A Potpourri of Online Programs

There some great online events involving Chinese IP taking place, including several hosted here at Berkeley.

At the top of my list are the webinar series here. If you missed the first event with Prof. Jerome A. Cohen, Susan Finder, Sean Randolph and myself, here is the link to the video.  Jerry Cohen launches the discussion with an overview of the past and future of Chinese legal engagement with China and his great contributions to the field.  The audience was very supportive of continued legal engagement with China. The next two programs are on US-China trade (May 6) and data-driven research on Chinese legal developments (May 20).

These China law programs are free of charge, carry CLE credit, and attendance can be applied towards receiving a certificate from the Berkeley Center for Law and Technology.  Intellectual property is an important part of the discussions in all of these events. Here are the links to the May 6 Session and May 20 Session.

In addition to these two upcoming programs, we will be hosting a non-CLE credit book warming for Mara Hvistendahl’s recent book The Scientist and the Spy: A True Story of China, the FBI and Industrial Espionage which delves into a Chinese economic espionage case that took place in the cornfields of Iowa.   We expect to have a lively discussion among some of the individuals involved in the case, including the former FBI agent (Mark Bitten) and a  Dupont IP lawyer (Jennifer Johnson).

There are also seven IP-focused webinars after these programs end. All of these IP-focused webinars will also provide CLE credit. The series costs $100.00, or $25.00 per session.  We have a great line-up of speakers including former Federal Circuit Chief Judges Rader and Michel, former PTO Director Kappos, my colleague Rob Merges, and leading practitioners and academics.   Participants who have registered and attend a minimum number of the scheduled programs will receive a certificate from the Berkeley Center for Law and Technology.

If you are tired of staring at a screen on zoom, you might consider listening to podcasts from IP Counsel Café.  I am interviewed by Thomas Chia of Via Licensing on the impact of the trade war and coronavirus including the role of IP in China supply chain disruptions. The podcasts are available here (Episode 4, two parts).

Another notable event: my former USPTO colleagues are joining the shutdown webinar bandwagon with a program on May 7 from 9-10:30 AM EST, with former Shanghai IP Attaché Mike Mangelson and current Beijing and Guangzhou IP Attachés Duncan Willson and Conrad Wong.  Information on this free event is available here.

I hope to hear from you or see you soon!

Is It In There – CNIPA’s “Phase 1” IP Action Plan?

CNIPA released on April 20, 2020, its  2020-2021 Implementation of the “Opinions on Strengthening the Protection of Intellectual Property” Promotion Plan” (2020—2021年贯彻落实《关于强化知识产权保护的意见》推进计划) (the “Promotion Plan”).  Attached are a copy of the Promotion Plan from the CNIPA website and a machine translation, as well as a bilingual translation provided by the USPTO. All translations are provided for readers’ convenience only, are unofficial and do not carry any representations as to accuracy.  Please review them carefully before commiting to any course of action based on the translation, and please bring any errors to our attention.  We greatly appreciate USPTO,  China Law Translate, and the numerous trade associations and law firms that have made translations publicly available over the years.

The Promotion Plan specifically references and appears to be a further implementation of the CPC/State Council  Opinion on Strengthening the Protection of Intellectual Property, released in November 2019 (关于强化知识产权保护的意见) (CPC/State Council Opinion), which I blogged about here. In November I described this CPC/State Council Opinion as going “part way” in addressing US concerns about IP theft that were being raised by the Trump Administration. This Promotion Plan issued by CNIPA is more comprehensive and more directly reflects the Phase 1 Trade Agreement between the US and China that the CPC/State Council Opinion, including setting specific timetables and interagency responsibilities. However, it is being promulgated at a considerably lower level of governmental authority than the CPC/SC Opinion. CNIPA is a division within a ministry-level agency (SAMR) and is arguably weaker and less independent today than when SIPO was a separate agency. In this respect, the Promotion Plan is also weaker than previous action plans promulgated under MofCOM’s leadership. MofCOM and its predecessor agencies were ministries. In a sense, it harkens back to action plans from the 1990s.  The IPR Leading Group was chaired in the 1990s often by a Vice Minister, including Wu Yi, who later became Vice Premier. One may wonder: is this “déjà vu all over again”?.

