Recently, the official website of the International Union for the Protection of New Varieties of Plants (UPOV) added a new section featuring judicial protection cases related to China’s seed industry. This is the first time UPOV has published such cases from China. A total of nine cases were released, covering civil, administrative, and criminal matters. The plant varieties involved include major grain crops such as corn, rice, and wheat, as well as cash crops like peppers and pears. These cases address key issues in seed industry IP protection, such as determining infringement, calculating damages, protecting breeding results, coordinating administrative and judicial protection, and applying criminal penalties for seed-related violations.
1. High Damages Deter Infringement
A new corn variety, referred to as “Variety A,” was created by crossing a female parent line (“Parent X”) with a male parent line (“Parent Y”), which was already in the public domain.
The plant variety rights for Parent X and Variety A were owned by Company A and Research Institute B, respectively. Research Institute B signed a licensing agreement with Company C, allowing Company C to sell Variety A seeds for a certain period. Company A later sued Company C, claiming that after the license ended, Company C continued to use Parent X to produce Variety A seeds without permission. Company A sought damages of CNY 49.52 million and also asked that Research Institute B be held jointly responsible.
The court of first instance ruled that Company C needed to obtain permission again from the rights holder of Parent X after the contract ended. However, since Company C had already invested significant resources in producing Variety A seeds, the court decided that instead of banning production, Company C should pay compensation to Company A. Company C was ordered to pay CNY 49.52 million in damages and legal costs, with Research Institute B responsible for up to CNY 3 million of that amount.
Both Company C and Research Institute B appealed. The appeals court upheld the damages but removed Research Institute B’s joint liability. Company C then appealed to the Supreme Court, which rejected the appeal.
The law does not prohibit using protected varieties for breeding or research. However, when a new variety is commercialized, if its production requires repeated use of a protected parent variety, permission from the parent variety’s rights holder is still required. This decision helps protect the rights of variety owners while encouraging the development and spread of improved seeds.
2. Full Support for Rights Holder in Rice Variety Case
Company D held an exclusive license for a rice variety called “Variety B.” Company E, without permission, sought out potential buyers and sold unlabeled seeds of Variety B. Company D sued Company E for infringement and asked the court to order Company E to stop selling the seeds and pay CNY 3 million in damages.
Company E argued that it only provided information to farmers who wanted to trade leftover seeds among themselves and did not actually sell the seeds.
The court of first instance rejected this argument, noting that Company E’s actions did not qualify as legal trading of leftover seeds by farmers at a local market. Considering the circumstances, the court applied punitive damages and ordered Company E to pay CNY 3 million in total.
Company E appealed, but the Supreme Court upheld the original ruling.
This case clarified that organizing sales through online platforms under the guise of farmers or large grain growers does not shield infringers from liability. Company E sold unlabeled, illegal seeds without the required license, which is a serious violation of seed laws. Punitive damages were applied at a rate of more than double the base amount, resulting in a total award three times the compensatory amount. The court fully supported the rights holder’s claim.
3. Serious Cases Lead to Criminal Liability
Individual X was the legal representative of Company F. In 2017, Company F processed and packaged seeds it had bred or bought from others, labeling them under the name “Variety C.” The company tried to register the variety but failed due to quality issues.
In December 2018, Company F sold 3,500 containers of Variety C seeds to Company G for a total of CNY 2.45 million. Company G then had farmers plant 1,626 of those containers. In July 2019, farmers reported abnormal plants, and both yield and quality were severely affected. Tests showed the seed purity was only 63.4%, far below the national standard of 95% and the 96% stated on the label. The seeds were officially classified as low-quality. The actual yield was much lower than the amount claimed on the label.
After the incident, Individual X voluntarily surrendered to the police. The court found that Company F and Individual X had committed the crime of producing and selling counterfeit or substandard products. Individual X received a reduced sentence due to his voluntary surrender and repentant attitude. The court ordered Company F to pay a fine of CNY 2.45 million and sentenced Individual X to 11 years in prison along with a fine of CNY 1.23 million.
Cases involving low-quality seeds for cash crops like peppers and peanuts are increasing. These cases not only affect farmers’ incomes but also impact the food supply. In this case, the company and its leader knowingly sold low-quality seeds with false claims about yield and purity. The court treated the case seriously and imposed strict penalties.
These three cases are among the first batch of Chinese seed industry IP protection cases published by UPOV. A representative from China’s Supreme Court said that judicial protection for seed industry IP is continuing to strengthen. The Supreme Court plans to release a sixth batch of typical cases soon and will continue recommending cases to UPOV, sharing China’s experience with the global community.
