Analysing the Court of Bari’s Decision on the Invalidity of the ‘Sugraone’ Plant Variety Right for grapes being sold under the mark “Superior Seedless”

Analysing the Court of Bari’s Decision on the Invalidity of the ‘Sugraone’ Plant Variety Right for grapes being sold under the mark “Superior Seedless”

Justice Manmohan Singh of the Delhi High Court has remarked in a judgment, “The world is a global village.” This sentiment captures the essence of our interconnected era, where globalization and interconnected markets continually redefine our world. Today, the judgments handed down in courtrooms across the globe can have far-reaching consequences and the ripples of these legal decisions extend far beyond their local jurisdictions, influencing economies and industries worldwide.

Welcome to “A View from Afar,” a series dedicated to examining international judgments and their far-reaching impacts. Through this series, we aim to bridge the gap between diverse legal systems and their global repercussions, offering you a panoramic view of the intricate interplay between law and commerce.

We will delve into landmark rulings from various corners of the world, unpacking the legal reasoning behind such decisions and scrutinizing their practical implications. Each article will provide a thorough analysis, shedding light on how these judgments affect not only the parties directly involved but also affect the regulatory frameworks, corporate strategies, and market dynamics on a global scale.

Whether it is a judgment delivered in the United States or the European Union, we will share our views on its profound impact in other jurisdictions navigating through the labyrinth of international jurisprudence.

Join us in this further instalment of “A View from Afar” as we delve into the nuances of the ruling delivered on August 1, 2024, by the Court of Bari, Italy (Specialised Business Section) in the realm of plant variety rights (PVRs) and trademark law. The Court declared the Italian PVR for the seedless table grape variety ‘Sugraone’ invalid on the grounds of novelty. It also dismissed the claims of trademark infringement and invalidity concerning the trademark “SUPERIOR SEEDLESS” owned by Sun World International LLC.

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‘Sugraone’ was the pioneering seedless table grape variety introduced to the Italian market in the late 1980s. Sugarone being a seedless variety, one cannot reproduce or propagate the Sugarone from the grapes. Sugarone can be propagated only by using cuttings or propagating material from an existing vine.

Sun World International LLC (Sun World), is a prominent agricultural company specializing in the development and marketing of fruit varieties. Sun World owns the legal rights to the Sugarone grape variety that were acquired by it from the Superior Farming Company in 1972. Sun World is also the ownerand registered proprietor of the mark “SUPERIOR SEEDLESS” in several countries across the world since the 1980sunder which it sells Sugarone grapes.

The PVR application for ‘Sugraone’ was filed on September 14, 1983. The defendants, Gianni Stea Import-Export s.r.l. and Angela Miglionico, challenged the PVR’s validity on the grounds of novelty and argued that the mark SUPERIOR SEEDLESS lacked distinctiveness. Therafter, Sun World filed a suit against the defendants for infringing the PVR ‘Sugraone’ and the mark “SUPERIOR SEEDLESS”, and for having engaged in unfair competition.

This decision is the latest development and a crucial chapter in the protracted legal dispute between Sun World and the defendants, following an earlier case concerning the ‘SugraNineteen’ grape variety that reached the Italian Supreme Court.

Novelty in Plant Variety Rights

Plant variety rights (PVRs) have a distinct standard for novelty compared to patents. While patents require “absolute novelty,” meaning the invention must not have been disclosed before the priority date, PVRs require “commercial novelty.” According to Article 103 of the Italian Code of Industrial Property, a variety is considered novel if, as of the application filing date, it has not been sold or transferred for exploitation:

• For more than one year within Italy.
• For more than four years (or six years for trees and vines) outside Italy.

The PVR application for ‘Sugraone’ was filed on September 14, 1983. The relevant grace period began four years before the filing date, i.e., September 14, 1979. However, the evidence indicated marketing activities dating back to 1975, predating the grace period.

Evidencepresented included reports of ‘Sugraone’ grapes being marketed in the United States since 1975, demonstrating significant cultivation on extensive land areas. Additionally, testimony from Sun World’s Senior Vice President to the European Union Intellectual Property Office (EUIPO) referenced the marketing of SUPERIOR SEEDLESS since 1975. This evidence was pivotal in assessing the novelty of the ‘Sugraone’ PVR.

Sun World argued that novelty could only be destroyed by the commercialization of propagating material, not harvested material. However, the Court held that the terms “offered for sale” and “marketed” included both plant and fruit. This interpretation is consistent with the 1991 Act of the International Convention for the Protection of New Varieties of Plants (UPOV), which includes harvested material in the novelty definition under Article 6(1). The Court emphasized that excluding harvested material from novelty considerations could lead to exploitation by breeders, allowing them to delay PVR applications indefinitely.

The Court’s reasoning was based on the need to prevent abuse and speculation. The Court noted that allowing harvested material to be excluded from novelty considerations could enable breeders to market new varieties abroad for extended periods before seeking PVR protection. This would undermine the purpose of PVRs, which is to encourage innovation and provide legal certainty.

Trademark and Unfair Competition

The Court examined the relationship between the plant variety denomination ‘Sugraone’ and the trademark SUPERIOR SEEDLESS. Sun World claimed that the use of ‘Sugraone’ by the defendants was likely to confuse consumers regarding the origin and quality of the grapes. The defendants countered that consumers associated SUPERIOR SEEDLESS with the variety, not ‘Sugraone.’ The Court agreed with the defendants, finding no likelihood of confusion and also dismissed Sun World’s argument that the defendants infringed the trademark. The Court noted that this claim was inconsistent with Sun World’s earlier argument about unauthorized use of propagating materials. The Court found that Sun World had failed to demonstrate that consumers would be confused by the defendants’ use of ‘Sugraone.’