Some caution also needs to be maintained in approaching this document. First and foremost, are all the Phase 1 commitments, in the words of a once famous  commercial for spaghetti sauce – “in there”? Please write to me with your observatinons.  A second issue involves CNIPA’s authority. Although this document sets out plans for the courts, procuracy, and legislative branches, Chinese state council government agencies do not have the authority to bind these other branches of government.  Nonetheless, these agencies often coordinate their activities together, including through national and local leading groups and coordinating bodies. The puzzle deepens further, however, as the Promotion Plan itself does not indicate the authority by which it has been enacted. Rumor had been that the Promotion Plan was delayed because NPC approval was needed.

To an experienced reader, this Promotion Plan also has the “look” and “feel” of the National IP Strategy Implementation Plan (NIPS Implementation Plan) with its extensive, specific commitments. I  blogged about the NIPS Implementation Plan here.  The NIPS Implementation Plan has a statutory basis in the China Science and Technology Promotion Law (2007). Moreover, the NIPS Implementation Plan similarly has a focus on China becoming a “strong” IP country.

One difference between a NIPS Implementation Plan and an implementation plan from MofCOM in the past is that a NIPS Implementation Plan would have likely needed more local coordinating entities to be implemented nationwide. MofCOM had such authority through its coordination of the former State Council leading groups on IP.  While serving in the Embassy (2004-2008), I visited many of the local IP coordination offices to discuss local IP coordination and enforcement issues. This plan, if it is to be rolled out locally through new mechanisms, will need the support of the CPC and State Council, or local CNIPA offices, or through other local structures.

Several friends have been asking me this morning if this is the Chinese IPR “Action Plan” as required by the Phase 1 Agreement.  The Phase 1 Agreement provided that “Within 30 working days after the date of entry into force of this Agreement, China will promulgate an Action Plan to strengthen intellectual property protection aimed at promoting its high-quality growth. This Action Plan shall include, but not be limited to, measures that China will take to implement its obligations under this Chapter and the date by which each measure will go into effect.”

On the first review,  this Promotion Plan appears to directly reflect the commitments made by China in the Phase 1 Agreement. What the US has called “high-quality growth” might be its misapprehension of China’s recent mantra of building a “strong IP economy.” There are many action items in the Promotion Plan that are focused on strengthening China’s IP resources. Considering the current pandemic, the timing for the release of the Promotion Plan is also about right. Moreover, it makes sense for China to release this document as part of the flurry of announcements surrounding April 26 (World IP Day). CNIPA releasing this document also does not contradict any explicit commitment in the Phase 1 Agreement. The negotiators of the Phase 1 Agreement did not apparently agree to nominate which Chinese agency would issue the Action Plan.

Based on a quick read, this Promotion Plan also appears to share the same weaknesses of the Phase 1 Agreement, with its selective focus, under-emphasis on the courts, lack of clarity around “patent linkage” (including “artificial infringement” determinations by the courts), continuing emphasis on ministry action plans and administrative enforcement, lack of historical context or data to ensure that the Promotion Plan actually delivers results, “old wine in a new bottle” commitments in Customs, criminal thresholdsd and other areas, and lack of any commitment to increasing administrative and judicial transparency.  The lack of strong commitments to increasing judicial and administrative transparency remains the most troubling of all and makes the agreement difficult for governments and rightsholders to adequately apprehend, including making sure that concrete improvements are not only “in there” but being fully implemented.  If the Phase 1 commitments implemented in the 133 action items of the Promotion Plan are the “Action Plan” it is a further indication that any forthcoming changes in China’s IP regime that arose from the trade war are likely to be significant, but not necessarily the kind of  “structural change” that would dramatically mandate more market reform through less government intervention in China’s IP regime.

SAMR Releases Legislative Work Plan for 2020

On 26 March 2020, SAMR released its Legislative Work Plan for 2020 (“2020 Legislative Plan”) 国家市场监督管理总局2020 年立法工作计划. In 2020, 7 draft laws and administrative regulations行政法规, including the Amendment to the Detailed Rules for the Implementation of the Patent Law and the Amendment to the Anti-Monopoly Law, will be proposed for deliberation to the Ministry of Justice. Additionally, 48 administrative rules部门规章 will be formulated or amended.

