Exemplary damages awarded for breach of plant variety rights

In the recent decision in Cropmark Seeds Ltd v Winchester International (NZ) Ltd & ors, the High Court considered the extent to which plant variety rights are actionable and awarded exemplary damages for breach of plant variety rights.

It is possible to apply to the Commissioner of Plant Varieties under the Plant Varieties Act for a grant of plant variety rights for any new, distinct, stable and homogenous plant variety.

Under s.17 of the Act, the holder of a grant has an exclusive right to produce for sale and to sell any reproductive material of the variety concerned, and infringement of that right is actionable. Damages can be awarded for any loss suffered as a result of an infringement.

In this case, the plaintiff owned plant variety rights in a barley called "Optic", which was particularly attractive to brewers of beer as the premium variety of barley in New Zealand for malt production.

The first defendant arranged for a shipment of "Optic" barley to China - which was of a size that suggested that it could not all be grown from certified seed sold by or under licence from the plaintiff. The plaintiff made inquiries and hired a private investigator to ascertain the source of the balance of the seeds. Evidence was collected to the effect that the second defendant (a director of the first defendant) had arranged sales of non-certified seed to be grown for the shipment.

The plaintiff sued, alleging that the defendants had arranged for the sale of "Optic" seed in contravention of its plant variety rights. The Court held that the proprietary rights granted to the plaintiff under the Act could be infringed by someone who procured breaches, and that they had been infringed in this case by the first and second defendants organising sales of uncertified seed.

As there was no evidence that the defendants directly profited from the breaches, the Court did not require an account of profits or an inquiry into damages.

Instead, the Court awarded exemplary damages of $5,000, on the ground that the actions of the second defendant amounted to contumelious behaviour showing a flagrant disregard for the plaintiff's rights.

The decision is welcome news for owners of plant variety rights, both in holding that the rights are infringed by a person who procures a breach, and by awarding exemplary damages in such circumstances.

Enquiries and information

For more information on the infringement of plant variety rights, please email or call Alan Ringwood on 64 9 916 8925.