Payment for use of protected barley seeds: when prospects for dodging payment recede ...

Case C‑242/14 Saatgut-Treuhandverwaltungs GmbH v Gerhard und Jürgen Vogel GbR, Jürgen Vogel, Gerhard Vogel is a request for a preliminary ruling from the Court of Justice of the European Union (CJEU) made by the Landgericht Mannheim (Germany), on a Community plant variety matter. Credit must go to the CJEU for dealing with this reference so speedily. The request was only received at the CJEU on 19 May 2014 and we have a ruling within just 14 months -- a sure sign that (i) the court is getting better at dealing with these references (which can provide a lengthy break in the national litigation that generates them) or that the questions, or (ii) the questions are getting easier.

So what led to this reference in the first place? Saatgut-Treuhandverwaltungs (STV), an association of plant variety right holders, managed the rights of the holder of the Finita winter barley variety, which was protected under Regulation 2100/94 [on Community plant variety rights]. STV published an online list setting out all the protected plant varieties the rights to the administration of which it has been granted in the course of various marketing years, as well as the planting fees payable for those varieties. Each year STV would then ask farmers, without specifying a particular variety, to provide information on any planting of protected plant varieties for which they managed the rights, sending to them planting declaration forms for that purpose, together with a guide listing all the protected varieties for which they administered the rights in the relevant marketing year, together with the corresponding right holders and persons enjoying rights of exploitation.

The Vogels, who had no contractual relations with STV, did not respond to those requests for information. However, in December 2011 STV became aware that in the marketing year 2010/11 the Vogels had arranged for 35 quintals of Finita seed to be processed. STV wrote to the Vogels, asking them to verify this information and to send it information concerning that planting by 20 June 2012 at the latest. Again, the Vogels did not reply. In July 2012 STV claimed payment from the Vogels of 262.50 euro, this being the full 'C-Licence' fee that would be due for licensed use of Finita seeds, as compensation for the damage suffered as a result of the undisclosed planting of that protected variety. No payment was forthcoming, so STV sued for it under Articles 94(1) and (2) of the Regulation.

The worst bit about bringing in the barley was
helping George find his lost contact lens ...

Said STV, the Vogels are obliged to pay to it reasonable compensation in an amount equivalent to the full C-Licence fee, under Article 94(1), because they carried out planting ‘without being entitled to do so’ within the meaning of that provision, and were not entitled to avail themselves of the derogation in Article 14(1) since they failed to comply with the requirement to pay equitable remuneration laid down in Article 14(3) . This obligation to pay is enforceable, STV added, whether a request for information is made by the holder of the protected plant variety or not, the farmer must make the payment before sowing and the protected seed and, in any event, by the end of the marketing year in which the protected seed is planted.  Finally, STV maintained, the information published on its website and the guide listing all the protected varieties which it managed, which was sent each year to farmers, would let the Vogels calculate for themselves and then pay the amount due for planting those varieties.

The Vogels [who could have saved an awful lot of hassle and inconveniencing a good many IP bloggers and commentators, whether they were right or wrong, by just paying up 262.50 euro and getting on with their lives, says Merpel] denied liability to pay the full C-Licence fee and said they owed, at the most, a reduced fee, on the ground that the planting was ‘authorised’ within the meaning of Article 14(1). Nor were they required to reply to STV's request for information, since that request did not relate to the current marketing year. In other words, there would have to be an infringement of the obligation to provide information in order for the conditions governing entitlement to compensation to be satisfied.

The Landgericht Mannheim was unsure if STV was right that a farmer is required to pay, of his own initiative, the remuneration referred to in Article 14(3) of Regulation 2100/94 before sowing, in particular in the light of Article 6(1) of Regulation 1768/95 [implementing rules on the agricultural exemption provided for in Article 14(3) of Council Regulation 2100/94]. Accordingly that court decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1) Is a farmer who has planted propagating material obtained from a protected plant variety without having concluded a contract for so doing with the plant variety right holder required to pay reasonable compensation, as provided for in Article 94(1) of Regulation No 2100/94, and — if he has acted intentionally or negligently — to compensate the holder for any further damage resulting from the infringement of the plant variety right in accordance with Article 94(2) of that regulation, where he has not yet fulfilled his obligation under the fourth indent of Article 14(3) of that regulation, in conjunction with Articles 5 and 6 of Regulation 1768/95, to pay an equitable remuneration (planting fee) at the time when he actually made use of the product of the harvest for propagating purposes in the field?

