The Fruits of the Forbidden Tree – AG Opinion C-176/18 on the Boundaries of Plant Variety Rights

Although Regulation (2100/94/EC) on Plant Variety Rights (“PVR Regulation”) is one of the oldest pieces of EU IP law still in force, it has not been often explored by the Court of Justice. This may help explain why a question of a rather fundamental nature is currently before the Court, some 25 years after the introduction of the Regulation.
The case in which AG Saugmandsgaard Oe recently handed down his Opinion (not available in English at the time of writing) revolves around the distinction between “variety constituents” and “harvested material” (a distinction this Kat thought was rather self-evident – until reading this Opinion) pursuant to Art. 13 of the PVR Regulation. It also relates to the intricate question of how much (if any) protection the PVR Regulation affords to a right holder in the period between the publication of the application for a PVR and grant (a period that lasted over ten years in the case at hand).

Find the Nadorcott

The Case

The case relates to a PVR on Nadorcott, a clementine-type of mandarin. The right holder filed for a PVR on Nadorcott in 1995; grant was eventually published in 2006.
In the meantime (between filing and grant of the PVR), Mr. Martinez Sanchis, a Spanish farmer, purchased 506 plants from a (public) tree nursery, planted them and then started harvesting and selling the fruits.
Mr. Sanchis was sued by the Club de Variedades Vegetales Protegidas (CVVP), the right holder’s licensee. The CVVP requested both a permanent injunction and adequate compensation for infringement of the Nadorcott PVR. The Spanish Supreme Court submitted three questions to the CJEU on the interpretation of the PVR Regulation. 

The Questions

In summary, the Spanish Supreme Court asked the CJEU--
  1. whether harvesting the fruits of a protected variety that was planted before the PVR came into effect constitutes an act of “production or reproduction” within the meaning of Art. 13(2) of the PVR Regulation, or an act “in respect of harvested material” within the meaning of Art. 13(3) PVR Regulation; 
  2. whether Art. 13(2) PVR Regulation relates to all acts related to harvested material, including the harvesting itself, or whether it only relates to acts that take place after the production of the harvested material, such as possession and distribution; and
  3. whether harvested material is obtained “through unauthorized use of variety constituents” within the meaning of Art. 13(3) PVR Regulation, when the plants were purchased after the publication of the application but before the grant of the relevant PVR.
For Kat readers who are not overly familiar with the PVR Regulation, one of the underlying issues in this case is the distinction between Art. 13(2) and 13(3). Art. 13(2) sets forth a list of acts that are prohibited without the authorization of the right holder, inter alia, the production, reproduction, conditioning, offering for sale, selling, etc. of variety constituents or harvested material. However, Art. 13(3) adds the caveat that this applies to harvested material only if: (1) it “was obtained through the unauthorized use of variety constituents”; and (2) “unless the holder has had reasonable opportunity to exercise his right in relation to the said variety constituents”. 

The Opinion

On the first two questions, the AG suggests that the terms “production or reproduction” in Art. 13(2)(a) PVR Regulation should be read as these words are commonly understood. “Production or reproduction” is not commonly used to refer to harvested material, but to variety constituents. Planting and harvesting fruits does not constitute “production or reproduction” of the protected variety within the meaning of this provision, as also confirmed by the legislative history of the provision.
Defending the forbidden tree
Thus, Art. 13(2) PVR Regulation does not prohibit per se the exploitation of plant varieties to produce fruits. The right holder can, however, exercise its rights under Art. 13(3) PVR Regulation with regard to the latter.
The third question essentially asks how “unauthorized use of variety constituents” should be understood under Art. 13(3) PVR Regulation, when acts are carried out between the publication of the application and the grant of the PVR. The provision on point here is Art. 95 PVR Regulation, which provides that the holder “may require reasonable compensation”, but no injunction, for acts that were committed between the publication of the application and the grant.
Here, the AG distinguishes between the sale of plants by the tree nursery (which is not a party to these proceedings), on the one hand, and the cultivation and harvesting of the same plants by Mr. Sanchis, on the other. Under the answer given to the first two questions, cultivation and harvesting do not constitute “production or reproduction” within the meaning of Art. 13(2) PVR Regulation. Hence, for this reason alone, Mr Sanchis’ harvested material was not obtained via an “unauthorized use”.
Second, “unauthorized use” can only relate to use that “could have been authorized [or prohibited]” by the holder. Given that Art. 95 PVR Regulation only provides for adequate compensation for acts that occur between the publication of the application and the grant, the holder’s authorization is not required for any acts during this period. Hence, any use that takes place before the publication of the grant cannot be “unauthorized” within the meaning of Art. 13(3) PVR Regulation.
This is also confirmed by the fact that – contrary to European patents – the duration of the protection for PVR is provided for a period of 25 or 30 years following the grant, not the application (Art. 19 PVR Regulation). Thus, the very limited protection afforded by the PVR Regulation prior to grant is compensated for by the fact that the holder benefits from a longer period of protection.
The Fruits of the Forbidden Tree – AG Opinion C-176/18 on the Boundaries of Plant Variety Rights The Fruits of the Forbidden Tree – AG Opinion C-176/18 on the Boundaries of Plant Variety Rights Reviewed by Peter Ling on Monday, October 28, 2019 Rating: 5

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