SAMR’s practice is to designate one or two SAMR bureaus/departments with primary drafting responsibility for these projects. This is likely the second time that a yearly legislative work plan was publicly released since SMAR was organized in 2018. The prior legislative work plan is here.

The Class I Projects of administrative rules shall be submitted for legal review by June 30, 2020,  and completed by the end of the year. The 2020 Legislative Plan does not give a specific deadline for the 7 laws and administrative regulations, as well as the Class II Projects of administrative rules. It simply states that these categories shall be submitted for review on time, ensuring high-quality and efficiency (“部门规章第二类项目以及法律、行政法规,要确保高质高效推进,按期送审”).

IP-related projects, drafting departments, and some brief comments follow below:

Laws and Administrative Regulations:

1.Anti-Monopoly Law 中华人民共和国反垄断法. On January 2, 2020, SAMR issued the Draft Amendments to China’s AML (Draft for Public Comment) “反垄断法”修订草案 公开征求意见稿) (“Draft AML Amendments”). The ABA’s Antitrust Law and International Law Sections submitted comments to SAMR on the Draft AML Amendments. According to the NPC Observer, the Draft AML Amendments are on the State Council’s calendar for the 13th NPC Standing Committee Legislative Plan. It is a priority Class II Project. According to the recent government reorganization, it would otherwise be expected that the Ministry of Justice would prepare a draft of the AML revisions for consideration by the State Council which would then forward on to the NPC for three readings.  As mentioned in a previous blog, Article 55 of current AML (Article 62 of the Draft AML Amendments) stayed unchanged in the most recent draft and there are otherwise very little IP-related amendments contemplated at this time. 

Drafting Department: Anti-Monopoly Bureau

6.Regulations for the Implementation of the Drug Administration Law 中华人民共和国药品管理法实施条例  On August 26, 2019, China’s National People’s Congress adopted the new Drug Administration Law (“DAL”), which took effect on December 1, 2019. The legislative history is set forth in the NPC Observer. As noted in the previous blog, the new law addresses some important issues involving counterfeit and substandard medicines. However, it does little to improve the IP regime for innovative medicines.

In order to coordinate the implementation of the DAL, the revision of other supporting regulations and administrative rules will be further implemented this year.

The Regulations for the Implementation of the DAL had been amended and published on March 2, 2019. It has now been put into the Legislative Plan again. These revisions may be intended to implement changes in the newly revised DAL. On the other hand, it is also hoped that a linkage system would emerge as part of a package of legal reforms as contemplated by the US-China Phase 1 Agreement and to implement an earlier CFDA policy decision.

In addition, this 2020 Legislative Plan includes more than ten Drug/Medical Devices-related administrative rules, including: Measures for the Administration of Drug Registration药品注册管理办法, Measures for the Supervision and Administration of Drug Production药品生产监督管理办法, Measures for the Supervision and Administration of Drug Operations药品经营监督管理办法, Measures for the Supervision and Administration of Drug Online Sales药品网络销售监督管理办法, Measures for the Administration of Registration of Medical Devices医疗器械注册管理办法, Measures for the Supervision and Administration of Medical Devices医疗器械生产监督管理办法, and the Measures for the Supervision and Administration of Medical Devices医疗器械经营监督管理办法

Drafting Department: National Medical Products Administration (NMPA)

7.Rules for the Implementation of the Patent Law 中华人民共和国专利法实施细则. The Rules for the Implementation of the Patent Law, were last amended in 2010. It is likely that these amendments will also be in the form of amendment to the previous Rules,  and perhaps may anticipate some of the changes expected in a revised patent law

On January 4, 2019, the National People’s Congress released a public comment draft of the long-awaited revised patent law. The NPC Observer’s summary of the legislative history to date is here. As we noted previously, a major disappointment remains the absence of a patent linkage regime, including a notion of “artificial infringement.” If the new Patent Law fails to address patent linkage, then the Rules for the Implementation of the Patent Law are also very likely to omit a patent linkage regime.

