Tianjin Tianlong Seeds Science and Technology Co., Ltd ...Tianjin Tianlong Seeds Science and Technology Co., Ltd. and Jiangsu Xunong Seeds Science and Technology Co., Ltd., A Dispute

Copyright 2017 by Stanford University

Tianjin Tianlong Seeds Science and Technology Co., Ltd. and

Jiangsu Xunong Seeds Science and Technology Co., Ltd.,

A Dispute over Infringement of Rights to New Plant Varieties

Guiding Case No. 86

(Discussed and Passed by the Adjudication Committee of the Supreme People’s Court

Released on March 6, 2017)

CHINA GUIDING CASES PROJECT

English Guiding Case (EGC86)

July 26, 2017 Edition∗

∗

The citation of this translation of this Guiding Case is:《天津天隆种业科技有限公司与江苏徐农种业科

技有限公司侵害植物新品种权纠纷案》 (Tianjin Tianlong Seeds Science and Technology Co., Ltd. and Jiangsu

Xunong Seeds Science and Technology Co., Ltd., A Dispute over Infringement of Rights to New Plant Varieties),

STANFORD LAW SCHOOL CHINA GUIDING CASES PROJECT, English Guiding Case (EGC86), July 26, 2017 Edition,

http://cgc.law.stanford.edu/guiding-cases/guiding-case-86. The original, Chinese version of this case is available at

《中国法院网》(WWW.CHINACOURT.ORG), http://www.chinacourt.org/article/detail/2017/03/id/2574945.shtml. See

also 《最高人民法院关于发布第 16批指导性案例的通知》 (The Supreme People’s Court’s Notice Concerning

the Release of the 16th

Batch of Guiding Cases), issued on and effective as of Mar. 6, 2017,

http://www.chinacourt.org/law/detail/2017/03/id/149260.shtml.

This document was primarily prepared by Oma Lee, Lear Liu, Sean Webb, Peter Witherington, and Dr.

Mei Gechlik; it was finalized by Peter Witherington, Dimitri Phillips, and Dr. Mei Gechlik. Minor editing, such as

splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings, was done to

make the piece more comprehensible to readers; all footnotes, unless otherwise noted, have been added by the China

Guiding Cases Project. The following text is otherwise a direct translation of the original text released by the

Supreme People’s Court.

2017.07.26 Edition


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Keywords

Civil Infringement of Rights to New Plant Varieties Mutual Licensing

Main Points of the Adjudication

The holding [of the rights to] the male and female parents of a new plant variety by,

respectively, the party on the one and [the party on] the other side [of a dispute], who cannot

reach a mutual licensing agreement, such that the production of the new plant variety cannot

continue, harms the interests of both sides and is inconsistent with the purpose of cooperative

breeding. In order to preserve social and public interests, safeguard national food security,

promote transformations for applications of the new plant variety, and ensure the continued

production of the widely planted new variety, a people’s court may, on the basis of the

consideration that the male parent and the female parent have essentially the same value to the

production of the new plant variety, directly order the parties to mutually license [their respective

rights] to each other and to mutually exempt each other from the corresponding licensing fees.

Related Legal Rule(s)

Article 5 of the Contract Law of the People’s Republic of China1

Article 2, Article 6, and Article 39 of the Regulation of the People’s Republic of China on

the Protection of New Plant Varieties2

Basic Facts of the Case

Tianjin Tianlong Seeds Science and Technology Co., Ltd.3 (hereinafter referred to as

“Tianlong Company”) and Jiangsu Xunong Seeds Science and Technology Co., Ltd.4

(hereinafter referred to as “Xunong Company”) mutually treated each other as defendants and

1 《中华人民共和国合同法》 (Contract Law of the People’s Republic of China), passed and issued on

Mar. 15, 1999, effective as of Oct. 1, 1999, http://www.npc.gov.cn/wxzl/wxzl/2000-12/06/content_4732.htm. 2 《中华人民共和国植物新品种保护条例》 (Regulation of the People’s Republic of China on the

