The accused infringer constitutes the infringement of the plant variety if it did not exercise the duty of reasonable care as to the nature of the purchaser and the use purpose after buying when selling plant variety materials with propagating ability, resulting in the materials used as propagation materials and the occurrence of the infringement in effect.
Jiangsu A Company filed a lawsuit claiming that they have the exclusive enforcement right to the wheat in question, which enjoys the plant variety right, and that without their authorization, Huai’an B Company sold seeds of the wheat in question packaged in white bags, which infringed their legal rights. Therefore, Jiangsu A Company requested Huai’an A Company to immediately stop the infringement and compensate for economic losses and reasonable expenses.
Huai’an B Company argued that they sold the ear of wheat left after seed selection, so they did not constitute infringement.
After trial, the Court found that Jiangsu A Company enjoys the exclusive enforcement right of the variety in question, and that the alleged infringing materials were packaged in white bags, sold to farmers by Huai’an B Company, and used by farmers for propagation. According to the research, the alleged infringing materials are identical or highly similar to the variety in question. Huai’an B Company, which had formed a seed production entrusting contract with Jiangsu A Company, claimed that after selecting seeds following national standards relevant to germination rate, purity, clarity, moisture content, etc. agreed in the contract, there would be the ear of wheat that does not meet such standards left. Although the ear of wheat is propagative, Huai’an B Company is entitled to sell them.
The first-instance court judged that: 1. Huai’an B Company immediately stops infringing Jiangsu A Company’s exclusive enforcement right on the plant variety in question; 2. Huai’an B Company compensates Jiangsu A Company CNY three million as damages and reasonable expenses within 15 days from this judgment taking effect. Huai’an B Company filed an appeal arguing that they sold the ear of wheat, but not seeds, so they did not infringe the variety right in question. The Supreme People’s Court made the final civil ruling on October 23, 2023, in which item 1 in the first-instance judgment is retained, while Item 2 is canceled; Huai’an B Company is ordered to compensate Jiangsu A Company CNY364,320 as damages and reasonable legal expenses; and other claims of Huai’an B Company and those of Jiangsu A Company are rejected.
The Court’s effective judgment upheld that Huai’an B Company not only accepted Jiangsu A Company’s entrust to produce seeds, but also initially processed the seeds and delivered the seeds that met national standards of purity, clarity, germination rate, moisture content, etc. to Jiangsu A Company as agreed in the contract. Therefore, Huai’an B Company is a professional seed-producing company capable of initial processing and has reached a certain scale. Its duty of care is different from common market entities. Meanwhile, having established a cooperative operation foundation with Jiangsu A Company, Huai’an B Company should have performed the contract with good faith and honesty. However, regarding the ear of wheat that exceeds the contract agreement scope and can be propagated, while the contract does not include any specific agreement on the ear of wheat, Huai’an B Company knew the propagating ability of the ear of wheat and did not inactivate the ear of wheat to deprive it of the propagating ability during the entrusted seed production. Meanwhile, when selling such ear of wheat to the farmers, Huai’an B Company was careless with the nature of purchasing entities and usage after buying, resulting in such ear of wheat being used as propagating materials and the allowance of the occurrence of the infringement, which constitutes the infringement of the plant variety right in question.
(2022) Zui Gao Fa Zhi Min Zhong No. 1262
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