Drafting Department: China National Intellectual Property Administration (CNIPA)

Administrative Rules:

 Class I Projects

10.Provisions on Prohibiting Infringements upon Trade Secrets禁止侵犯商业秘密若干规定.  SAIC, as a predecessor agency to CNIPA, promulgated the Provisions on Prohibiting Infringements upon Trade Secrets in 1995 and amended it in 1998. These Provisions were formulated in accordance with the relevant provisions of the Unfair Competition Law then in effect.  These early rules were especially important for administrative enforcement of trade secrets and do need to be amended in light of recent revisions to the Anti-Unfair Competition law.  One overdue change is to correct language that specifically enumerated rights in trade secrets to Chinese citizens, legal persons or other organizations, and not to all natural persons such as foreign natural persons, which is a legacy that unnecessarily violates national treatment obligations (Art. 2): “The term ‘rights holder’ in these regulations refers to citizens, legal persons or other organizations that have ownership or use rights over trade secrets according to law. ” 本规定所称权利人,是指依法对商业秘密享有所有权或者使用权的公 民、法人或者其他组织。

In addition, in the Phase 1 IP Agreement, the trade secret provisions generally memorialize amendments already made to China’s Anti-Unfair Competition Law, including an expanded scope in defining “operator” (Art. 1.3), acts that constitute trade secret infringement (Art. 1.4), as well as a shifting of the burden of proof in civil proceedings where there is a reasonable basis to conclude that a trade secret infringement has occurred (Art. 1.5). The Agreement also requires China to change its trade secret thresholds for “initiating criminal enforcement.” (Art. 1.7).  It is hoped that some of these provisions will be incorporated into China’s administrative trade secret enforcement mechanisms.

Drafting Department: Price Supervision and Inspection and Anti-Unfair Competition Bureau

36.Measures for the Administration of Trademark Agency 商标代理管理办法

Drafting Department: CNIPA

37. Provisions on Protecting Geographical Indication Products地理标志产品保护规定. Prior rules in this area had been adopted by one of the precursor agencies to SAMR, the State Administration for Quality Supervision, Inspection and Quarantine in furtherance of China’s sui generis GI system. On April 3, 2020, CNIPA promulgated the Administrative Measures for the Use of Geographical Indications (Trial) 地理标志专用标志使用管理办法(试行). These measures will hopefully also be harmonized with China’s trademark-based GI system, which is also undergoing reform (see item 55, below). 

Drafting Department: CNIPA

38. Official Logo Protection Measures官方标志保护办法. On March 24, CNIPA released Official Logo Protection Measures (Draft for Public Comment). Comments will be due on April 23, 2020.  

 Drafting Department: CNIPA

 Class II Projects

54. Provisions on the Determination and Protection of Well-Known Trademarks驰名商标认定和保护规定.

Drafting Department: CNIPA

55Administrative Measures Concerning the Registration of Collective Marks and Certification Marks集体商标、证明商标注册和管理办法.

Drafting Department: CNIPA

Class I Projects Administrative Rules Nos. 36 and 37 and Class II Projects Nos. 54 and 55 all have prior effective versions that were issued in 2014 or earlier.  It is likely that these projects will be in the form of amendments to the previous Administrative Rules.

Prepared by Dr. Xu Xiaofan and Mark Cohen

Upcoming Series of China Law Programs

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The third in our highly successful series of annual Trade, Tech and China roundtables on the trade wars and their implications for the technology industry, with a focus on China and IP, is going online. The Berkeley Center for Law and Technology is hosting a three-part series on current developments in Chinese law. The first webinar will be held April 22 at 4:30 P.M. PST, 7:30 EST.

Session 1: China Law, Economy and Trade in 2020– Jerome A. Cohen (NYU), Susan Finder (School of Transnational Law of Peking University (Shenzhen)), Sean Randolph (Bay Area Economic Council)  and Mark Cohen (Berkeley Law) and will look at legal and economic developments for 2020 (75 minutes).

Session 2: The Phase 1 Agreement and Its Implementation– Craig Allen (President US-China Business Council), Jeremie Waterman (US Chamber of Commerce), Wendy Cutler (Asia Society), Cui Guobin (Tsinghua U. Law School) and Warren Maruyama (Hogan Lovells) and will look at the implementation of the Phase 1 Trade Agreement (90 minutes).