Protection of New Plant Varieties), passed and issued by the State Council on Mar. 20, 1997, effective as of

Oct. 1, 1997, amended two times, most recently on July 29, 2014, effective as of July 29, 2014,

http://www.gov.cn/gongbao/content/2016/content_5139623.htm. 3 The name “天津天隆种业科技有限公司” is translated herein as “Tianjin Tianlong Seeds Science and

Technology Co., Ltd.” in accordance with the English name appearing for it in the document available at

http://www.jsfy.gov.cn/pdf/20140422.pdf. 4 The name “江苏徐农种业科技有限公司” is translated herein as “Jiangsu Xunong Seeds Science and

Technology Co., Ltd.” in accordance with the English name appearing for it in the document available at

http://www.jsfy.gov.cn/pdf/20140422.pdf.

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brought, in the [same] people’s court, two separate lawsuits [involving] infringement of rights to

new plant varieties.

On November 10, 2000, the rice variety 9 You 418, a three-line japonica hybrid rice5

jointly cultivated by North China Japonica Hybrid Rice Engineering Technology Center6 ([this

center] and Liaoning Rice Research Institute7

are the same institution with two different

signboards) and Xuzhou Agricultural Science Institute,8 passed the national validation for crop

varieties. The rice variety 9 You 418 originates from the female parent 9201A and the male

parent C418.

On December 30, 2003, Liaoning Rice Research Institute applied to the national Ministry

of Agriculture9 for the rights to the rice variety C418 as a new plant variety. On May 1, 2007,

[the institute] was granted the rights, and it licensed to Tianlong Company the exclusive right to

exploit the new plant variety C418. On September 25, 2003, Xuzhou Agricultural Science

Institute applied to the national Ministry of Agriculture for the protection of the rights to the rice

variety Xu 9201A, as a new plant variety, which it selectively bred. On January 1, 2007, [the

institute] was granted the rights. On January 3, 2008, Xuzhou Agricultural Science Institute

licensed to Xunong Company the exclusive right to exploit the new plant variety Xu 9201A.

[The court] handled the case and ascertained that the combined groups used by Xunong

Company and Tianlong Company in the production of 9 You 418 were completely the same.

Both [parties] used the male parent C418 and the female parent Xu 9201A.

On November 14, 2010, based on Tianlong Company’s application, the first-instance

court entrusted the Hefei Testing Center of the Ministry of Agriculture to carry out a DNA

appraisal [to determine] whether a parent-child relationship exists between C418, the variety for

which rights had been granted, and [9 You 418,] the allegedly infringing variety, which Tianlong

Company preserved as evidence [in the presence of] notaries. The test conclusions were: using

48 rice SSR markers from the National Standard GB / T20396-2006 to carry out the marker

analysis of the DNA of 9 You 418 and C418, the results showed that in all the tested markers, 9

You 418 completely inherited the banding patterns of C418; it could be determined that a parent-

child relationship exists between C418 and 9 You 418.

5 For more discussion of this type of rice, see, e.g., Jie Guo et al., Overcoming Inter-Subspecific Hybrid

Sterility in Rice by Developing Indica-Compatible Japonica Lines, SCIENTIFIC REPORTS 6 (2016),

https://www.nature.com/articles/srep26878; 邓华凤 (DENG HUAFENG),《中国杂交粳稻》（中国农业出版社

2008 年版） (JAPONICA HYBRID RICE IN CHINA (China Agriculture Press, 2008)),

http://www.cypressbooks.com/proddetail.php?prod=9787109122642. 6 The name “北方杂交粳稻工程技术中心” is translated herein literally as “North China Japonica Hybrid

Rice Engineering Technology Center”. 7 The name “辽宁省稻作研究所” is translated herein literally as “Liaoning Rice Research Institute”.

