Cracking Down on Seed Label Switching and Infringement: The Crime of Infringing New Plant Variety Rights Should Be Criminalized

●Add a provision to Chapter III, Section 7 of the Criminal Law: "Without the permission of the variety rights holder, producing or selling a protected variety, where the circumstances are serious, shall be punishable by fixed-term imprisonment of not more than three years, criminal detention or control, and concurrently or alternatively by a fine; where the circumstances are especially serious, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall also be fined."

●The Supreme People's Court shall issue a judicial interpretation on illegal seed business operations, bringing under the category of the crime of illegal business operation such illegal acts as producing (operating) seeds without a license or without complying with the requirements of the production (operation) license, or producing or operating seeds of protected varieties without authorization, thereby causing serious harm to society, or seriously disrupting market order.

Variety innovation is the core of seed industry development, and protecting the rights and interests of variety rights holders is the fundamental guarantee for driving variety innovation. "At present, the protection of variety rights is based only on the Seed Law and the Regulations on the Protection of New Plant Varieties, and infringement acts are subject only to administrative penalties. Because the penalties are relatively light, seed label switching and infringement have become increasingly rampant in recent years, seriously disrupting the order of the seed market and dampening the enthusiasm of variety rights holders for innovation." At the third session of the current National People's Congress, Li Denghai, a deputy to the National People's Congress and honorary chairman of Shandong Denghai Seeds Co., Ltd., submitted a "Motion on Adding the 'Crime of Infringing New Plant Varieties' to the Criminal Law," proposing that the National People's Congress amend the Criminal Law to include infringement of variety rights under the crime of infringing intellectual property rights.

"Narrowing the gap between China's seed industry and foreign seed industries depends on stimulating the innovative vitality of the seed industry and improving the capacity for variety innovation," said Li Denghai. It often takes 5 to 10 years for a breeder or seed company to develop a good variety or obtain an excellent inbred line, with investment of millions, tens of millions, or even hundreds of millions of yuan, while those engaged in label switching and infringement can reap huge profits with no investment and sit back enjoying the benefits. The Denghai series corn varieties of Shandong Denghai Seeds Co., Ltd. are infringed upon each year in amounts reaching more than 5 million kg of seed, with losses amounting to more than 100 million yuan. "If this problem is not solved for a long time, it will seriously affect the improvement of the competitiveness of China's seed industry and national food security."

In recent years, agricultural departments have continuously strengthened market supervision, so that illegal acts such as label switching and infringement have been curbed to a certain extent. At present, however, cracking down on illegal acts such as label switching and infringement can only rely on the Seed Law and the Regulations. Because administrative penalties are relatively weak, it is difficult to deter lawbreakers. "In Chapter III, Section 7 of the Criminal Law on crimes of infringing intellectual property rights, corresponding charges are stipulated for illegal acts infringing trademark rights, patent rights, copyright and trade secrets, while new plant variety rights fall within the scope of intellectual property rights and should be given the same respect and protection as other intellectual achievements," Li Denghai believes.

In order to protect the rights and interests of seed industry variety rights holders, Li Denghai suggested that when the National People's Congress amends the Criminal Law, it add a provision to Chapter III, Section 7 -- "Without the permission of the variety rights holder, producing or selling a protected variety, where the circumstances are serious, shall be punishable by fixed-term imprisonment of not more than three years, criminal detention or control, and concurrently or alternatively by a fine; where the circumstances are especially serious, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall also be fined."

At the same time, he suggested that the Supreme People's Court issue a judicial interpretation on illegal seed business operations. "To evade supervision, lawbreakers engaged in label switching and infringement mostly do not apply for production licenses, do not sign seed production contracts with farmers, and sell wholesale to temporary agricultural materials markets or directly door-to-door in villages. It is very difficult for the competent agricultural administrative departments alone to trace the source and obtain complete evidence," said Li Denghai. Article 225 of the Criminal Law provides for the crime of illegal business operation and its penalties. Producing or operating seeds without a license, or producing or operating protected varieties without authorization, falls within the category of illegal business operations, but because there is no specific judicial interpretation, public security departments are unwilling to intervene in investigating and handling related cases, and courts do not impose criminal penalties for such illegal acts. "Illegal acts such as producing (operating) seeds without a license or without complying with the requirements of the production (operation) license, or producing or operating seeds of protected varieties without authorization, thereby causing serious harm to society, or seriously disrupting market order, should be brought under the category of the crime of illegal business operation as soon as possible," he suggested.