[ Karin Grau-Kuntz ]
Background to the dispute
On 29 August 1995, the predecessor in title of the Western Australian Agriculture Authority (WAAA), the Department of Agriculture and Food Western Australia (‘the Department’) filed an application for a Community plant variety right at the Community Plant Variety Office (CPVO) for an apple variety belonging to the species Malus Domestica Borkh, denominated ‘Cripps Pink’. The application form for a Community plant variety right stated that Cripps Pink apple trees were first marketed within the European Union in 1994 in France and first marketed outside the European Union in 1988 in Australia.
On 12 March 1996, the CPVO informed the representative of the Department that the Cripps Pink variety did not fulfil the novelty requirement under Article 10 of the Council Regulation (EC) No 2100/94 (Basic Regulation) (here). In July 1996, the Department explained that the date indicate as first market outside the EU should have been considered to be the date of the “first plantings in Australia for experimental purposes”. Furthermore, it stated that the relevant date for the purposes of Article 10 of the Basic Regulation was July 1992, being the date when Cripps Pink apple trees were marketed in the United Kingdom under the trade name ‘Pink Lady’.
Based on this information the CPVO granted on 15 January 1997 Community plant variety right to the Cripps Pink variety.
On 26 June 2014, Pink Lady America LLC (‘the applicant’) lodged an application for nullity in relation to the Cripps Pink Community plant variety right under Article 20 of the Basic Regulation, arguing that the Community plant variety right at issue did not fulfil the novelty conditions. On 19 September 2016, the CPVO dismissed the applicant’s nullity application.
On 18 November 2016, the applicant lodged an appeal with the Board of Appeal of the CPVO, claiming that the CPVO had erred in its assessment of the facts and the evidence and requesting the Board of Appeal to declare the Community plant variety right at issue null and void for lack of novelty pursuant to Article 10(1) of the BR or, alternatively, pursuant to Article 10(1)(b) of the BR, read in conjunction with Article 116 of that Regulation.
Article 10 (1) of the BR stipulates:
1. A variety shall be deemed to be new if, at the date of application determined pursuant to Article 51, variety constituents or harvested material of the variety have not been sold or otherwise disposed of to others, by or with the consent of the breeder within the meaning of Article 11, for purposes of exploitation of the variety:
(a) earlier than one year before the abovementioned date, within the territory of the Community;
(b) earlier than four years or, in the case of trees or of vines, earlier than six years before the said date, outside the territory of the Community.
Furthermore, according to Article 116 (1) of the BR:
Art. 116. Notwithstanding Article 10 (1) (a) and without prejudice to the provisions of Article 10 (2) and (3), a variety shall be deemed to be new also in cases where variety constituents or harvested material thereof have not been sold or otherwise disposed of to others, by or with the consent of the breeder, within the territory of the Community for purposes of exploitation of the variety, earlier than four years, in the case of trees or of vines earlier than six years, before the entry into force of this Regulation, if the date of application is within one year of that date.
By decision A 007/2016 of 14 September 2017 (‘the contested decision’), the Board of Appeal, considering
i) that the provision regarding the determination of the grace period for sales or disposals outside the territory of the European Union should be applied;
ii) that various items of evidence established that commercial evaluation trials had been carried out which could not, however, be regarded under Article 10(1) of the Basic Regulation as constituting an exploitation of the variety at issue within the meaning of that provision; and
iii) that there were invoices demonstrating that the Cripps Pink variety had been sold in 1985, but that there was no evidence that the breeder had consented to these sales, the evidence in fact establishing that the variety at issue had been released for testing purposes only,
dismissed the appeal as unfounded. The Board of Appeal stated, inter alia, that the applicant had not provided evidence of sales or disposals of the Cripps Pink variety to third parties outside the European Union, by the breeder or with his consent, for purposes of exploitation of the variety prior to 29 August 1989.
In a further attempt to assert its understanding, the applicant requested the General Court to annul the contested decision and the Community plant variety right granted to the Cripps Pink variety, for lack of novelty, pursuant to Articles 10 and 20 of the BR.
The Court declared the request to annul the Community plant variety right granted to the Cripps Pink variety to be inadmissible, stating that the purpose of actions before the Court is to review the legality of decisions of the Boards of Appeal of the CVPO (Article 73 of the BR), and that the Court does not have jurisdiction to review the legality of decisions taken by the lower-ranking bodies of the CPVO nor, therefore, to annul or vary them.
With regard to the claim to annul the contested decision, the applicant submitted
i) that the Board of Appeal was wrong to apply the six-year derogative grace period laid down in Article 116 of the BR to commercial activities within the European Union as it did not first take into account the provisions of Article 10(2) of the BR;
ii) that the Board of Appeal was wrong to interpreted Article 10 of the BR in accordance with Article 6 of the UPOV Convention as revised on 19 March 1991;
iii) it contests the Board of Appeal’s assessment of the novelty condition set out in Article 10(1) of the BR.
Application of the grace period
According to Article 6 of the BR, protection of a new breeding result requires that the same is distinct, uniform, stable and new. The criteria having to be fulfilled in order to characterize the candidate variety as new are defined in Article 10 BR.
The period of time during which the breeder of a new variety may make sales or disposals without compromising the variety‘s novelty is called “grace period”. The duration of this grace period varies according to whether the disposals take place within or outside the EU (see Art. 10 (1) a) and b)).
