New Plant Varieties Protection in China
Rights for new variety of plant (NVP) are a type of intellectual property right to protect innovations in agricultural and forestry breeding. China established the legal protection for new varieties of plants through the Regulations for the Protection of New Varieties of Plants in 1997 and acceded to the International Convention for the Protection of New Plant Varieties of Plants in 1999. Over the past 20 years, protection has expanded to a growing number of plant varieties, while the number of applications also has been increasing year-by-year, making China the country with the largest number of annual applications for agricultural plant varieties. This article will explain the basic rules and procedures a plant breeder must know for protecting his or her rights for new varieties in China.
Filing an NVP application
New varieties of plants (NVP), in the context of Chinese intellectual property laws, refer to plant varieties that are cultivated by people or developed from a discovered wild plant, which possess novelty, distinctness, uniformity and stability and are properly named. NVP protection provides for 20 years from the date of grant for vines, forest trees, fruit trees and ornamental trees, and 15 years for other eligible plants.
Breeders and Applicants
The breeder identified in an NVP application must be a natural person, who makes inventive contributions to the breeding of the new variety. A person, who is responsible only for organizational or managerial work, providing convenience for the utilization of material resources, or engaging in other supportive works, is not a legitimate breeder.
The applicant of an NVP application can be either an individual or an entity. A breeder is eligible for applying for an NVP, unless his works are service under his employment duty. That is, if the breeding is made in execution of the tasks assigned by his employer entity, or made mainly by using the material resources (e.g., funds, equipment, places, breeding materials and technical data) of the employer entity, the employer entity shall enjoy the rights to file the NVP application. In commissioned breeding, the ownership of the NVP shall be determined according to the contract; if there is no contractual agreement, it shall belong to the entity or individual who accomplishes the breeding works. In cooperative breeding, the agreement shall prevail, otherwise the NVP shall belong to the entities or individuals who jointly accomplish the breeding work.
Where the applicant is a foreigner or a foreign company or organization that has no habitual residence or business office in China, a Chinese agency must be entrusted to act for their NVP application.
Only the genera or species included in the National Catalogs of Protected New Varieties of Plants are eligible for NVP protection. At present, there are 397 genera or species in the National Catalogs, including grain, cotton, oil plant, fiber crops, vegetables, tobacco, forest trees, bamboo, fruit trees, ornamental plants, grasses, medicinal plants, edible fungi, and algae etc., wherein 191 of them are agricultural varieties and 206 are forestry varieties.
An NVP application should be filed as soon as the breeding is accomplished or in the first year of the regional trial, in order to obtain timely protection pursuant to the Regulations for the Protection of New Varieties of Plants. If the applicant first filed the application abroad and wants to claim the priority of the foreign application when filing later in China, he should submit the Chinese application with a written statement within 12 months from the date of the first foreign application, and submit a certified copy of the first foreign application issued by the corresponding foreign authority within 3 months from the date of the Chinese application.
In addition to the filing request, the application documents should also include the specification and photos, which are used to reflect the pedigree, source of parents or other used propagating materials, breeding method and process, environment and cultivation techniques, characteristics comparison with similar varieties.
After the application is received at the competent authority, it will go through the preliminary examination for no more than six months, with primary focuses on:
• Whether the species of the applied NVP is listed in the National Catalog;
• If the application is filed by a foreign applicant, does it comply with the relevant provisions of international treaties or the principle of reciprocity;
• Whether the applied NVP is novel;
‐ At the date of application, the propagating material of the NVP has not been sold or otherwise disposed of to others, by or with the consent of the breeder,
(i) in the territory of China for more than one year, and
(ii) in a territory out of China for more than four years or, in the case of vines, forest trees, fruit trees and ornamental trees, for more than six years;
• Whether the name of the applied NVP is appropriate;
‐ It shall be distinguished from every name which designates a known variety of the same botanical genus or species or of a closely related genus or species.
‐ A name consisting only of numbers, using the name of a country or an administrative district at county level or above or a well-known place in foreign countries, using the same as or similar identifying names of intergovernmental international organizations or famous international or national organizations; misleading as to the features or characteristics of the NVP or as to the identity of the breeder, or having an effect of exaggeration in promotion, in violation of national laws or social morals, or with ethnic discriminations.
‐ If complied with the above requirements, the name of the applied NVP should be consistent with that in other certificates, such as variety registration certificate or a safety certificate for a genetically modified organism.
Substantive examination is carried out mainly based on application documents and other relevant written materials. When necessary, the examination office will entrust a designated testing institution to conduct tests or send personnel to conduct on-site inspections to study the planting or tests of the applicant. The examination or inspection primarily focuses on the distinctness, uniformity and stability (DUS) of the applied NVP.
