised by related administrative authorities.

• Guiding the court’s admissions to different appraisal methods
  According to the Draft, for the varieties to which there is no such appraisal methods of molecular marker detection (genetic fingerprint detection), the general methods of the industry can be used to determine identicalness between the protected varieties and the allegedly infringing objects. Moreover, if the conclusion of the field observation test is different from that of molecular marker detection, the people’s court shall take the conclusion of the field observation test.

• Regulating the process of re-appraisal
  The Draft regulates that if parties who disagree with the appraisal conclusion fail to provide reasonable grounds to apply for the re-appraisal, the people’s court shall not approve such application

• Applying the mechanism of allocating the burden of proof to balance the advantages and disadvantages of different appraisal methods
  The existing authoritative, scientific and reliable appraisal method is the field observation test method, but such method requires control planting in the field, and the period is too long. In contrast, the genetic fingerprint detection method is short-period and has strong objectivity, which is more commonly used but has inherent drawbacks. Low numbers of discrepancy loci are typical.
  
  The Draft applies the rule of allocation of the burden of proof, which increases the burden of proof of the alleged infringing party in refusing the DNA test results. When the PVR holder presents the DNA test report and the alleged infringer cannot provide sufficient evidence to the contrary, the court may directly presume that the alleged infringing party constitutes infringement. Such regulation can reasonably solve the shortcomings of the genetic fingerprint method and guarantee judicial efficiency at the same time.

Summary
The Draft formalizes the SPC’s opinions in the individual cases into judicial interpretation, providing a set of unified trial rules for the whole Chinese courts to follow. It also refined the ambiguous provisions in the law to fill the loopholes and unify the scale of judgments in the PVR protection system. The Revised Draft Regulations on the Protection of New Varieties of Plants of the People's Republic of China (Draft for Comment) published in 2019 has yet to be finalized and implemented. Such trial rules which are expected to be finalized and issued by the SPC in the coming months will have a significant influence on judicial practice. In summary, the amendments brought by the Draft marks a further step by China in achieving better protection of PVR.