Infringement Dispute over New Corn Plant Variety "Danyu No. 405"

Case IV: Case involving infringement dispute over new corn plant variety "Danyu No. 405"

Case Brief:

Liaoning XX Seed Industry Science and Technology Co., Ltd. is the owner of the right to the new corn plant variety "Danyu No. 405."

Linghai XX Seed Industry Science and Technology Co., Ltd. infringed upon the right by marketing the variety under the name "Ziguang No. 4," which was ruled as infringement per a 2015 judgment.

Despite this ruling, Linghai XX Seed Industry Science and Technology Co., Ltd. continued its infringement in 2019 and 2020, using the names "Jinyu No. 118," "Anyu No. 13," and "Danyu No. 606."

Qingdao XX Agricultural Technology Development Co., Ltd. was involved in selling the infringing seeds.

Linghai XX Seed Industry Science and Technology Co., Ltd. filed a lawsuit, asking the court to order both companies to cease the infringement and jointly compensate for economic losses and reasonable expenses totaling 3 million RMB (with 1.5 million RMB as the compensation base and an additional 1.5 million RMB as punitive damages).

The court of first instance, finding that the basis for calculating punitive damages was unclear, applied statutory compensation instead, awarding Liaoning XX Seed Industry Science and Technology Co., Ltd. one million RMB for economic losses and reasonable expenses.

Dissatisfied with the first instance ruling, Liaoning XX Seed Industry Science and Technology Co., Ltd. appealed.

In the second-instance hearing, the Supreme People’s Court determined that Linghai XX Seed Industry Science and Technology Co., Ltd.'s infringement was prolonged, widespread, repeated, intentional, and egregious. Consequently, they should bear punitive compensation liability.

Considering the quantity of "Danyu No. 405" seeds harvested from 400 mu (around 65.89 acres) of infringing seeds acknowledged by Linghai XX Seed Industry Science and Technology Co., Ltd. and the sales gross profit, the compensation base of 1.5 million RMB was deemed reasonable. Thus, the court upheld Liaoning XX’s claim for 3 million RMB, including punitive damages.

Typical Significance:

This case highlights that punitive damages can be determined based on the discretion of the evidence, rather than defaulting to statutory compensation due to calculation difficulties. The judgment reflects the judiciary's commitment to implementing punitive compensation, reducing the burden on rights holders. It enhanced the deterrent effect of punitive compensation and ensured that infringers face significant consequences.