‐ Distinctness means that the NVP shall be clearly distinguishable from the varieties known before the filing of the application.
‐ Uniformity means that the characteristics or traits of the NVP shall, with the exception of foreseeable variation, be consistent.
‐ Stability means that the characteristics or traits of the NVP shall, after repeated propagation or at the end of a particular cycle of reproduction, remain unchanged.
An NVP will be granted if it is found to conform to all the requirements. The examination office will issue the decision to grant the NVP rights, then dispatch the certificate, and have it registered and announced to the public.
If an NVP application is rejected and the applicant refuses to accept the decision, he may request for reexamination within three months from the date of receiving the rejection notification. Generally, a reexamination decision will be issued in six months. If he wants to challenge the reexamination decision, he may institute an administrative lawsuit to the people's court within 15 days from the date of receiving the decision.
The authorities do not charge application fees, examination fees and annuity fees in the application process.
Enforcing NVP rights
It is considered infringement if anyone, without the authorization of the NVP right holder, produces or sells the propagating materials of an NVP, or uses the propagating materials of an NVP for producing the propagating materials of another variety, for commercial purposes.
In the meantime, NVP rights do not extend to:
• Using the NVP in breeding and other scientific research activities; or
• Reproducing of the propagating materials of the NVP by farmers for their own use.
• In these circumstances, the parties need neither to need to obtain permission from nor to pay the exploitation fee to the NVP right holder for the exploitation.
It is worth noting that the scope of the NVP rights in China covers only the propagating materials. Harvested materials and products made directly from harvested materials are excluded from the protection.
Case 1. Cai Xinguang v. Guangzhou Runping Commercial Co., Ltd. (the first Supreme People’s Court appeal case on NVP infringement)
The allegedly infringing variety is the Sanhong Honey Pomelo fruit, which could be seen as either propagating material or harvested material. Due to its characteristics, the NVP Sanhong Honey Pomelo, however, is usually considered an asexually propagated variety. Its seeds, grains, and juice cells can hardly be used as propagating materials. Moreover, Runping Company was selling the fruits for consumption rather than for propagation. The Supreme People’s Court found the Runping Company not infringing and rejected Cai’s claims.
The first-instance court for civil proceedings regarding NVP infringement are the intermediate people's court where the infringement occurred or where the provincial government where the defendant is located, or the intermediate people's court designated by the Supreme People's Court (SPC) in the local area. For example, a competent court can be the Beijing Intellectual Property Court, Jinan or Qingdao Intellectual Property Court of Shandong Province, Shijiazhuang Intermediate People's Court of Hebei Province. The SPC’s Intellectual Property Tribunal takes over all second-instance NVP cases throughout the country.
Because NVP infringement cases are highly specialized and complex, it is often necessary to adopt appraisal procedures to determine facts such as whether the characteristics of allegedly infringing variety are the same as those of the NVP. The appraisal institute and appraiser shall be determined by consultation between the parties. If the consultation fails, they shall be designated by the people's court. If there is no suitable appraisal institute or appraiser, professional institute and people with appropriate level of variety testing knowledge and skills could act for the appraisal.
Common NVP appraisal can be divided into two groups: field observation and laboratory tests. Field observation, a.k.a. DUS test, is consistent with the standards adopted for granting an NVP, and is widely adopted by member countries of the International Union for the Protection of New Varieties of Plants (UPOV). Its results are well accepted, but subject to environmental conditions, high costs and a long processing time. Laboratory test refers to modern molecular biology techniques such as DNA fingerprinting, electrophoresis analysis of esterase isozymes or proteins, etc. It is easier and quicker, while the results are not necessarily accepted in judicial practice.
Case 2. Laizhou Jinhai Seed Industry Co., Ltd. v. Zhangye Fukai Agricultural Science and Technology Co., Ltd. (SPC Guiding Case No. 92)
The DNA report showed only one locus among the 40 loci used for detection in the sample of the allegedly infringing variety is different from that of the NVP. According to the Testing and Determination Standard of DNA Fingerprint Method for Appraisal of Maize Variety (NY/T1432-2007) issued by the Ministry of Agriculture, if the differences are less than two, it is deemed that there is no sufficient condition for determining that the two samples are different. Therefore the first-instance court confirmed infringement. The second-instance court then further pointed out that there is no direct connection between the DNA analysis and DUS test. Given that there is only one different loci, not sufficient for determination, other factors should be taken into consideration to determine whether the compared varieties are the same. The corresponding burden of proof should be borne by the party accused of infringement. Since they failed to provide contrary evidence, e.g., additional test results with increasing testing loci, or further validated samples for determination, the court determined that Fukai’s act constituted infringement.