8 The name “徐州农科所” is translated herein literally as “Xuzhou Agricultural Science Institute”.

9 The name “农业部” is translated herein as “Ministry of Agriculture” in accordance with the translation

used on the English website of the Ministry of Agriculture of the People’s Republic of China,

http://english.agri.gov.cn.

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On August 5, 2010, based on Xunong Company’s application, the first-instance court

entrusted the Hefei Testing Center of the Ministry of Agriculture to carry out DNA appraisals [to

determine] whether parent-child relationships exist between the allegedly infringing variety,

which Xunong Company preserved as evidence [in the presence of] notaries, and C418 and Xu

9201A. The test conclusions were: using 48 rice SSR markers from the National Standard GB /

T20396-2006 to carry out the marker analysis of the DNA of the allegedly infringing variety and

[the DNAs] of C418 and Xu 9201A, the results showed that in all the tested markers, the

allegedly infringing variety completely inherited the banding patterns of C418 and Xu 9201A; it

could be determined that parent-child relationships exist between the allegedly infringing variety

and C418 and Xu 9201A.

In the written request of the application for the C418 variety rights submitted by Tianlong

Company, the contents of the specification included: C418, a japonica-type restorer line with a

form close to indica and specific affinity,10

was cultivated by [using] the “indica-japonica bridge”

restorer production technique11

brought about in the world by North China Japonica Hybrid Rice

Center12

and by using intermediate materials between indica and japonica [varieties] to construct

gene groups beneficial to both indica and japonica [varieties]. C418 has higher specific affinity,

which is a type of property possessed by restorer lines cultivated by the “indica-japonica bridge”

method, as manifested in the first filial generation’s better coordination of the ecological and

genetic differences between the genomes of indica and japonica [varieties], thus providing a

better solution to the obstacles generally posed by indica and japonica hybrids, including low

seed setting rate, poor grain plumpness, temperature sensitivity, and premature aging. C418

combines the excellent traits of indica and japonica [varieties], and the hybrid combinations that

it produces generally show a higher seed setting rate and some cold tolerance.

In their letter to Tianjin Seed Management Station,13

Xunong Company and Xuzhou

Agricultural Science Institute claimed that Xu 9201A, a middle-season japonica sterile line that

they selectively bred of their own volition, passed [the national validation for crop varieties] in

1996. Prior to the validation, it was named “9201A”, abbreviated to “9A”; after the validation, it

was named “Xu 9201A”. [They] used Xu 9201A as the female parent to successively breed

various three-line japonica hybrid rice combinations, including 9 You 138, 9 You 418, and 9

You 24. In the application for national validation of the [9 You 418] crop variety completed in

10

For more discussion of the concept of “affinity“, see SANT S. VIRMANI, HETEROSIS AND HYBRID RICE

BREEDING (Springer-Verlag, 1994), at 49, https://books.google.gr/books/about/

Heterosis_and_Hybrid_Rice_Breeding.html?id=hIJAGJrCCCIC&redir_esc=y. 11

For more discussion of this technique, see, e.g., 杨振玉等 (YANG Zhenyu et al.), 中国杂交粳稻发展与展

望 (Development and Prospect of Hybrid Japonica Rice in China), 《科学通报》(CHINESE SCIENCE BULLETIN),

Volume No. 61, Issue No. 35 (2016), http://engine.scichina.com/publisher/

scp/journal/CSB/61/35/10.1360/N972016-01132?slug=full text. 12

The original text reads “北方杂粳中心” (“North China Japonica Hybrid Rice Center”), which is likely

meant to be “北方杂交粳稻工程技术中心” (“North China Japonica Hybrid Rice Engineering Technology Center”),

as mentioned earlier in this Guiding Case. 13

The name “天津市种子管理站” is translated here literally as “Tianjin Seed Management Station”.

