Верховный суд КНР обязал производителя пшеницы выплатить 200 тысяч юаней за нарушение прав на сорт, проданный после истечения срока защиты

(2026) 最高法知民终51号 — decided April 3, 2026; published August 4, 2026 The Intellectual Property Court of the Supreme People’s Court (SPC) has issued a decision addressing a recurring problem in plant variety right enforcement: what happens when the accused infringer produces protected propagating material during the term of protection, but the resulting seed is not sold until after the variety right has expired. The court held that the timing of production, not the timing of sale, controls the infringement analysis, and that a sale occurring after expiration does not immunize seed that was unlawfully produced while the right was still in force. The Crop Research Institute of Shandong Academy of Agricultural Sciences (referred to as Company A in the published decision), as the plaintiff-appellant, held an exclusive license to enforce plant variety rights in the wheat variety “Jimai 22.” The variety right had been granted on May 1, 2009, with a 15-year protection term that expired on April 30, 2024. Company A’s investigators, through a notarized purchase on August 21, 2024 – i.e., after the protection period had expired – bought wheat seed bags labeled “中博科济麦22” from a retailer in Dong’e County, Shandong. The packaging identified the defendant-appellant (Company B) by name, trademark, and seed production/business license number. Company B denied having produced, propagated, or sold the accused seed and argued that, because the notarized purchase occurred after the protection period ended, no infringement could be found. Company B also disputed the amount of damages awarded below. The first-instance court (Jinan Intermediate People’s Court) found infringement but limited damages to RMB 50,000, reasoning that because the sale itself occurred after the protection period expired, the fact of expiration should weigh in favor of a reduced award. Both parties appealed. The central issue on appeal was whether the expiration of the protection period on April 30, 2024 barred a finding of infringement, given that the only proven sale transaction occurred in August 2024. The SPC rejected the notion that sale timing is dispositive. It reasoned that plant variety protection must account for the seasonal and biological cycle of the crop in question – a “whole-chain” approach to protection. Production, propagation, processing, and eventual market sale of a given crop variety can span a period of months and may straddle the date on which the protection term expires. Accordingly, courts may use the sale date, together with the known planting season and reproduction cycle of the specific variety, to reasonably infer the date on which the accused seed was actually produced or propagated. Applying this to the facts, the court noted that Jimai 22 wheat is typically sown starting in early October and harvested by late June of the following year. Given that Company A’s investigators were able to purchase the accused seed in August 2024 – only about three months after the protection period expired on April 30, 2024 – the seed necessarily must have been produced and processed considerably earlier, placing the actual production activity within the protection period (no later than around October 2023). This inference was corroborated by documentary evidence: when Company B applied on June 3, 2024 to amend its seed production and business license to add “Jimai 22” as a licensed variety, it submitted a Wheat Seed Multiplication and Purchase Agreement dated October 3, 2023, entered into with a third-party grower, covering 700 mu of planting area and a purchase quantity of 280,000 kg. The court treated this agreement – submitted by Company B itself in support of its own licensing application – as corroborating evidence that Company B had commenced unauthorized production of Jimai 22 while the variety right was still in force. The court then articulated the controlling principle: seed produced without authorization during the protection period does not become lawful merely because the protection period subsequently expires. Where an infringer sells, after expiration, seed that it produced or propagated without authorization during the protection period, that sale is a “natural continuation” of the underlying production infringement and itself constitutes infringement of the variety right. The court accordingly rejected Company B’s argument that expiration of the protection term extinguished liability for pre-expiration production simply because the sale transaction was consummated afterward. The court separately rejected Company B’s argument that the variety right had lapsed earlier due to nonpayment of annual fees after 2016, noting that China ceased collecting plant variety protection annual fees as of April 1, 2017, so nonpayment after that date had no bearing on the right’s validity; the 15-year term ran undisturbed from the May 1, 2009 grant date to April 30, 2024. On the question of whether Company B was in fact the producer, the SPC applied a burden-shifting analysis: because the accused packaging displayed Company B’s name, registered trademark, and production license number, Company A had established a high probability that Company B was the producer, shifting the burden to Company B to produce rebuttal evidence sufficient to render the fact genuinely uncertain. Company B’s arguments – that the packaging design did not match its authorized packaging, and that a QR code on the package did not resolve to Company B’s identifiers – were found insufficient, particularly since packaging Company B submitted for a different, concededly genuine variety (“鲁宁9**”) was visually near-identical in design to the accused packaging. The court held that Company B failed to meet its rebuttal burden and affirmed the finding that Company B produced, propagated, and sold the infringing seed. Having found that the pre-expiration production, and the post-expiration sale that continued it, both constituted infringement, the SPC recalculated damages based on Company B’s infringer’s profit. Using the 280,000 kg quantity documented in the October 2023 multiplication agreement, and estimating a per-catty (500 grams) profit margin of RMB 0.5 (derived from the minimum recorded sale price of RMB 1.6/catty against the 2024 state minimum wheat purchase price of RMB 1.18/catty, rounded upward to account for uncertainty), the court calculated infringer’s profit exceeding RMB 280,000 – surpassing the RMB 200,000 Company A had sought on appeal. The court awarded the full RMB 200,000 requested (inclusive of reasonable enforcement costs such as notarization fees and attorney’s fees), reversing the first-instance court’s RMB 50,000 award, which the SPC found had improperly treated the expiration of the protection period as a mitigating factor. The SPC vacated the first-instance judgment and ordered Company B to pay Company A RMB 200,000 in damages and reasonable enforcement expenses within ten days, with all first- and second-instance court fees assessed against Company B. The judgment is final. The decision reinforces that plant variety protection extends to the entire production-to-market chain of a seasonal crop and that courts may infer production timing from harvest/planting cycles and sale dates rather than requiring direct proof of the exact production date. It also confirms that expiration of a variety right’s term is not a basis for reducing liability for, or the availability of relief for, production activity that occurred while the right remained valid – even where the corresponding sale of the resulting seed takes place after expiration. The full text of the decision with redacted party names is available here (Chinese only).