Session 3: Following the Data: What the Latest Research Says about China’s Legal and IP Environment?– The third session will focus on the use of data in Chinese legal -policy making, and will include Prof. Ben Liebman (Columbia), Graham Webster (Stanford-New America), Melissa Schneider (Darts-IP), and Deng Fei (Charles River Associates) (75 mins).

These three sessions are free, open to the public and will carry CLE credit.

Attendees are also invited to attend a series of webinars on IP-related issues for a nominal fee beginning June 3, which will include such topics as patentability in China, pharmaceutical IP issues, trade secret issues, licensing and antitrust, Chinese IP in an international setting, and design protection.  In addition to CLE credit, individuals who complete a minimum of 8 classes will be eligible for a certificate from BCLT.

Session 1: China Law, Economy and Trade in 2020

Apr 22, 2020 04:30 P.M. Pacific Time (75 mins)
CLICK FOR FREE REGISTRATION
Join us for an in-depth discussion of legal and economic developments in China for 2020.

Speakers:
Jerome A. Cohen, NYU Law School
Susan Finder, School of Transnational Law of Peking University (Shenzhen)
Sean Randolph, Bay Area Economic Council
Mark Cohen, Berkeley Law

Supported in part by a grant from the Robbins Collection.

Essentially Derived Varieties and The Role of Leading Cases in Chinese Plant Variety Protection

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Editor’s Note: Plant Variety Protection (PVP) is a little-discussed topic in China’s IP regime. Indeed, this blog has only reported on PVP-specific issues
once before, and once in the context of the China-Swiss Free Trade Agreement (FTA). This guest blog post explores the relationship among plant variety protection, China’s treaty obligations, and determination of the scope of infringement based on essentially derived varieties (EDVs).   The author, Liz Freeman Rosenzweig, is a J.D. candidate at Berkeley Law. She obtained her Ph.D. in plant biology from Stanford University.

As with other intellectual property (IP) rights, China receives more applications for intellectual property protection of new plant varieties (PVP) than any other country. China grants these rights pursuant to its “Regulations on the Protection of New Varieties of Plants” (“Regulations”) (2014) (中华人民共和国植物新品种保护条例). However, China’s PVP legislative regime lags behind many other countries, largely because of China’s failure to date to accede to the most recent international treaty for protection of plant varieties, the 1991 Act of the International Convention for the Protection of New Varieties of Plants (UPOV ’91). Conversely, Chinese jurisprudence on the topic is significantly more developed than that in, for example, the United States. 

China is now considering amending its Regulations to include the concept of essentially derived varieties (EDVs) (实质性派生品种) and molecular markers (分子检测). Broadly speaking, these proposed amendments are also examples of two broader aspects of Chinese IP legal development: (1) China enacting legislation in anticipation or in excess of current international demands, and (2) Chinese legislation riding momentum generated in advance by judicial decision making. If China adopts the proposed amendments to its Regulations, the level of plant IP protection available in China could become among the strongest in the world. Moreover, the legislative changes would be based on the concrete experience and guidance afforded by previous guiding cases from the Chinese Supreme People’s Court (SPC), which suggest how the new provisions might concretely be applied.

 Plant Variety Protection and UPOV

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires WTO member economies, such as China, to provide IP protection for new plant varieties. Members may do so through a patent system, a sui generis system, or both. The United States takes the combined approach, offering plant IP via utility patents and plant patents under U.S. Code Title 35, and also via Plant Variety Protection (PVP) certificates under the Plant Variety Protection Act (PVPA). China does not provide patents for plants. Instead, plant protection in China is under an entirely sui generis approach.

Internationally, the most commonly adopted sui generis mechanism is the system of plant breeders’ rights (PBRs) promulgated by the International Union for the Protection of New Varieties of Plants (UPOV). The UPOV Convention was first finalized in 1961 and was revised in 1972, 1978, and 1991. As of February, 2020, 76 countries are UPOV members, 59 of which are members of the ’91 Act.