2017.07.26 Edition


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2000, the content about the parents was drawn from [the description “]variety origins 9201A×

C418[”] used when the two groups were combined in 1995. In the July 2003 application to the

Ministry of Agriculture for the protection of the new variety rights to Xu 9201A,14

it was

indicated in the variety specification [included in] the written request of the variety rights

application that Xu 9201A is combined [with other] groups to breed various hybrid combinations,

including 9 You 138, 9 You 418, 9 You 24, 9 You 686, and 9 You 88. Xu 9201A and 9201A are

the same middle-season japonica sterile line. Tianlong Company’s infringement of the rights to

use 9201A was an infringement of the rights to use Xu 9201A.

Results of the Adjudication

With respect to Tianlong Company v. Xunong Company, on August 31, 2011,15

the

Intermediate People’s Court of Nanjing Municipality, [Jiangsu Province,] rendered the (2009)

Ning Min San Chu Zi No. 63 Civil Judgment:

1. [The court orders] Xunong Company to immediately cease selling the seeds of the

japonica hybrid rice 9 You 418 and [orders] that [the company] cannot repeat the use of

the seeds of the new plant variety C418 in the production of the seeds of the japonica

hybrid rice 9 You 418 without permission from the right-holder;

2. [The court orders] Xunong Company to pay, within 15 days of the judgment’s coming

into effect,16

Tianlong Company RMB 500,000 as compensation for economic losses;

3. [The court] rejects Tianlong Company’s other litigation requests. The acceptance fee of

the first-instance case, RMB 15,294, is to be borne by Xunong Company.

With respect to Xunong Company v. Tianlong Company, on September 8, 2011, the

Intermediate People’s Court of Nanjing Municipality, [Jiangsu Province,] rendered the (2010)

Ning Zhi Min Chu Zi No. 069 Civil Judgment:17

14

Earlier in this Guiding Case, it is mentioned that the application was made on September 25, 2003. 15

According to the full-text judgment, the court rendered this judgment on September 8, 2011. See 《天津天

隆种业科技有限公司与江苏徐农种业科技有限公司侵犯植物新品种权纠纷民事判决书》 (Tianjin Tianlong

Seeds Science and Technology Co., Ltd. and Jiangsu Xunong Seeds Science and Technology Co., Ltd., The Civil

Judgment of a Dispute over Infringement of Rights to New Plant Varieties) （2009）宁民三初字第 63号民事判决

((2009) Ning Min San Chu Zi No. 63 Civil Judgment), rendered by the Intermediate People’s Court of Nanjing

Municipality, Jiangsu Province, on Sept. 8, 2011, full text available on the Stanford Law School China Guiding

Cases Project’s website, at https://cgc.law.stanford.edu/judgments/jiangsu-2009-ning-min-san-chu-zi-633-civil-

judgment. 16

The original text reads “判决生效” (“the judgment’s coming into effect”). According to Article 155 of the

Civil Procedure Law of the People’s Republic of China, judgments and rulings that have come into effect are

judgments and rulings of the Supreme People’s Court as well as judgments and rulings which, according to law,

may not be appealed or which have not been appealed within the prescribed time limit. See 《中华人民共和国民

事诉讼法》 (Civil Procedure Law of the People’s Republic of China), passed on, issued on, and effective as of

Apr. 9, 1991, amended two times, most recently on Aug. 31, 2012, effective as of Jan. 1, 2013,

http://www.gov.cn/flfg/2012-09/01/content_2214662.htm.

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1. [The court orders] Tianlong Company to cease, immediately on the day the judgment

comes into effect, infringing Xunong Company’s exclusive right to exploit the rights

to the new plant variety Xu 9201A involved in the case;

2. [The court orders] Tianlong Company to pay, within 10 days of the judgment’s

coming into effect, Xunong Company RMB 2,000,000 as compensation for economic

losses;

3. [The court] rejects Xunong Company’s other litigation requests.