Case 3. Shandong Denghai Xianfeng Seed Industry Co., Ltd. v. Shaanxi Nongfeng Seed Industry Co., Ltd. and Shanxi Dafeng Seed Industry Co., Ltd. (SPC Guiding Case No. 100)
The results from the two testing methods are inconsistent, i.e., the DNA fingerprinting report showed that the samples of the infringing variety and the NVP are the same or similar. As a defense, the accused infringer submitted a DUS test report to prove that the allegedly infringing variety has distinctive characteristics comparing to those of the NVP in field planting. The court then ruled that the defendant did not constitute NVP infringements.
Civil liability for NVP infringement primarily includes stopping infringement acts and collecting damages. The amount of compensation shall be assessed on the basis of the losses suffered by the right holder or the profits gained by the infringer. Alternatively, the right holder may request that the amount of compensation be determined according to the NVP license fees, with reference to the type, time, scope and other factors of the license. If it is difficult to determine an amount by the above methods, the court will consider the nature, period and consequences of infringement, and the reasonable expenses paid by the right holder to investigate and stop the infringement, and apply a statutory compensation of no more than CNY500,000 (US$72,250).
If the infringing product is seeds, the relevant provisions of the Seed Law can be applied: the amount of compensation shall be assessed in the specific order, i.e., the actual loss, the profits gained from the infringement, and the reasonable multiple of the license fee. The amount of compensation should further include the reasonable expenses paid by the right holder to stop the infringement. If the infringement is serious, a punitive compensation of more than one time and less than three times of the amount determined according to the above methods. If the compensation is difficult to be determined according to the above methods, a statutory compensation of no more than CNY3,000,000 (US$434,000) can be applied.
Case 4. Henan Jinboshi Seed Industry Co., Ltd. v. Beijing Denong Seed Industry Co., Ltd. and Henan Academy of Agricultural Sciences (a Top 10 Intellectual Property Cases of 2018)
Maize NVP Zhengdan 958 is a proprietary of the Henan Academy of Agricultural Sciences. The male parent of the hybrid is "Chang 7-2" which belongs to the public domain. The female parent is the NVP "Zheng 58" which is owned by Jinboshi Company. In this case, the defendant Denong Company used Zheng 58 to produce and breed Zhengdan 958 under a license agreement with the NVP right holder – the Henan Academy of Agricultural Sciences – but without the permission of Jinboshi Company, the NVP right holder of the female parent Zheng 58.
Considering that the Denong Company had obtained the license from the Henan Academy of Agricultural Sciences for producing Zhengdan 958, paid the royalty fees, and invested a lot of time and effort to produce it in many places in Gansu Province, the court said that if Denong Company was asked to stop producing Zhengdan 958 maize, great economic losses will be caused. The court, instead, decided to ask Denong Company to compensate Jinboshi Company. By comprehensively evaluating the intention of the infringer, the profits gained and the continued profits would be gained from not stopping the use of the NVP Zheng 58 until the expiration of the protection term, the court supported Jinboshi Company’s claim for a compensation of CNY49,500,000 (US$7,150,000) and a reasonable expenses of CNY20,000 (US$2,890) for investigating and trying to stop the infringement.
There is another kind of NVP infringement where the infringer sells the variety under an NVP name but with blank packaging, i.e., no basic information, such as the genus or species of the variety, the breeder or vendor, quality index, appropriate planting areas, quarantine certificate number, are indicated on the package. It misleads the buyers to believe that the sold variety is a granted NVP. This behavior not only affects the NVP right, but also constitutes unfair competition which can be governed by the Anti-Unfair Competition Law.
China adopts dual-track protection for intellectual properties. The administrative authorities also have jurisdictions over NVP infringements. The right holders should choose the competent authorities and measures according to the types of infringements: See the below table.
China has started the revision of the Regulations for the Protection of New Varieties of Plants since 2019. The Supreme People's Court plans to issue the judicial interpretation named the Provisions on Application of Law in the Trial of Disputes over New Plant Variety Rights in 2021. NPV breeders and stakeholders should pay attention to the progresses and make timely adjustments to adapt to any new development.
This article is first published on Vol. 12, Issue 7 of Asia IP in August 2020.
* The authority responsible is either the Ministry of Agriculture and Rural Affairs or the National Forestry and Grassland Administration, according to the taxonomy of the NVP in the National Catalog of Protected New Varieties of Plants.