“‘Huang Hua Zhan’ Rice Variety”

• 1. According to Art. 1 of the “Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases Involving Disputes Over Infringement of New Plant Variety Rights”, a company that has the exclusive licence to enforce the rights of a new plant variety is an eligible plaintiff and is entitled to take legal action against any alleged infringement in its own name.

• 2. Article 4(1) of “Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases Involving Disputes Over Infringement of New Plant Variety Rights” stipulates that field observation, genetic fingerprinting spectrum detection and other test methods may be applied for specialized areas involved in cases of disputes over infringement of new plant variety rights.

• 3. Article 73 of the Seed Law stipulates that damages awarded in infringement of new plant variety rights cases shall be based on the actual losses sustained by the rights holder. If the actual loss is difficult to quantify, damages may be based on the financial gains from the infringing operations. If it is difficult to quantify both the financial loss of the rights holder and the gains from the infringing operations, the licence fees for the new plant variety rights can be used as a base figure to be then multiplied. When determining the amount of damages, reasonable expenses on infringement prevention efforts shall be considered. For infringement cases with aggravating factors, damages awarded can range from one to three times of the amount reached using the above criteria. If it is difficult to quantify the losses of the rights holder or the gain from the infringement operations or the licence fees for the rights of a new plant variety, the People’s Court may award damages up to CNY 3 million subject to the type of rights (of a new plant variety), the nature and circumstances of the infringement, and so on.

• 4. Whether a company has a seed production and trade licence is irrelevant to whether it has suffered financial losses.

• 5. The law does not proscribe a rights owner and an infringer from reaching an agreement in advance regarding liability and the amount of damages. Given the complexity involved in evidence gathering and high litigation costs, parties should be allowed to agree on damages within the scope of private autonomy. This includes agreements reached before an act of infringement takes place or after it has taken place. Such an approach does not contravene with relevant provisions under Art. 73 of the Seed Law.

• 6. Article 13 of the “Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Cases Involving Disputes Over Infringement of New Plant Variety Rights (II)” stipulates that if a party sells a product that it does not know infringes on the rights of a licence holder and indeed need not know that the said product infringes on the rights of a licence holder, and the seller can prove that the said product is obtained from a legal source, a People’s Court may rule that the seller is not jointly liable for damages. However, the court must order the seller to stop the sales and pay any reasonable expenses the rights owner has incurred during the process of preventing infringement activities. With regard to the “legal source”, a seller must in general provide evidence to prove that the purchase channel is legal, the pricing is reasonable, there is a physical and actual supplier, and the sales activities comply with relevant production and trade licensing regulations, etc.