The Supreme People's Court recently concluded a case of infringement of new plant varieties through counterfeit seeds. This case involves, where an administrative penalty decision related to the production and operation of counterfeit seeds had been revoked through an effective administrative judgment, whether the evidence generated during the administrative enforcement is admissible in civil infringement disputes involving the same plant variety.

The Supreme Court in the second-instance judgment held that whether the administrative enforcement agency makes an administrative penalty decision and whether the administrative penalty decision is effective do not necessarily affect the admissibility and probative force of the evidence legally generated during the administrative enforcement process. Even if the administrative agency does not decide to impose an administrative penalty or if the administrative penalty decision is revoked, the court trying the civil infringement case should still conduct a comprehensive and objective examination on the evidence submitted by the parties involved and generated in the enforcement process. If the evidence involved is verified to be authentic, legitimate and relevant, it shall be used as the basis for determining the facts.

Liaoning A company, the owner of a new corn plant variety named "Danyu No. 405", filed a lawsuit with the court of first instance, claiming that Shandong B company’s producing and selling and Pingdu C department’s selling the "Nongxing 2126" corn seed infringe its variety rights. The main basis for their claim is an administrative penalty decision issued by the Pingdu Comprehensive Administrative Enforcement Bureau in Shandong against Shandong B company and relevant evidence generated during the enforcement process.

The court of first instance ordered Shandong B company and Pingdu C department to stop infringement, and Shandong B company was ordered to compensate Liaoning A company 400,000 yuan. Shandong B company was dissatisfied and appealed to the Supreme Court, primarily arguing that the administrative penalty decision involved in the case had been revoked by an effective judgment, and the evidence involved should not be admissible. The Supreme Court in the second-instance judgment rejected the appeal and upheld the original judgment.

The Supreme Court held in the second instance that although the penalty decision was revoked by the court's effective administrative judgment on the grounds that there was insufficient evidence to determine the quantity and value of the counterfeit seeds, other evidence generated during the administrative penalty process is not automatically deemed inadmissible. Liaoning A company claimed that Shandong B company infringed upon their rights by producing and selling counterfeit "Danyu 405" seeds under the name "Nongxing 2126." They presented evidence such as the confiscated infringing seeds and inspection reports from the administrative penalty as the basis for seeking judicial relief. The court should conduct a comprehensive examination on the evidence involved and make a comprehensive determination.

The confiscated corn seed packaging bags during the administrative enforcement bear the name and seed production license number of Shandong B company, as well as an anti-counterfeiting query QR code traceable to Shandong B company. Combined with the record information on “Nongxing 2126” and other materials from Pingdu C department, it was sufficient to determine that the alleged infringing “Nongxing 2126” seeds in this case were produced and sold by Shandong B company. Accordingly, the appeal request of Shandong B company was rejected.

The second-instance judgment of the Supreme People's Court emphasized that imposing administrative penalties on the production and operation of counterfeit seeds falls within the scope of seed market supervision, which is an important means to strengthen the supervision and management of the seed market, ensure the interests of seed users, and guarantee food security. In the process of the administrative agency’s investigating and handling counterfeit seeds, if there is evidence to prove that the counterfeit seeds actually infringe upon someone else's variety rights, the rights holder can use the materials generated during the seed supervision and inspection process as evidence to initiate a lawsuit to the court to seek civil legal remedies against the infringements of implement the authorized variety without permission.

In the trial of civil infringement cases, the people's court shall examine and determine the evidence generated by the administrative enforcement agencies in the enforcement process in accordance with the law, so as to achieve the effective coordination between administrative enforcement and civil justice and safeguard the legitimate rights and interests of variety rights holders. The evidence does not automatically lose its admissibility and probative force even if the administrative penalty decision is legally revoked.

Strengthening the protection of plant variety intellectual property requires improving the protection system through administrative law enforcement, judicial protection, industry self-discipline and other aspects to strengthen coordination to establish a comprehensive protection framework. Utilizing the relevant evidence generated during the administrative enforcement process to file infringement lawsuits is conducive for variety right holders when solving the problems of "difficulty and high cost of proof” when defending their rights. It is also conducive to achieving the effective coordination between administrative enforcement and civil justice, and promotes the continuous improvement in the rule of law environment in the seed industry market.
-- (2022) Zui Gao Fa Zhi Min Zhong No. 947

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