Unconvinced by the first-instance judgments, Xunong Company and Tianlong Company

both appealed, [each] in [its respective] above-mentioned case. On December 29, 2013, the

Higher People’s Court of Jiangsu Province combined [the two cases] and rendered the (2011) Su

Zhi Min Zhong Zi No. 0194 and (2012) Su Zhi Min Zhong Zi No. 0055 Civil Judgments:18

1. [The court] revokes the (2009) Ning Min San Chu Zi No. 63 and (2010) Ning Zhi Min

Chu Zi No. 069 Civil Judgments [rendered] by the Intermediate People’s Court of

Nanjing Municipality, Jiangsu Province.

2. [The court orders] Tianjin Tianlong Seeds Science and Technology Co., Ltd. to pay,

within 15 days of the judgment’s coming into effect, Jiangsu Xunong Seeds Science and

Technology Co., Ltd. RMB 500,000 as compensation.

3. [The court] rejects the other litigation requests of Tianjin Tianlong Seeds Science and

Technology Co., Ltd. and Jiangsu Xunong Seeds Science and Technology Co., Ltd.

Reasons for the Adjudication

In the effective judgments, the court opined:19

under normal circumstances, the right to a

new plant variety, as a type of important intellectual property right, should be respected and

protected. Article 6 of the Regulation on the Protection of New Plant Varieties clearly provides:

An entity or individual enjoys an exclusive right to a variety which it or he20

has

bred and for which rights have been granted [to the entity or individual]. No

entity or individual, without permission from the owner of the variety rights, shall

produce or sell for commercial purposes the propagation material of the variety

for which rights have been granted or repeat for commercial purposes the use of

the propagation material of the variety for which rights have been granted in the

production of the propagation material of another variety; […].

17

This first-instance judgment has not been found and may have been excluded from publication. 18

These second-instance judgments have not been found and may have been excluded from publication. 19

The original text does not specify which court opined. Given the context, this should be the Higher

People’s Court of Jiangsu Province. 20

The term “he” as used here is a gender-neutral term that may refer to “she”.

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However, it was necessary to point out that this provision did not apply to the situation in this

case.

First, the cooperative cultivation of 9 You 418, which combines [rice] groups for free,

has its origins in the large-scale cooperation in hybrid rice research that took place in the 1990s21

in China.22

The variety 9 You 418 has excellent traits and has been widely planted in Jiangsu,

Anhui, Henan, and other places. It has been generally welcomed by many farmers and has

become the leading variety of middle-season japonica hybrid rice. The infringement of rights

that was mutually alleged by both parties was also sufficient to show that the variety 9 You 418

has a higher economic value and [better] market prospects [compared with other varieties]. [The

alleged mutual infringement] involves enormous economic interests on the part of the

collaborating parties, Liaoning Rice Institute23

and Xuzhou Agricultural Science Institute, as

well as both parties to this case.

During the second instance [of this case], the court carried out significant mediation work

in the hope that the parties [to the case] could [engage in] mutual licensing to allow the

continued production of the excellent variety 9 You 418. The parties agreed to mutually license

the variety rights involved in the case, but the mediation was not successful, for the sole reason

that the first-instance [court] had ordered Tianlong Company to pay Xunong Company

compensation in the amount of RMB 2,000,000 and [had ordered] Xunong Company to pay

Tianlong Company compensation in the amount of RMB 500,000, and the parties could not

reach a compromise on the [resulting] RMB 1,500,000 difference in compensation. Because

Tianlong Company and Xunong Company could not reach a compromise, production of the

variety 9 You 418 could not continue. This could not be considered to involve only the interests

of the [two] sides [in this case]. In fact, this [outcome] impaired the implementation of the

strategies for national food security and was detrimental to public interests. In addition, this was

not consistent with the fundamental purposes of the cooperative breeding initially [carried out by]

Liaoning Rice Research Institute and Xuzhou Agricultural Science Institute, nor did it conform

to the fundamental requirements for promoting transformations for applications of new plant

varieties.

