Lusheng, Rouse's strategic partner in China, has helped its client ENZAFruit New Zealand International Limited, a subsidiary of T&G Global, a leading New Zealand-based fresh produce business, secure the high amount of compensation for a vegetative PVR infringement civil case, following the final ruling by the Supreme People’s Court of the People’s Republic of China. The Supreme People’s Court has ordered the infringer to destroy all illegally propagated plant materials.
In this second instance ruling, Lusheng used its years of PVR filing experience to expertly secure punitive damages totalling RMB 3.3 million (£319,000) to ENZAFruit.
This is a remarkable compensation amount awarded for a PVR infringement case, with the court doubling the illegal revenues generated from the infringing activities to calculate the punitive damages based on the defendant’s demonstration of malice and serious infringement.
According to the Standing Committee of the National People's Congress’ inspections of the enforcement of the Seed Law in 2023, the average total for damages is about RMB 425,000 (£54,000).
The decision upholds an earlier ruling regarding the protection of ENZAFruit’s ‘Scilate’ apple plant variety rights by the Lanzhou Intermediate Court of Gansu Province in November 2023. The court found that the defendant had infringed ENZAFruit’s IP rights by unlawfully cultivating and selling ‘Scilate’ plant variety material and apples harvested from the illegal materials. The Supreme Court ordered the infringer to cease all violations and to destroy illegally propagated plant materials to protect the plaintiff’srights and interests.
Lusheng’s IP litigation team proved this by investigating, collecting and conducting a DNA analysis of the necessary propagation materials during the sapling planting and fruit harvesting seasons from several orchard sites in China.
The judgement by the Supreme People’s Court is a few of its kind, setting a precedent for foreign and domestic PVR holders by extending protection over any harvested fruit to propagation material of any variety, following the recent strengthening of China’s Seed Law.
Sunny Su, Lusheng principal, Digital and Commercial Team, commented: “This successful case underscores the increasing importance of IP protection for local and foreign brand owners in China's agrifood industry, particularly given the rising demand for quality produce. Recognising the significant time, financial investment, and human resources required in the plant breeding process, this ruling highlights the enforceability of IP rights for asexually propagated materials like fruits and horticultural plants. We believe this outcome, supported by the comprehensive protection offered under the newly implemented Seed Law, will encourage local and international PVR holders to confidently protect their assets and invest in China.”
Liping Xu, Lusheng senior litigator emphasized: “This case represents one of the rare instances in the new plant varieties where punitive damages have been applied in high-compensation cases. The Supreme People's Court elaborated on how harvested materials impact variety rights holders and concluded that calculating damages based on these infringing harvested materials better protects the competitive interests of these rights holders. Furthermore, the destruction of illegally propagated plant materials is the most effective means of safeguarding the interests of PVR holders.”
Morgan Rogers at ENZAFruit added: “This landmark ruling underscores China's commitment to protecting plant variety rights, giving T&G Global greater confidence in our Chinese investments. With stronger IP protection, we can expand our licensing of premium varieties like ENVY® branded apples, benefiting Chinese consumers, partners, growers and our business. This decision paves the way for T&G Global to accelerate our growth plans and further contribute to China's thriving horticulture sector."
With the defendant’s appeal dismissed, ENZAFruit will now also be entitled to file a new lawsuit and seek further compensation for the infringement of rights since the initial 2023 judgement.