One key change between the ’78 and ’91 Acts is the extension of the scope of the breeder’s right to include EDVs. Per UPOV ’91, a new variety is considered “essentially derived” from an initial variety when it is both “clearly distinguishable from” and “predominantly derived from the initial variety, . . . while retaining the expression of the essential characteristics . . . of the initial variety.” A breeder may obtain a PBR for an EDV “in the same way as for any variety,” but if they wish to commercialize the EDV, they must obtain authorization from the initial variety’s titleholder. This is similar to the manner in which practicing a patent that improves upon a previously valid patent may require permission from the dominant patent’s owner. In contrast, under the ’78 scheme, rights to the initial variety are more limited, and no authorization from the initial variety’s titleholder is required to commercialize a variety that the ’91 Act would consider an EDV.

But defining precisely what constitutes an EDV is notoriously difficult. The ’91 Act provides examples of how an EDV may be created, such as by finding or creating a mutation in an initial variety. However, the list is not exhaustive. Furthermore, the text of the Act seems to contradict itself, leaving significant ambiguity as to the required level of physical resemblance between an EDV and its initial variety. That is, Art. 14(5)(b)(i) of the ’91 Act states that EDVs must “retain[] the expression of the essential characteristics that result from the genotype or combination of genotypes of the initial variety.” But then subsection (b)(iii) excepts “differences which result from the act of derivation” from the required level of conformity. It is not clear precisely how those two instructions are meant to be integrated. For example, a slide deck from UPOV itself presents a hypothetical derived variety that is closely genetically related to its initial variety, but in which “more than one or a few characteristics were affected,” and labels it, ambiguously, “EDV yes/no??” Thus, the ’91 Act does not provide a clear boundary line for when a variety is or is not essentially derived.

Many UPOV member countries prefer the definition of EDV to be broad in order to leave the determination of whether a variety is an EDV up to the rights holders. Conversely, UPOV’s guidance, though nonbinding, is narrower. UPOV is, however, currently revising its guidance on the topic to address these current ambiguities.

One method for defining an EDV is through genetic and biochemical techniques such as molecular markers (“markers”). UPOV does not require the use of markers, but it does provide guidance on their use. That guidance cautions against overreliance on molecular techniques, noting that their usefulness is subject to significant variability, and expressing concern that markers could be abused to make closely-related varieties seem more different than they actually are.

The US ratified UPOV ’91 in 1999. But China has only acceded to ’78. According to Dan Prud’homme and Taolue Zhang, one reason that China has not acceded to the ’91 Act is UPOV’s “lack of clarity in the definition of [EDVs] . . . , which makes it difficult to institutionalize in China.” However, China’s Ministry of Agriculture and Rural Affairs (MoARA) and State Administration of Forestry and Grasslands (SAFG), which govern the granting of plant variety rights in China, recently “expressed an intention to formulate a long-term plan to gradually satisfy key requirements of UPOV ’91,” including “adopting UPOV ’78 plus-style provisions/piloting important aspects of UPOV ’91 (e.g., instituting EDV for certain types of plant varieties) in order to see how the system works in practice.” China’s recently-released draft amendments to its Regulations do just that. Moreover, China’s Supreme People’s Court has also announced on March 19, 2020, its own plans to draft a new Judicial Interpretation regarding plant variety infringement determinations which will likely implement China’s emerging practices in this area.

Comparing Plant Variety Protection Definitions in China and the U.S.

China’s Regulations were promulgated and implemented by the State Council in 1997, two years before China acceded to UPOV ’78. China then revised its Regulations in 2013 and 2014. PBRs under the Regulations are issued in parallel by SAFG (for vines, forest trees, fruit trees, and ornamentals, with rights lasting 20 years) and MoARA (for all other plants, with rights lasting 15 years). China has faced both internal and external pressure to update the Regulations: National entities have pushed for a clearer and more streamlined application process, and many countries—members of the European Union in particular—have been pressuring China to adopt UPOV ’91-style provisions such as by providing for EDVs.

To that end, China began the process of revising its Regulations in 2016—a year before ChemChina, a state-owned entity, purchased Syngenta, a major beneficiary and user of the UPOV system, with hundreds of plant registrations internationally. The proposed draft amendments to the Regulations were released for comment in February 2019. These proposed amendments would essentially move China towards UPOV ’91. This is not an unusual move for China; the country has often enacted legislation in anticipation of meeting—or even in excess of—international requirements. For example, China provided copyright protection for the “right of making available” (right of communication to the public) in the 2002 amendments to China’s Copyright Law, well in advance of China acceding to the WIPO Internet Treaties in 2007. As another example, China also recently amended its Anti-Unfair Competition Law to be the most progressive trade secret law (at least on paper) by reversing the burden of proof, which is in excess of international requirements.