On the face of it, the acts of the parties [to the case] were [undertaken] to protect their

own intellectual property rights, but the actual results were that the use of intellectual property

rights and the transformations [for applications] of scientific and technological results were

impaired. Given that the two cases involved public interests, such as national food production

security, and affected the promotion of the excellent variety 9 You 418, the parties should have

been subject to some constraints when they exercised their exclusive rights to exploit the

licensing rights of the new plant variety involved in the case: in the production of the rice variety

21

The original text reads “上世纪九十年代” (“the nineties of the last century”) and is translated here as

“1990s”. 22

The original text reads “国内” (“inside the country”) and is translated here as “in China”. 23

The original text reads “辽宁稻作所” (“Liaoning Rice Institute”), which is likely meant to be “辽宁省稻作

研究所” (“Liaoning Rice Research Institute”), as mentioned earlier in this Guiding Case.

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9 You 418, [each party] should have permitted the other [party] to use the propagation material

of its own parent [variety]. This result would have been clearly beneficial to the common

interests of Liaoning Rice Research Institute and Xuzhou Agricultural Science Institute—the two

cooperating parties—and the parties to this case. [This result] would also have been beneficial to

many farmers’ interests. Therefore, it was inappropriate for the first-instance [court] to order the

parties of the two cases to mutually cease infringing [each other’s] rights and to pay each other

compensation for [economic] losses. [The court’s mistakes] should be corrected.

Second, 9 You 418 is a three-line hybrid combination that combines the excellent traits of

the two parents and has notable heterosis. The role of the female parent sterile line is important,

and the selective breeding of male parent C418 also successfully solved significant problems

surrounding three-line japonica hybrid rice. In the 9 You 418 combined groups, the male parent

has the same status and function as the female parent.

The court decided that Xuzhou Agricultural Science Institute and Liaoning Rice Research

Institute, the two parties cooperating for [the development of] the rice variety 9 You 418, as well

as Xunong Company and Tianlong Company, the parties to this case, all had the rights to use the

propagation material of the parent [variety] for which rights have been granted and that [they]

should mutually exempt each other from the [corresponding] licensing fees. However, [the

rights and exemption] only applied to the production and sale of the rice variety 9 You 418; they

could not be used for other commercial purposes.

Xunong Company expended significant commercial efforts and carried out research on

planting technology in promoting the variety 9 You 418, whereas Tianlong Company only

entered into production of the variety 9 You 418 after it had been widely recognized by the

market; [therefore, the latter’s] market costs for promoting the variety significantly decreased.

To manifest fairness and reasonableness, the court also ordered Tianlong Company to pay

Xunong Company RMB 500,000 as economic compensation. Finally, given that each party

produced 9 You 418 on its own, there was, in fact, some market competition and conflict of

interests [between them], and the court warned that the parties should abide by the relevant

provisions of the Anti-Unfair Competition Law24

of China,25

operate their businesses honestly,

compete in an orderly manner, and ensure the quality [of their products]. In particular, they

should clearly display their respective business identifiers in order to prevent new controversies

and disputes from arising and [should] jointly preserve the good reputation of the variety 9 You

418.

(Adjudication personnel of the effective judgment: SONG Jian, GU Tao, and YUAN

Tao)

24

《中华人民共和国反不正当竞争法》(Anti-Unfair Competition Law of the People’s Republic of China),

passed and issued on Sept. 2, 1993, effective as of Dec. 1, 1993, http://www.npc.gov.cn/wxzl/wxzl/2000-

12/05/content_4600.htm. 25

The original text reads “我国” (“my/our country”) and is translated here as “China”.

Tianjin Tianlong Seeds Science and Technology Co., Ltd ...Tianjin Tianlong Seeds Science and Technology Co., Ltd. and Jiangsu Xunong Seeds Science and Technology Co., Ltd., A Dispute

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