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Update on seed intellectual property protection in China

Update on seed intellectual property protection in China

The Chinese government has long focused on industrial growth based on the development of advanced technology. In two recent developments, the protection of intellectual property of seed has become a matter of national priority within this focus. This Special provides an introduction on the subject and describes these recent developments.

Introduction

China is one of the fastest growing seed markets worldwide  attracting many foreign investors. Despite the opportunities, some investors have postponed entering the Chinese market due to concerns on inadequate seed intellectual property (“IP”) protect on. Within the Chinese IP-led industrial growth strategy, seed IP protection on has recently become a priority. As stated in the PRC 12th Five-Year Plan (agricultural section), China will strengthen seed IP protection on in order to continue modernizing the seed industry. This article provides an update on the latest steps taken to protect seed IP in China.

Seed IP infringement targeted in national campaign

On 22 February 2012, the Chinese Ministry of Agriculture (“MOA”) announced a special campaign against seed IP infringement. The campaign focused on trademark counterfeiting and illegal seed production. The MOA will cooperate with 9 other authorities such as the Ministry of Public Security and the Supreme Court on combating seed IP infringements. The enforcement measures of this campaign consist of administrative measures and penalties, such as seizures of shipments, orders to stop production and fi nes. Administrative punishments and measures have a substantial impact in China as there are limited possibilities in practice to appeal these decisions through a court procedure. This is not the first time that the MOA launched a campaign on seed IP infringement. In 2011 a similar campaign was launched with substantial success. Major agricultural areas reported seizing substantial amounts of illegally produced seeds. Chongqing for example reported the seizure of around 12,000 kilograms of seeds which infringed plant variety rights in 2011. The total value of seized seeds was estimated around 2 million RMB (approximately EUR 240, 000).

Typical case

In China, courts at all levels usually follow typical cases published by the Supreme Court. These cases do not formally constitute “case law” or “jurisprudence”, but are seen as guiding examples on liability and damages by lower courts. On 23 June 2010, the Supreme Court published a typical case on seed IP infringement. In this case, the defendant purchased seeds from other companies, reproduced them without a license and claimed to have developed them himself. Through the sale of these illegally produced seeds and claims to the inventor of the seed IP, the defendant made profits of approximately 4.3 million RMB (EUR 490,000). The Supreme Court sentenced the defendant to 13 years imprisonment and fined him 3.05 million RMB (EUR 370,000). Local courts may refer to these sentencing criteria when deciding upon the similar cases. The substantial punishment in the typical case will thus be followed by local courts and be a deterrent for IP infringers.

Implementation and practice

The measures on combating seed IP infringements included in the latest campaign of the MOA and criteria included in the Supreme Court’s typical case will be further implemented in China’s major agricultural areas. The local MOA in these areas will cooperate with other local authorities such as police bureau to crack down on seed IP infringements. Local courts will also refer to the typical case when deciding upon the seed IP infringement case. Implementation may vary in different areas. An area focusing on the corn seed production will focus on measures on corn seed IP protection. Courts in undeveloped cities may further not strictly follow the criteria of the typical case while courts in developed cities may impose higher fines and award higher damages.

Conclusion

Progressively, China has begun to improve seed IP protection. The latest national campaign and Supreme Court typical case signal the importance of seed IP protection in 2012. As a result we anticipate better protection for seed IP owners and possibilities to successfully claim damages from infringers. In practice, we note that IP protection still varies per area and recommend researching the level of seed IP protection prior to investment

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