The Supreme People's Court issued a final judgment in a plant variety infringement case, clarifying that when determining variety identity using molecular marker methods, any expansion of detection sites must strictly follow relevant standards and protocols. Such expanded detection is only justified if the following conditions are met: 1) the number of different sites between the sample in question and the control sample must be fewer than, but close to, the critical value; 2) the additional detection sites must exhibit sufficient genetic polymorphism and stability; there must be a strong correlation between the associated genes and phenotypes; the reliability of such correlation must be scientifically evaluated and verified; and functional markers tightly linked to specific traits must have been developed.
The case involved the maize plant variety "NP01154," owned by a French company. Company A, an affiliate of the French company, holds the exclusive license to the variety. Company A alleged that seven approved hybrid maize varieties produced and sold by Company B were derived from "NP01154" as a parent variety without authorization. It sought an injunction against further infringement, punitive damages of CNY 160 million, and reimbursement of CNY 200,000 in reasonable legal expenses.During the first instance, Company A submitted four detection reports showing that the parent variety "YZ320" of the accused infringing varieties differed from "NP01154" by only one site, arguing that this supported a finding of infringement. In response, Company B submitted detection reports claiming that four out of five additional sites showed differences, contending that the two varieties were distinct.
The first-instance court accepted Company B’s detection report, concluding that “YZ320” and the authorized variety “NP01154” were not the same, and dismissed all of Company A’s claims. Company A appealed, seeking a full reversal and support for its original claims.
The Supreme People’s Court, on appeal, held that the application of expanded site detection in accordance with Article 23 of the Provisions (II) of the Supreme People's Court on Several Issues Concerning the Specific Application of Law in the Trial of Cases Involving Disputes over Infringement upon Rights of New Plant Variety must satisfy the prerequisite conditions for additional detection. In addition, the selection of additional detection sites must strictly comply with relevant standards and specifications to ensure that the inclusion of such additional detection sites enhances the accuracy of identification. Specifically, the implementation of expanded detection sites and the performance of additional detection must be based on the premise that the number of different sites between the sample to be tested and the control sample is fewer than, but close to, the critical value. Additionally, the additional detection sites must exhibit sufficient genetic polymorphism and stability; there must be a strong correlation between the associated genes and the phenotype, and the reliability of this correlation must have been thoroughly evaluated and validated scientifically. Furthermore, functional markers closely linked to the trait must have already been developed. Otherwise, expanding the number of detection sites is neither necessary nor scientifically valid. In principle, the sites selected for additional detection should already be widely used for analyzing genotype differences between strains and varieties and should be recognized or accepted within the field for determining variety authenticity and purity. Upon review, the Court found that Company B’s detection report did not meet these judicial requirements or the standards for molecular marker detection of plant varieties. The report lacked the necessary prerequisites for expanding site detection in additional detection and did not provide sufficient evidence that the tested variety contained the specific markers in question, rendering the report unpersuasive.
Additionally, Company B’s argument that the accused infringing varieties were glutinous-type maize while "NP01154" was regular maize, and that they are therefore of different varieties, was found to lack factual basis. The available evidence demonstrated that the parent varieties (specifically the male parent variety) of the seven allegedly infringing hybrid maize varieties were identical to the authorized variety. Therefore, Company B’s actions constituted an infringement of the “NP01154” variety rights. Company B’s infringement was intentional, involving seven officially approved hybrid varieties, lasting over five years, and spanning a planting area of 8,243.4 mu (approximately 1,360.16 acres), qualifying as serious infringement and justifying the application of punitive damages. The second-instance court overturned the first-instance ruling and ordered Company B to immediately cease all infringing activities related to the “NP01154” variety and to pay Company A over CNY53.34 million in economic damages, plus CNY200,000 in reasonable expenses for rights enforcement.
In order to thoroughly implement the Supreme People's Court's Opinions on the Coordinated Operation of Case Filing, Trial and Enforcement Work in People's Courts, the second-instance judgment in this case has further specified detailed measures regarding the assumption of civil liability for infringement, particularly with respect to requiring Company B to cease infringement: First, the court ordered Company B to cease using parent varieties such as "YZ320" that are identical to "NP01154" for producing hybrid maize seeds, and to cease selling the infringing seeds. Second, Company B was ordered to destroy the reproductive capacity of the infringing seeds under court supervision or in the presence of Company A, with possible assistance from agricultural authorities to prevent the infringing seeds from entering the market. Third, Company B is required to notify relevant entities including its shareholders and affiliated companies of this judgment and the cessation requirements, and to have them sign non-infringement commitment letters. The judgment further stipulates that failure to perform the aforementioned cessation obligations within the specified time limit shall result in statutory delay penalties: refusal to comply with the first requirement shall incur a daily penalty of CNY100,000; refusal to comply with the second requirement shall incur a daily penalty of CNY50,000; and refusal to comply with the third requirement shall incur a daily penalty of CNY20,000.
After the judgment was announced in court, Company B promptly and proactively fulfilled all the obligations imposed in the appellate judgment, including paying full compensation and reasonable expenses on time.
This case marks the highest damages award to date in a plant variety infringement case. By accurately identifying the nature of the infringing conduct and applying punitive damages accordingly, the judgment signals a clear judicial stance on strengthening intellectual property protection, particularly for plant variety rights. Additionally, by detailing specific obligations for ceasing infringement and setting clear standards for delay penalties on non-monetary obligations, the ruling ensures timely and thorough enforcement, allowing the prevailing party not only to win in court but also to achieve the benefits of victory in practice. Importantly, this decision is the first to clarify the conditions for expanding detection sites when using molecular marker methods to determine variety identity, offering clear guidance on assessing the necessity and scientific validity of such detection, and serving as an important reference for resolving similar disputes in the future.
(2021) Zui Gao Fa Zhi Min Zhong No. 337
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