Court orders rare large payout in new corn variety case

Beijing Denong Seed Co Ltd has been ordered to pay millions of yuan in damages after losing its appeal over the sale of new plant varieties in a recent legal case in Henan province.

The dispute involved two corn varieties - Zheng 58 and Zhengdan 958 - with the latter being the hybrid of the former and another variety of corn.

Feilong Seed, headquartered in Xingyang, Henan province, filed an application with the former Ministry of Agriculture, renamed the Ministry of Agriculture and Rural Affairs, in May 2000 to secure the status of a new plant variety for Zheng 58. The status was granted in August 2002.

The rights to Zheng 58 were transferred to Henan Goldoctor Seeds in December 2008.

Henan Academy of Agricultural Sciences, which had developed another corn variety, Zhengdan 958, also applied for a new plant status shortly after that of Zheng 58 in August 2000, which was granted in January 2002.

The academy signed a licensing deal with Denong in April 2010, authorizing the seed company to sell the corn hybrid Zhengdan 958 from July that year to the end of 2016.

Goldoctor initiated legal procedures against Denong and the academy with the Zhengzhou Intermediate People's Court in August 2014, claiming that they had violated its rights to new plant variety Zheng 58.

The court in Zhengzhou, capital of the province in Central China, ruled in favor of Goldoctor in 2015, ordering Denong to pay 49.52 million yuan ($7.27 million) in damages and legal expenditure.

Of that amount, the academy was ruled to be liable for 3 million yuan in damages.

The defendants then appealed the decision to the Henan High People's Court. However, the ruling was upheld.

Denong's parent company, Wanxiang Denong, released a public announcement in mid-June, saying that it would apply for a retrial with the Supreme People's Court in a bid to defend its interests.

The court said Denong needed to secure the authorization from not only the rights owner of the Zhengdan 958 derivative, but also from that of its parent variety, Zheng 58, in order to manufacture and sell the seed variety.

Weak awareness of protection, a legal system that has yet to be improved and difficulties in collecting evidence have contributed to low compensation in most new plant variety cases, Cheng Yuanlong, a partner of the Chengdu branch of AllBright Law Offices, told China Intellectual Property News.

"The high damages decided on in the Zheng 58 case will act as a model for the industry," Cheng said.

Chen Hong, an official with the Dement Center for Science and Technology at the Ministry of Agriculture and Rural Affairs, told the Beijing-based newspaper that to better protect new plant varieties, China needs to improve its legal system, including amendments of existing regulations and expansion of the protection coverage.

Increasing cooperation between administrative enforcement and judicial protection is another aspect that needs to be given attention, Chen added.

(China Daily 08/02/2018 page17)