These draft amendments to the plant IP Regulations make several important changes. Crucially among those, the proposed amendments introduce the concepts of EDVs and molecular markers into the Regulations for the first time.

The proposed amendments define EDV as “a variety that is distinct from the original variety, but retains the basic characteristics or characteristics of the original variety, except for the differences caused by the derivation.” This proposed definition of EDV appears to be broader than the UPOV definition. Significantly, it also lacks contradictory language, discussed above, embedded in the UPOV definition and copied nearly verbatim into the U.S. definition.

The US recently also overhauled its PVP system, extending PVP eligibility to asexually propagated plants for the first time. The PVPA has included EDVs since 1994, the definition of which was taken almost verbatim from UPOV ’91—meaning it includes the apparently contradictory language that China’s draft avoids. Also unlike China’s draft amendments, the PVPA makes no mention of molecular markers or other genetic techniques. But the Plant Variety Protection Office, which oversees the PVPA, is moving towards incorporating such methods in the future.

China Leads the World in PBRs by Volume

One reason that China may wish to have an advanced PBR regime could be the growth of its own domestic research capacity in this important area. In 2018, China was “the top destination for plant variety applications,” receiving over a quarter of filings worldwide. Not only did China receive the most applications, but Chinese nationals also filed the most applications worldwide. A record high of >20,000 plant variety applications were filed worldwide that year, driven primarily by China. Applications in China grew by an astounding 29% in 2018, driven almost exclusively by domestic filings (this mirrors the Chinese patent system, which is also primarily used by domestic applicants). In contrast, applications in the US and EU grew by only ~3-4% in 2018, and the worldwide growth rate was ~9%. That being said, this surge is fairly recent, and the US and EU still outrank China in terms of number of active titles. But note that this source includes both PVPs and plant patents in the U.S. tallies. It is unclear why the US numbers do not include utility patents on plants (though it may be due to difficulty in data collection; unlike PVPs and plant patents, not all utility patents are directed to plants), but the US total would be even higher if it did. Considering just PVP rights, in 2018 there were 7,521 active titles in the US.

If China adopts its proposed amendments, then filings in China may also increase due to increased foreign applications, as well as stimulating foreign investment in China in this sector. Thus, activity in the Chinese plant variety protection offices will likely continue to dwarf that in the US. 

More Thorough Plant Variety Protection Guidance from Chinese Litigation than U.S. Litigation

There is significantly more PBR litigation in China than in the US. As of November, 2019, there have been at least 338 Chinese cases referencing the Regulations (华人民共和国植物新品种保护条例). At least 18 of these cases discuss molecular markers (分子检测). Although China is a civil law system where cases do not create binding precedent, for the past decade the Chinese Supreme People’s Court (SPC) has issued “guiding cases” that are “intended to be de facto binding decisions” to guide lower courts’ decisions in similar cases. The SPC has issued several guiding cases on PBRs. Stanford University Law School has also initiated a “China Guiding Cases Project” which provides a platform for research on these judicial developments.

Two guiding cases have discussed molecular markers specifically. These cases, discussed below, reveal that the SPC embraces the use of molecular markers—but is wary of overreliance thereon, and is careful to balance genetic results with observations from field trials.

In Guiding Case No. 2633, the SPC denied retrial after a lower court found non-infringement when there were no genetic differences between the varieties at issue, but there were phenotypic differences during field trials. In reaching this decision, the SPC noted that the genetic testing only assessed 40 locations in the genome, which does “not necessarily correspond to the traits” observed in phenotypic field tests.

Guiding Case No. 92 was essentially the reverse situation: the SPC found infringement when markers revealed a single genetic difference but field tests showed no phenotypic differences. In doing so, the SPC formulated a technical balancing test for reconciling field and genetic tests that tempers over-reliance on molecular markers.