(2) If the first question is to be answered to the effect that the farmer can still fulfil his obligation to pay an equitable planting fee even after he has actually made use of the product of the harvest for propagating purposes in the field, are the aforementioned provisions to be interpreted as fixing a period within which a farmer who has planted propagating material obtained from a protected plant variety must fulfil his obligation to pay an equitable planting fee in order for the planting to be capable of being regarded as “authorised” for the purposes of Article 94(1) of Regulation 2100/94 in conjunction with Article 14 of that regulation?’

On 5 March the Advocate General advised the CJEU to rule as follows:

Articles 14 and 94 of Council Regulation ... 2100/94 ... in conjunction with Article 5 et seq. of Commission Regulation ... 1768/95 ... implementing rules on the agricultural exemption provided for in Article 14(3) ... must be interpreted to the effect that a farmer is able to make use of the product of the harvest which he has obtained by planting, on his own holding, propagating material obtained from a protected variety without the authorisation of the right holder, provided he pays the holder an equitable remuneration in accordance with Article 14 within a period beginning on the date on which the farmer actually seeded the product of his harvest and expiring at the end of the marketing year in which that use took place.

The CJEU accepted the position of the Advocate General and dismissed the arguments raised by the Vogels, who by this time had been supported by the Spanish government. Said the CJEU [at 28 to 31]:

28 ... to allow a farmer who has planted propagating material obtained from a protected plant variety (farm-saved seed) to fulfil, without any time-limit, the obligation to pay equitable remuneration by way of derogation and, thereby, avail himself indefinitely of the derogation under Article 14 ... would deprive the legal proceedings provided for in Article 94 of that regulation of any useful purpose. Moreover, since it provides that proceedings may be brought against any infringer who has failed to comply with that payment obligation, Article 94 ... precludes such a person from being able to regularise his situation at any time, including after the holder of the plant variety right has discovered an undisclosed use of the protected plant variety. If follows that only by defining a payment period is it possible to ensure that such proceedings are effective.

29 ... the holders of plant variety rights alone are responsible for the control and supervision of the use of the protected varieties in the context of authorised planting and they depend, therefore, on the good faith and cooperation of the farmers concerned [citing Case C-509/10 Geistbeck, noted by the IPKat here]. Accordingly, the absence of a precisely defined period within which farmers are required to comply with the obligation to pay equitable remuneration by way of derogation is liable to encourage farmers to defer that payment indefinitely, in the hope of avoiding payment altogether. To allow farmers to avoid complying with their own obligations towards holders in such a way would be at odds with the objective set out in Article 2 of Regulation No 1768/95 of maintaining a reasonable balance between the legitimate interests of the farmers and the holders concerned.

30 ... it is apparent from Article 7(2) of Regulation No 1768/95 that the marketing year during which payment of the remuneration is due starts on 1 July and ends on 30 June of the subsequent calendar year. Although that provision concerns the definition of areas dedicated to growing plant varieties by small farmers, it clearly shows that the marketing year during which propagating material obtained from a protected plant variety (farm-saved seed) was planted was regarded by the institution responsible for that regulation, when establishing the implementing rules for Article 14(3) ..., as the relevant period in which the equitable remuneration by way of derogation is to be paid.

31 Thus, if he has failed to pay the equitable remuneration by way of derogation within the period that expires at the end of the marketing year during which he planted propagating material obtained from a protected plant variety, without having concluded a contract for so doing with the plant right holder, a farmer must be regarded as having effected, without being entitled to do so, one of the acts set out in Article 13(2) of Regulation No 2100/94, which entitles the holder to bring the forms of action provided for in Article 94 of that regulation.

Accordingly the CJEU answered the Landgericht Mannheim's questions thus:

In order to be able to benefit from the derogation provided for in Article 14 ... from the obligation to obtain the authorisation of the holder of the plant variety right concerned, a farmer who has planted propagating material obtained from a protected plant variety (farm-saved seed) without having concluded a contract for so doing with the holder is required to pay the equitable remuneration due under the fourth indent of Article 14(3) of that regulation within the period that expires at the end of the marketing year during which that planting took place, that is, no later than 30 June following the date of reseeding.

This seems about right, thinks the IPKat, though the intention of the EU legislature could have been expressed a little more simply and clearly.

The difference between winter barley and spring barley, here
Barley wine here and here