The investments made by breeding companies have brought to the floral market innovations warranting protection. On the other hand, the acquisition of plant variety rights may restrict the economic interests of local farmers. This dilemma inevitably gives rise to tension between protecting innovation and safeguarding the local industrial chain.
The long-standing popularity of poinsettia in the local market, coupled with strong market demand, further intensifies the aforementioned tension. In such scenario, a Judgment rendered by the Supreme Administrative Court in 2025 has its legal significance when the judge touched upon the balance between varietal innovation and agricultural development through an analysis of the burden of proof and shifting of the burden, among others. The core issue of this case concerns how “trial cultivation” and market “promotion” occurring more than one year preceding the filing date (hereinafter referred to as the critical date) are determined. It also marks the very first time the Taiwan judiciary has addressed the loss of novelty in connection with a plant variety.
An analysis of this special case is provided below:
Company A, through its local agent, Company B, filed an application with the Council of Agriculture (now reorganized as the Ministry of Agriculture) on September 26, 2012, for the purpose of securing the plant variety right for a poinsettia plant. The application for the plant variety named “Christmas” (hereinafter referred to as the disputed plant variety) was subsequently approved and published as Plant Variety Right No. A01437.
On November 29, 2021, Petitioner C filed a petition to revoke the plant variety right, asserting that Company B, before the critical date, had already provided seeds of the disputed plant variety to numerous flower growers, including Farmer D, for cultivation. Farmer D subsequently had the disputed variety appraised, exhibited and sold. Given that the typical growth cycle of the plant is approximately 6 to 9 months, it is reasonable to assume that the disputed plant variety had already been circulated in the market before the critical date, thereby constituting a ground for loss of novelty under Article 12 of the Plant Variety and Plant Seed Act.
Company B, on behalf of Company A, argued that prior to filing the application for securing the disputed plant variety right, seeds had indeed been provided free of charge to numerous farmers for trial cultivation, in order to observe whether the plant variety was suitable for local environmental conditions and whether it may satisfy market demand. Although the trial cultivation took place before the critical date, trial agreements executed between Company B and the numerous farmers actually have prohibited dissemination of the seeds or public display. Even if Farmer D, due to personal oversight, breached the agreement, this act did not constitute a promotional activity authorized by the applicant. Accordingly, the disputed plant variety is still in possession of novelty.
The Ministry of Agriculture accepted the argument submitted by Company B and dismissed the petition for revocation. And when the case was brought to the Intellectual Property and Commercial Court (hereinafter referred to as the IPC Court), it affirmed the Ministry's position.
Being dissatisfied with the Judgment, Petitioner C filed an appeal with the Supreme Administrative Court, asserting that Company B had distributed seeds of the disputed variety to hundreds of flower farmers before the critical date, which exceeded the bounds of trial cultivation and constituted commercial promotion of the variety. Moreover, in spite of the execution of some trial agreements, Company B failed to actively fulfill its contractual obligations to retrieve and destroy the cultivated plants. Therefore, the disputed plant variety had already been promoted in the market before the critical date, resulting in a loss of novelty.
For the sake of clarity, the dates and events surrounding the disputed plant variety are summarized below:
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Article 12 of the Plant Variety and Plant Seed Act provides that if, more than one year preceding the filing date, the applicant has sold or consented to the sale or promotion of the propagating or harvested materials of a plant variety in this country, the plant variety shall lose its novelty and shall not be granted variety right. Toward this end, the issues that must be addressed are as follows:
- Whether authorizing a third party to conduct “trial cultivation” constitutes an act of “marketing”;
- whether a third party's breach of contractual provisions under a trial cultivation agreement, such as provisions prohibiting market circulation or sale, affects the determination of novelty of a plant variety; and
- how the evidence on file shall be evaluated in the process of determining novelty.
