Plant variety rights for 'Sugraone' grapes invalidated in Italy

By its decision on 1 August 2024, the Court of Bari (Specialised Business Section) declared that the Italian plant variety right (PVR) for a seedless table grape variety named 'Sugraone' was invalid on the grounds of novelty. The decision (English translation here) also dismissed the claims of trade mark infringement and invalidity.

Images from Pixabay.

'Sugraone' was the first seedless table grape variety introduced in Italian market in late 1980s. The defendants, Gianni Stea Import-Export s.r.l. and Angela Miglionico, were accused of infringement of the 'Sugraone' PVR and the SUPERIOR SEEDLESS trade mark owned by Sun World International LLC, and well as unfair competition. The defendants counterclaimed for invalidity of the PVR on the grounds of novelty and argued that the trade mark was invalid for non-distinctiveness.

This is the latest chapter in the dispute between Miglionico and Sun World. An earlier claim about the 'SugraNineteen' grape variety previously reached the Italian Supreme Court (discussed by Katfriend Roberto Manno here).

Novelty

Plant variety rights have a different standard for novelty compared to patents (see here). The latter requires “absolute novelty,” meaning that the invention must not have been disclosed before the priority date. By contrast, PVRs require “commercial novelty,” which means that the variety must not have been commercially exploited before the relevant grace period. In Italy, the test is set out in Article 103 of the Code of Industrial Property: 

1. The variety shall be deemed to be new when, as of the date of filing of the breeder application, the vegetative reproduction or multiplication material or a harvest product of the variety has not been sold or otherwise transferred to third parties, by the breeder or with his consent, for the purposes of exploitation of the variety: a) on the Italian territory for more than one year from the date of filing of the application; b) in any other Country for more than four years, or in the case of trees and vines, for more than six years.

The 'Sugraone' PVR application was filed on 14 September 1983. At the time of filing, the grace period began four years before the filing date, i.e. 14 September 1977 (but even if the current law with a six-year grace period were applied, the outcome would have been the same). The grace periods are designed to give breeders time to confirm that their varieties meet the criteria for PVR protection.

The evidence included reports of the marketing of grapes of the 'Sugraone' variety in the United States dating back to 1975. The reports showed a significant quantity of cultivation on an area of land in California that was so large it could not be justified by crop trials or selection activities alone. The nail in the coffin was testimony from the Senior Vice President of Sun World to the EUIPO, which intended to show the strong distinctive character of SUPERIOR SEEDLESS by reference to the use of the trade mark for marketing the variety since 1975.

In response, Sun World argued that novelty of a PVR application could only be destroyed by the commercialisation of propagating material, not by marketing of the harvested material (e.g. fruits). However, the Court disagreed and held that the language of "offered for sale" and "marketed" in the earlier statute must be understood as having a broad meaning (i.e. both plant and fruit). This interpretation was confirmed by the 1991 Act of the International Convention for the Protection of New Varieties of Plants (UPOV), which expressly includes harvested material (e.g. fruits) in the definition of novelty under Article 6(1). The Court said that, to decide otherwise:

... could give rise to abuse and speculation by those who, for example, after having marketed the product of the new variety abroad for many years having only initially developed the characteristics of the new variety, but not the reproduction material ... , could obtain a PVR even after the passage of a significant and uncontrollable period of time...

Trade Marks and Unfair Competition

The next issue turned on the relationship between the variety denomination 'Sugraone' and the trade mark SUPERIOR SEEDLESS [Merpel: readers who are unfamiliar with this topic can find detailed explanation here]. Sun World argued that by selling grapes under the name 'Sugraone', the defendants' actions were liable to cause confusion amongst consumers as to the origin and quality of the grapes, and also harmed Sun World's authorised distribution network. The defendants replied that Sun World's own evidence demonstrated that consumers associated the trade mark SUPERIOR SEEDLESS, not the denomination 'Sugraone', with the variety. Therefore, consumers, distributors, and retailers who purchased the grapes without the trade mark affixed would not believe that they were purchasing from a person authorised by Sun World. The Court agreed.

Finally, Sun World argued that the defendants had infringed the trade mark by removing the trade mark without authorisation. However, this presupposed the marketing of an original product from which the SUPERIOR SEEDLESS mark legitimately affixed had been removed, which contradicted Sun World's earlier argument about the unauthorised use of the propagating materials of a protected variety. The Court rejected both the claim for trade mark infringement and the counterclaim for invalidity.

Comments

The decision highlights the consequences of having a strong trade mark strategy for a plant variety that may leave consumers ignorant of the generic denomination. It also illustrates the effect of bringing harvested material within the scope of PVR protection on the novelty assessment. In short, breeders need to think carefully about the nature and timing of their marketing activities for each new variety, lest their strategies backfire later.