Seeds are the “chips” of agriculture — the foundation of modern agricultural development and national food security. The revitalization of the seed industry requires various kinds of support, among which the rule of law is of paramount importance. On Dec. 24, 2021, the 32nd Session of the Standing Committee of the Thirteenth National People’s Congress passed a decision to revise The Seed Law of the People’s Republic of China, becoming effective on March 1, 2022. This revision mainly aims to strengthen protection of intellectual property rights (IPR) in the seed industry as evidenced by the following: expanding the scope of protection and protective mechanisms for new plant variety rights; establishing the Essential Derivation Variety (EDV) system; improving the rights infringement compensation system; and promoting the establishment of systems that encourage and support propagation innovation.
1. Establishing the EDV system to encourage propagation innovation
To encourage propagation innovation, the new Seed Law provides for the establishment of the EDV system. This system will coordinate the interests of different stakeholders and strengthen original breeders’ rights, thus solving the problem of seed homogenization at the source. An essentially derived variety (EDV) is a variety predominantly derived from an initial varieties (IV), or from an EDV of that IV, and is clearly distinguishable from the IV. Except for traits that result from the act of derivation, the EDV conforms to the IV in the expression of fundamental characteristics produced from its genotype or through genetic combination. When an EDV competes with an IV in the market, there are substantial imbalances in terms of benefits, costs and risks, which is obviously unfair to breeders of IVs. Item 4 of Article 28 of the new Seed Law clearly stipulates that the owner of an EDV needs authorization from breeders of IVs to undertake commercial activities. To identify an EDV, modern technology and quantitative methods are required to determine the similarity in genetic characteristics between an EDV and IV. Item 5 of Article 28 of the new Seed Law states that the State Council shall decide on the steps and methods for implementing the EDV system.
2. Expanding the scope of protection for new plant variety rights and enhancing protection mechanisms
The new Seed Law strengthens the system for protecting the rights to new plant varieties by expanding the scope of protection and enhancing protection mechanisms. First, the new Seed Law extends the scope of protecting the rights to the new variety from the authorized variety’s propagation materials to materials harvested from the unauthorized use of the authorized variety’s propagation materials. Second, protected activities have been expanded from “production, propagation, and sales” to “production, propagation, processes supporting propagation, sales offers, marketing, import, export, or storage in support of the above,” etc. In this way, protection of the rights to new varieties can be implemented at every link of the supply chain. In order to balance the interests and rights of variety owners and those involved in the business of harvesting materials, as well as others, the law stipulates that if the owner of new variety rights has already had a reasonable opportunity to exercise rights over the propagation materials, he/she may no longer exercise rights over the harvested materials.
3. Improving the infringement compensation system
The new Seed Law has increased efforts to crack down on infringement of the rights to new plant variety. The amount of punitive damages for intentional infringement of the rights to new plant variety has been increased. According to Article 72 of the new Seed Law, if the losses of the rights holder, the profit of the infringer, or the fee for licensing the new plant variety can be determined, the upper limit of the compensation amount will be increased from three times to five times. If it is difficult to determine the actual amount, the compensation limit will be increased from three million yuan to five million yuan.
In addition, this revision further strengthens scientific and technological research in the seed industry, strengthens the protection of germplasm resources, promotes efforts to streamline administration and delegate power, and increases punishment for the production and sale of fake and inferior seeds.
Article 1 of the new Seed Law explicitly lists as one of its legislative purposes, “strengthening scientific and technological research in the seed industry and encouraging innovation in seed propagation.” Furthermore, Article 12 adds a stipulation that the State shall support biological propagation technology research; and Article 63 stipulates: “The State will strengthen the construction of publicly beneficial infrastructure in the seed industry and ensure that reasonable demands for land for propagation and scientific research facilities are met.
According to Article 9 of the new Seed Law, “The collection of rare, endangered, unique resources and distinctive local varieties shall be prioritized.” According to Item 1 of Article 11, when it comes to providing germplasm resources to foreign countries, or research cooperation with any foreign institution or individual involving the utilization of germplasm resources, these matters shall be reported to agriculture and rural affairs authorities and forestry and grassland authorities under the State Council for approval. Moreover, the Ministry of Agriculture and Rural Affairs and the National Forestry and Grassland Administration shall notify the Ministry of Ecology and Environment.
The new law also underlines the importance of streamlining administration and delegating power. For example, according to Article 52 of the new Seed Law, when it is necessary, due to force majeure, to use timber seeds that are lower than national or local standards, no extra approval is needed. Article 57 stipulates relaxation of supervision over the import and export of non-crop seeds. Only those engaged in the import and export of crop seeds must obtain a seed import and export license, while those engaged in the import and export of non-crop seeds do not need such licenses. Meanwhile, the approval procedure for importing timber seeds has been cancelled.
In addition, the new Seed Law also regulates seed production and sales by strengthening inspection and quarantine during seed production, especially for fruit tree seedling production, so as to prevent diseased fruit tree seedlings from entering the market.
Apart from that, the new Seed Law increases penalties for the production and sale of fake and substandard seeds. Production and sale of fake seeds worth less than RMB 20,000 are punishable by a fine of RMB 20,000 to RMB 200,000, up from RMB 10,000 to RMB 100,000 in the past. Production and sale of substandard seeds worth less than the base value are punishable by a fine of RMB 10,000 to 100,000, up from RMB 5,000 to RMB 50,000 in the past.
The revision of the Seed Law is a milestone in the development of the legal system for China’s seed industry. The revised Seed Law reflects a new development philosophy, especially China’s determination to strengthen protection of seed industry IPR, a major move in the revitalization of the seed industry. The new Seed Law will play an important role in revitalizing the seed industry and consolidating the system underlining China’s seed industry.
Author: Yang Dongxia, Director of the Research Center of Agricultural Law of the Agricultural Management Institute of MARA as well as Vice Chairman and Secretary General of the China Association of Agricultural and Rural Law. E-mail: yangdongxia@nygbpx.org
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