The main grounds of the Judgment rendered by the Supreme Administrative Court are as follows:
Article 12 of the Plant Variety and Plant Seed Act is based on the 1991 Act of the International Convention for the Protection of New Varieties of Plants (UPOV), which provides that the sale or marketing of propagating or harvested materials, whether domestically or abroad, prior to the filing date must not exceed certain time limits - in the case of domestic acts, not more than one year preceding the filing date. It is reasonable for the IPC Court to deem that the core of the novelty loss lies in whether the acts of sale or marketing were “of a commercial nature.” In other words, purely trial cultivation that does not involve market promotion and is not conducted for the purpose of commercial sale does not, in principle, constitute a ground for loss of novelty.
The trial cultivation agreement executed between Company B and Farmer D expressly restricted the scope of use of the disputed plant variety (limiting it to observation and use within a designated nursery and time period), and prohibited any other form of propagation, public display, or sale in order to maintain the confidentiality of the seeds. Whether Farmer D's subsequent participation in a poinsettia potted plant competition constituted “promotion” of the disputed plant variety became a key issue to be addressed. In this regard, based on the provisions of the trial cultivation agreement and the testimony of Farmer D, the IPC Court found that the trial cultivation did not have the purpose of commercial sale or promotion, and that Farmer D's participation in the competition - due to negligence - was not authorized by the plant variety right holder, and thus did not constitute a ground for loss of novelty.
On the other hand, the Supreme Administrative Court held that, under the circumstance that Petitioner C had in the first place submitted evidence indicating that seeds of the disputed plant variety had been provided for cultivation to Farmer D and had been publicly exhibited prior to the critical date, the IPC Court failed to examine whether Company B's provision of such seeds to Farmer D was motivated by commercial promotion. In particular, in the absence of any contractual claims against Farmer D following his participation in the competition, it is uncertain whether Company B had implicitly consented to Farmer D's market promotion activities. Furthermore, the IPC Court should have investigated whether similar trial agreements were executed with other farmers, the status of implementation thereof, and whether any breaches - such as unauthorized public disclosure or sale - had occurred. All of these matters require further enquiry.
The Supreme Administrative Court further pointed out that any person who believes that a granted plant variety right does not satisfy the requirement of novelty, among others, may file a petition with the competent authority for revocation, accompanied by evidence. However, if the petitioner could prove that a third party had engaged in acts of selling or promoting seeds or harvested materials, and that such seeds were provided by the plant variety right holder or its authorized representative, then the burden of proof shifts to the plant variety right holder who is obliged to rebut the presumption of novelty loss by proving that such acts were not carried out with its consent. In adjudicating such cases, the judge must determine whether the third party's acts of sale or promotion were expressly or impliedly authorized by the plant variety right holder or its authorized representative, taking into account the scope of the authorization, the contents of the agreement executed by the relevant parties, as well as the status of implementation of the agreement. In this regard, Petitioner C has submitted preliminary evidence showing that third party, Farmer D, possessed and used the disputed plant variety. Since the agreement and related documents were within the possession of the plant variety right holder, Company A shall bear the burden of proof to demonstrate that it did not engage in any conduct that constitutes “consent to sale or marketing.” Accordingly, the Supreme Administrative Court remanded the case to the IP Court for further proceedings.
The provision of Article 12 of the Plant Variety and Plant Seed Act reflects Taiwan's legislative intent to establish standards consistent with international plant variety protection. However, the boundaries between conducting “trials” to assess local environmental and market suitability prior to filing, and engaging in “commercial promotion,” are sometimes blurred - particularly when the actual implementation deviates from the contractual provisions - leading to disputes such as in this case.
This case demonstrates that the court places much weight on determining the “intent” based on evidence. Even if contractual provisions prohibit commercial marketing, unsupervised trial cultivation may still be deemed “implied consent” to indirect market promotion. Therefore, when multinational enterprises cooperate with local agents, it is advisable to avoid contractual oversight by, for instance, establishing detailed records of trial cultivation when collaborating with third parties in order to prevent similar disputes.