On the other hand, as a transitional provision aiming to regulate the requirement of novelty for varieties sales or disposals of which were made within the territory of the EU before the entry into force of the BR, Article 116 extends the grace period laid down in Article 10(1)(a), from one year before the application for protection to four years (or 6 years in cases of trees) before 1 September 1994, i.e. the date of publication of the BR in the Official Journal.
The Court decided that the Board of Appeal was correct in its position that in the present case two grace periods were applicable: first, a period of 6 years before the entry into force of the Basic Regulation for sales and disposals within the territory of the European Union, as Article 116(1) BR derogates Article 10 (1)(a) and, secondly, according to Article 10 (1)(b), which is not derogate by Article 116(1) BR, a period of 6 years before the filing of the application for sales or disposals outside of that territory.
The Court stated further that this conclusion is not affected by the applicant’s argument that the Board of Appeal should have applied a grace period only after first examining whether the breeder had preserved his exclusive right of disposal within the meaning of Article 10(2) of the BR.
As Article 10(2) BR specifies the circumstances under which certain legal situations are covered by the concept of disposal for purposes of exploitation of the variety within the meaning of Article 10(1) BR, in order to invoke that provision, the applicant would have had to present arguments justifying the application of that provision. As none of the situations mentioned in Article 10(2) of the Basic Regulation have arisen, the Court decided that the Board of Appeal was correct not to apply the same.
Interpretation of Article 10 BR in light of Article 6 of the 1991 Act of the UPOV Convention
Regarding the interpretation of Article 10 of the Basic Regulation in the light of the UPOV Convention, the applicant submitted that, since the sales of Cripps Pink apple trees were made before the entry into force of the Basic Regulation and of the 1991 Act of the UPOV Convention, the Board of Appeal should have referred to the 1978 Act of the UPOV Convention.
The Court recalled the twenty ninth recital of the BR, which states that ‘this Regulation takes into account existing international conventions such as the International Convention for the Protection of New Varieties of Plants (UPOV Convention)’, which, in the present case, is the 1991 Act of the UPOV, and stated “that even if the Board of Appeal had referred to it, it was therefore fully entitled to do so”.
Furthermore, as it was clear that the Board of Appeal based its assessment of the novelty requirement of the Cripps Pink variety solely on Article 10 of the BR, it decided that the applicant’s argument was based on an incorrect reading of the contested decision and therefore had to be rejected.
The novelty condition in light of Article 10(1) of the BR
As Community plant variety rights are to be granted for varieties that are distinct, uniform, stable and new (see Art. 6 and 10(1) BR, here), the CPVO is to declare a Community plant variety right null and void which does not fulfill these conditions. On the other hand, requests to the CPVO to open the proceedings on nullity or cancellation are to be accompanied by evidence and facts raising serious doubts as to the validity of the title (Article 53a(2) of Regulation No 874/2009, here). Furthermore, under Article 76 of the BR (here), in proceedings before it, the CPVO is to make investigations on the facts of its own motion, to the extent that they come under the examination pursuant to Articles 54 and 55 of that Regulation.
That having been said, the CPVO has a wide discretion to declare a plant variety right null and void under Article 20 of the BR, which it is supposed to exerciss on the basis of the evidence submitted to it by the applicant for a declaration of nullity. Nevertheless, the exercise of that discretion is not immune to review by the Court (Article 73 BR, here).
Bearing this in mind, it was for the applicant to put forward evidence or facts of sufficient substance to raise serious doubts on the part of the CPVO regarding the legality of the plant variety right granted in the present case.
Regarding the evidence provided in order to substantiate the claim of lack of novelty, the applicant submitted, inter alia:
i) proof that the variety was part of breeding programs to release the variety to the industry ‘for extensive trial and evaluation under commercial conditions’ in 1984 and 1985 ;
ii) letters sent by the breeder of the variety, a researcher of the Department, dated of 1985 informing nurseries that certain grafted trees of variety would be available in winter and that they might be interested in receiving them in order to “have a source of budwood and [to] be able to produce trees for sale to fruit growers”, “should the Department recommend their planting in commercial orchards” were also presented as evidence;.
iii) invoices concerning sales allegedly made by Nurseries in 1987.
First at all, the Court underlined, that the mentioned letters, taken in isolation, did not make it possible to conclude, that the variety at issue had been released solely for testing purposes. However, the evidence provide as a whole confirms that the disposals made in 1985 had been made ‘for trial and evaluation purposes’.
As Article 10(1) of the BR specifically refers to ‘exploitation of the variety’ and considering that according to the case-law disposals for the purposes of testing of the variety, viz. commercial trials aimed at assessing varieties under commercial conditions across a range of soil types and different farming systems to determine their value to customers, does not negate novelty for the purposes of the mentioned provision (see Case T‑765/17 (Pinova), here), the Court states that it is irrelevant the fact that the evidence provided refers to commercial testing and not botanical testing.
Regarding the invoices provided by the applicant concerning sales allegedly made by Nurseries in 1987, the Court confirmed the understanding of the Board of Appeal, that even if the invoices provided by the applicant during the administrative proceedings prove that the Nurseries sold the Cripps Pink variety, they do not constitute proof that the breeder had consented to the ‘commercial exploitation’ of that variety.
In those circumstances, the Court concluded that the Board of Appeal correctly inferred that commercial evaluation did not amount to commercial exploitation and that, accordingly, sales or disposals made for testing purposes before the grace period were circumstances that did not negate novelty.
In conclusion, the action was dismissed in its entirety and the Applicant was ordered to pay the costs.
Published on 8 Apr 2020