Legal Framework in India

In India, the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act), which governs the protection of plant varieties, represents a significant legislative effort by the Indian government to balance the rights of commercial plant breeders and farmers.

Protection of the plant varieties under the PPVFR Act, 2001 accelerates agricultural development and stimulates investment for research and development for the development of new plant varieties, which in turn facilitates the growth of the seed industry and ensures the availability of high quality seeds and planting material to the farmers.

A total of around 18677 applications for registration have been received by the Authority out of which 7736 certificates have been issued for new varieties.

Section 15 of the PPVFR Act outlines the criteria for registration, including novelty, distinctiveness, uniformity, and stability (NDUS). These criteria ensure that a variety is clearly distinguishable from existing ones, consistently exhibits its essential characteristics, and remains stable after repeated propagation.

In the case of Pioneer Overseas Corporation V. Chairperson, Protection of Plant Varieties and Farmers’ Rights Authority (2019), the Delhi High Court emphasized the importance of the novelty requirement under the PPVFR Act. The court held that the prior commercial exploitation of a variety outside the grace period would invalidate the PVR. This mirrors the Court of Bari’s approach in assessing novelty by considering the marketing of ‘Sugraone’ grapes before the relevant grace period.

Another notable case under this Act is the revocation of intellectual property protection for PepsiCo India’s potato variety, FL 2027. This case involved PepsiCo’s claims over its proprietary potato variety FL 2027. The issue of novelty and prior use was central to the dispute, with the Delhi High Court examining whether the variety had been commercially exploited before the application for protection. This case highlights the importance of proving the novelty of a plant variety in India, similar to the ‘Sugraone’ case in Italy.

The FL 2027 potato variety, developed by Robert W. Hoopes at Frito-Lay Agricultural Research, is specifically bred for chip production by PepsiCo’s Lay’s brand. Its high dry matter, low sugar content, and lower moisture content make it ideal for chip manufacturing by minimizing dehydration and energy costs during processing, while also reducing the risk of blackening when fried.

PepsiCo India Holdings was granted registration for the FL 2027 as an “extant variety” on February 1, 2016, by the Protection of Plant Varieties and Farmers’ Rights Authority (PPVFRA). This registration protected PepsiCo’s rights over the variety, preventing others from commercially producing, selling, or distributing it without authorization for six years, extendable up to fifteen years.

However, PepsiCo’s initial application in 2012 sought registration of FL 2027 as a “new variety.” For a plant to be classified as a “new variety” under the PPVFR Act, it must not have been sold in India earlier than one year before the application date. FL 2027 met the criteria for distinctiveness, uniformity, and stability however, failed the novelty criterion, as it had been commercialized in Chile in 2002.

PepsiCo provided an incorrect first date of commercialization (December 17, 2009), while evidence showed that the variety had been commercialized in Chile in 2002. Consequently, the PPVFRA revoked the protection in December 2021 and rejected PepsiCo’s renewal application in February 2022. The Authority emphasized that Indian rules do not allow a patent on seed varieties.

Thereafter, PepsiCo challenged the PPVFRA’s decision in the Delhi High Court. The Court upheld the Authority’s decision, finding that PepsiCo’s application for FL 2027 as a “new variety” was flawed due to the incorrect commercialization date and reaffirmed the PPVFRA’s stance on protecting plant varieties under the PPVFR Act, ensuring that the legal framework supports both agricultural innovation and compliance with statutory requirements.

Author’s Notes

The Court of Bari’s decision and the facts surrounding it, prompted me to analyse the implications of the same with respect to the Indian Intellectual Property Law landscape and consider the key takeaways necessary for plant variety rights and trademark law. The decision underscores the importance of understanding the nuanced legal standards for novelty in PVRs and the strategic considerations necessary for protecting intellectual property. This case serves as an instructive example for breeders, companies, and legal practitioners in the field of intellectual property law.

Key Takeaways & Lessons to be learnt

Novelty and Marketing Strategies

Plant variety rights require “commercial novelty,” which differs from the “absolute novelty” required for patents. This distinction is crucial in assessing the validity of PVRs. The inclusion of harvested material in PVR protection’s novelty assessment highlights the need for breeders to carefully plan their marketing strategies. The timing and nature of marketing activities can significantly compromise the novelty of their plant varieties thereby jeopardizing PVR protection. Breeders must be vigilant in ensuring that their marketing activities do not inadvertently jeopardize the novelty of their varieties.

The Court of Bari interpreted “offered for sale” and “marketed” broadly to include both propagating and harvested material. This interpretation aligns with international conventions and aims to prevent potential abuse by breeders.

Importance of Trademark Strategy:

The case highlights the significance of a robust trademark strategy that effectively distinguishes between the generic variety name and the trademark. Sun World’s emphasis and contesting for the mark SUPERIOR SEEDLESS rather than the denomination ‘Sugraone’ may have inadvertently led to a lack of consumer awareness of the generic variety name. This highlights the need for companies to carefully consider their branding strategies and ensure that trademarks and variety denominations are used in a way that minimizes consumer confusion. A well-executed strategy can mitigate consumer confusion and enhance brand protection.

Companies should develop clear and consistent intellectual property strategies which include inter alia trademarks being distinctive and clearly differentiated from generic variety names.

Understand Legal Standards & Consistency in Claims:

The Court of Bari’s decision provides critical insights into the interplay between PVRs and trademarks. It illustrates the importance of understanding the legal requirements for novelty and the potential pitfalls of failing to properly manage intellectual property rights. Moreover, consistency in legal contentions and submissions is essential as contradictory claims can undermine the credibility and effectiveness of a legal strategy.

Legal practitioners and breeders should have a comprehensive understanding of the specific legal standards for novelty in PVRs. Familiarity with both national and international regulations is essential.