Dongxiao Ma, partner of Zhonglun Law Firm

The Chinese version is first published at https://mp.weixin.qq.com/s/qJalYEHQ073OAi7nyAljKA 

马东晓 | 植物新品种繁殖材料可以作为商业秘密予以保护——简评（2022）最高法知民终147号案件

01/ Case in Brief

Huasui’s “Wannuo 2000” corn hybrid bred by “W67” as female parent and “W68” as male parent obtained the new plant variety right on November 1, 2015, with the variety right number CNA20120515.0. Housui found that Bosheng had obtained the “W68” corn inbred line variety of Huasui by improper means. On September 24, 2020, Huasui applied to Liangzhou District People’s Court of Wuwei City, Gansu Province for on-site evidence preservation of “W68” seed sample of BoBaosheng Company and filed a lawsuit against technical secrets with Lanzhou Intermediate People’s Court of Gansu Province on October 16, 2020.

The court of first instance extracted the “W68” standard sample of the father of “Wannuo 2000” from the National Seed Quality Assurance Center of China Academy of Agricultural Sciences on June 9, 2021 and appraised the variety authenticity together with the corn sample with the word “General Factory” written on the file cover seal of the People’s Court of Liangzhou District, Wuwei City. Beijing Corn Seed Testing Center made the inspection report BJYJ202100701257 on June 17th, 2021 and found that the comparative locus of the sample to be tested and the standard sample of “W68”, the parent of “Wannuo 2000”, was 40, and the difference locus was 0. The inspection conclusion was very similar or identical.

The court of first instance made a judgment based on “W68” as the parent of the new maize variety “Wannuo 2000”, which met the confidentiality requirements of the Anti-Unfair Competition Law (“AUCL”), as well as the confidentiality measures taken by Huasui for this technical information, and combined all kinds of evidence to support Huasui’s litigation request. Baosheng refused to accept the first-instance judgment and appealed to the Supreme People’s Court in August 2021. On November 2, 2022, the Supreme People’s Court made the final judgment, rejected the appeal and upheld the original judgment.

02/ Judicial Opinions 

One of the points in dispute in this case is whether the parent “W68” of “Wannuo 2000” meets the conditions for the protection of trade secrets under AUCL. The court discussed this from two aspects.

1. Whether the parents of hybrids belong to the object of trade secret protection.

During the second trial, Baosheng held that only the breeding technical information related to the parents belonged to the trade secret that protected by AUCL, and “W68”, as a parent, did not belong to the protection object of the trade secret.

The Supreme People’s Court believes that the breeding intermediate materials and inbred parents formed in the process of crop breeding are different from the plant materials found in nature. They are the intellectual achievements of breeders’ creative work, bearing the specific genetic genes formed by breeders’ selection and domestication of natural plant materials or selection of existing varieties. This breeding material has the characteristics of both technical information and carrier, and the two are inseparable. Breeding materials with commercial value obtained through breeding innovation activities can be legally protected as commercial secrets, provided that they are unknown to the public and corresponding security measures are taken.

2. Whether the parents of the hybrid involved were not known to the public at the time of the alleged infringement.

Baosheng appealed that Huasui and its stakeholders had sold “W68” as a product, and the seed production behavior entrusted by Huasui to a seed breeding company led to “W68” becoming a commodity and being publicly sold by farmers; In addition, “W68” and its source were disclosed in the validation announcement of “Wannuo 2000”, so “W68” has been known to the public and is not confidential.

The Supreme People’s Court believes that the actual control of the breeding materials by the obligee is the key to breeding by using its genetic information. In this case, “W68” belongs to the breeding materials that are unknown to the public. The main reasons are as follows:

First, “W68” is only the number of breeding materials, which is the code given by breeders for the next step in crop breeding. It points to the breeding materials actually controlled by breeders. Although a specific number such as “W68” represents a specific genetic gene formed by the breeder’s selection and domestication of natural plant materials, the specific genetic gene is carried in the crop materials, and it is not of breeding value if it is separated from the code name of the crop materials themselves. The actual control of the breeding materials is the premise of using its specific genetic information. As the results of breeding innovation are embodied in the specific genes of plant materials, it is impossible to separate them from the plant materials bearing the innovative results. Publicizing the code name does not mean disclosing the genetic information of the crop materials.

Secondly, the approval announcement records that “W68” was bred by crossing Wan6 and Wan2 lines and self-fertilization for 6 generations. Wan2 and Wan6 lines are used as crop materials for breeding parents, which is the core competitiveness of crop breeding. Usually, breeders don’t sell it publicly, so it is difficult for the public to obtain it. To take a step back, even if Wan2 and Wan6 lines can be obtained, in the process of breeding inbred line parents, breeders will have a certain degree of uncertainty in the selection of offspring when faced with the selection of excellent individual plants and strains. Therefore, even if the Wan 2 line and Wan 6 line are used for cross breeding, the inbred line obtained is not necessarily “W68”, and it can’t be inferred that “W68” is known to the public only from the published breeding source of “W68”.

Thirdly, although maize hybrids are obtained by cross breeding of their parents, it is very difficult to obtain their parents from hybrids in reverse based on the characteristics of maize cross breeding and the current technical conditions. If “Wannuo 2000” is not sequenced and isolated professionally, it is difficult to obtain its parents, and it is even more difficult to guarantee that the obtained parents are exactly the same as “W68”. Therefore, the fact of publicly selling “Wannuo 2000” can’t of course lead to its parent “W68” being easily available to the public, let alone the conclusion that the parent “W68” has lost its confidentiality.