By late 2019 there were no reported Chinese cases that specifically referenced EDVs. But the molecular marker cases likely hint at how courts will address them. Intriguingly, the facts of Guiding Case No. 92 seem remarkably similar to an EDV situation, in that the accused variety retained the characteristics of the first variety while displaying minor genetic differences. If Chinese PBR agencies or the Courts formally adopt EDVs, they may determine essential derivation with a test much like the one set out in Guiding Case No. 92, as the Chinese concept of EDV would likely cover most types of genetic changes.

Neither of those two guiding cases have been cited by name, however, in published subsequent cases according to a March 23, 2020 search on Caipanwenshu 裁判文书 (the official SPC database). This is not unusual, as most guiding cases are not widely cited by lower courts, who, along with practicing lawyers, still remain unfamiliar with citing and distinguishing cases in rendering decisions. Rather than being “precedential,” guiding cases such as these may also be issued primarily to illustrate examples of good reasoning for judges, or to provide political coverage for consistent decision making.

Ironically, although China is a civil law country, its case law fills the statutory gaps for plant variety protection far more comprehensively that in the U.S. In contrast to the robust Chinese case law, there have been only 19 reported (and 28 unreported) U.S. cases referencing 7 USCS § 2541 (PVP infringement) as of March, 2020. These include 4 Supreme Court cases and 5 at the Federal Circuit. The Supreme Court cases either reference the PVPA only in passing or are outdated.

A handful of U.S. cases reference genetic testing, but do not address the concept in much detail (See Ark. Seed Co., Inc. v. Williams, No. 10-1231, 2011 U.S. Dist. LEXIS 100224, at *3 (C.D. Ill. Sep. 6, 2011)). Despite the presence of EDVs in the PVPA, there has not been reported EDV litigation in the U.S. as of March, 2020. The closest case was the denial of a motion to stay litigation pending the PVPO’s assessment of an application for an allegedly infringing variety of lettuce, but the court did not decide whether the variety was an EDV, and the case has no subsequent appellate history. (See Genecorp, Inc. v. Progeny Advanced Genetics, Inc., No. C 97-20706 RMW, 1998 U.S. Dist. LEXIS 21910, at *7 (N.D. Cal. Apr. 9, 1998)).

Conclusion

If China adopts its current proposed amendments, it would offer protection to plant breeders in line with “or even above” UPOV ’91. Given that Chinese PBRs represent the lion’s share of all such rights worldwide, this would be a significant change. It seems likely that legislators will approve a version of these Regulations in the next few years, though it is unclear when. Notably, the “Opinions on Strengthening the Protection of Intellectual Property Rights” recently released by the Chinese Communist Party and State Council (November 27, 2019), also explicitly calls for encouraging Chinese innovation by improving the protection, examination, and international sharing of examination results for new plant varieties. If China does adopt the proposed amendments, China would likely become a de facto member of at least part of UPOV ’91, as Chinese officials reportedly “want legislation in line with the 1991 UPOV convention but do not want to actually accede to the 1991 UPOV convention.” This pattern of gradual and partial adherence to international treaties has also manifested itself elsewhere in China’s legal regime, including in the gradual piloting of civil or economic legal reforms before wider introduction into the Chinese legal system or economy.

The nuanced treatment of molecular markers in the proposed amendments and in Chinese guiding cases is ahead of that in the US, and the US may very well follow China’s lead in adopting a more systematic use of molecular markers in the application process. The proposed amendments’ concept of EDV strengthens the incentive for innovation by expanding the scope of the breeder’s right.

Moreover, the definition of EDV put forth in the proposed amendments is arguably broader and clearer than that under UPOV ‘91 and in the US, which may give holders of Chinese rights a competitive advantage and increase the incentive to protect new plant varieties in China. But the extent of foreign investment these amendments would engender is unclear, given that China requires that Chinese parties be controlling shareholders for “selection and cultivation of new varieties of crops.” 

ACKNOWLEDGEMENTS: Many thanks to Mark Cohen, Elaine Wu, David Kappos, Edgar Krieger, Cynthia Mathiesen, Alanna Rennie, Xiaofan Xu, and Alexandra Draggeim for valuable discussion, comments, feedback, editorial help, and research and translation assistance.  Photos (c) by Mark Cohen of Huntington Gardens and US Plant Patent.

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