PVR infringement court cases in Germany in the ornamental sector

1. PVR infringement court cases in Germany in the ornamental sector Thomas Leidereiter LL.M. (Cardiff) Luther Rechtsanwaltsgesellschaft mbH Rothenbaumchaussee 78 DE-20148 Hamburg

2. Agenda • Introduction • Case 1 – Basic Case • Case 1 – Alternative 1 • Case 1 – Alternative 2 • Case 2 (replaced) • Case 3 • Conclusions

3. Introduction „Where have all the flowers gone? Gdzie są kwiaty z tamtych lat? Long time passing Jasne kwiaty... Where have all the flowers gone? Gdzie są kwiaty z tamtych lat? Long time ago Czas zatarł ślad Where have all the flowes gone? Gdzie są kwiaty z tamtych lat? Girls picked them one by one Każda z dziewcząt wzięła kwiat... When will they ever learn? Kto wie czy było tak... ? When will they ever learn?“ Kto wie czy było tak... ?

4. Case 1 – Basic Case • Factual Background • Five breeders hold a total 27 PVR (all varieties protected) of one species • Propagation and sale licensed to two Companies • 45.000 cuttings were delivered to one nursery • During a control 100.000 plants were discovered • Negotiations with nursery failed • Preliminary injunction granted – Agreement signed afterwards

5. Case 1 – Basic Case • Legal Background • Rights of the Breeder – Art. 13, 94 Council Regulation (CR) • Exhaustion – Art. 16 CR • Questions of Proof • How many plants of each variety? • Prima facie evidence accepted by court • Proof of exhaustion • Affidavit by inspector accepted by court

6. Case 1 – Basic Case • Damages • Basic Rules: Art. 94 CR • “License analogy”, actual loss, infringers profit • „Double Royalty“ under German jurisdiction not accepted • Agreement on Damages • Practical Consequences • Importance of PVR protection • Proper marking the protected products • Preparation of Actions to be taken

7. Case 1 – Alternative 1 • Factual Background • Cf. Basic case, but: Three of the varieties were not yet protected but PVR was only applied for • Legal Background • Art. 95 CR: „Reasonable Compensation“ for acts pursuant to Art. 13 performed in the period between application for and granting of PVR • When is a compensation due? • What is “reasonable“ compensation? • Is there any deduction to be made? • Is the common practice to collect royalties justifiable?

8. Case 1 – Alternative 1 • Practical Consequences • Supposedly no changes to the basic case if “only“ 3 out of 27 varieties not yet protected • Royalty collection should be accepted for varieties applied for protection • However, when composing the portfolio, the legal background needs to be considered

9. Case 1 – Alternative 2 • Factual Background • Altogether 42 different varieties have been delivered • 15 varieties were not protected by PVR • Some 150.000 plants have been discovered • Legal Background • Simply: No Title – No Protection • How to prove prima facie evidence of an infringement • Practical Consequences • No preliminary injunction might be granted • Lengthy and costly proceedings might be necessary – Consider thoroughly !

10. Case 2 (replaced) • Factual Background • German Breeder (Plaintiff) holds national PVR in Variety “Melanie” in DE and a CPVR in the variety “Amethyst” (Calluna vulgaris) • The Defendant, responsible for the purchases in a nation-wide chain of garden centers bought plants (not cuttings) of Calluna from Company A in NL • The garden centers sold the plants to consumers • Company A had bought the plants from Company B in France • The Plaintiff claims an infringement of his PVR and CPVR because of the sale of the allegedly infringing plants

11. Case 2 (replaced) • Legal Background • Method of raising evidence: • The Court held that an expert in case of infringement proceedings does not have to follow the DUS-test guidelines; it suffices to prove one infringing plant • Obiter Dictum: It might be possible to use DNA analysis or further cuttings • It is up to the first instance judge to decide on the method of raising evidence • Defendant‘s default Any company (e.g. supermarkets) dealing with potentially IP-protected material has to ensure that at one point in the chain of sales a thorough examination of the IP-rights has taken place; In particular if the products have been purchased abroad • Defendant‘s duty to render information Also in cases of an infringement of a CPVR sec. 242 German Civil Code applies and, therefore, a “balance sheet” of all purchases and sales needs to be produced by the infringer (argument: Art. 97 para. 3 CR)

12. Case 2 (replaced) • Legal Background • German Supreme Court confirmed 2nd instance decision ruling that there was a PVR and CPVR infringement • “Melanie“: Although the plants were not considered to be propagation material in the meaning of sec. 10 para. 1 SortG, the court established an infringement. As the propagation had taken place in France, the Plaintiff was unable to exercise his (national) PVR in relation to these plants at an earlier stage • “Amethyst“: The court held that the CR only makes an exception in Art. 13 para. 3 CR with regard to „Harvested Material“. Only in relation to such material it is relevant whether the breeder could have enforced his right at an earlier stage • (Whole) Plants grown from propagating material cannot be considered to be “Harvested Material”, as there was no act of harvesting

13. Case 2 (replaced) • Practical Consequences • National PVR rights cannot be enforced at an earlier stage abroad • Plants grown from propagating material are not „Harvested Material“ • It only needs to be established that one single infringing plants was sold • The DUS-rules (UPOV) do not have to be applied in case of an infringement to be proven • DNA-analysis or further cuttings might be used as means of evidence • High duties of care for all involved in the chain of purchases • Extended reaching claim for information

14. Case 3 • Factual Background • Company A holds three CPVR titles • Company A believes Company B to sell plants that fall within the scope of protection of its varieties and seizes plants on a fair • Motion of Company A is based on variety description of its own varieties • Company A claims that plants are either not distinguishable or EDV • Expert examination is ordered by Court (2nd instance) • A fails to deliver plants of one of his own varieties • All seized plants were deteriorated

15. Case 3 • Legal Background • What kind of infringement is claimed? • „Direct“ infringement, i.e. plants are not distinguishable • Infringement through sale of EDV • Amendment of Motion during the course of the proceedings • Burden of proof • Risk of failing to provide the protected plants for examination • Risk of evidence being lost is upon the breeder • No DNA-Analysis with regard to phenotype • Alternative argumentation possible?

16. Case 3 • Practical Consequences • „When will they ever learn?“ • Preparation and preservation of evidence • Pre-trial discovery? • „Take good care of your rights!“ means to prepare their defense

17. Conclusions • Obtaining PVR • Selection of Portfolio • Performing Controls • Securing and preserving of evidence • Using all available sources of information • Negotiating an amicable solution • Seek for preliminary injunction • Bearing in mind the implications of a law suit

18. Thank you for your kind attention ! Thomas Leidereiter, LL.M. (Cardiff) Rothenbaumchaussee 78 20148 Hamburg Tel.: + 49 40 36132 12961 Fax: + 49 40 36132 510 E-Mail: thomas.leidereiter@luther-lawfirm.com www.luther-lawfirm.com