Sour Grapes: The Impact of Fruit Marketing on The Novelty Requirement of Plant Variety Patents

Sour Grapes: The Impact of Fruit Marketing on The Novelty Requirement of Plant Variety Patents

A decision issued by the Court of Bari on 1 August 2024 has stressed a key principle of plant variety protection, namely that of the novelty requirement.

In this respect, it is worth remembering that unlike invention patents, where absolute novelty is required (i.e. the invention is new if it is not comprised in the state of the art), a plant variety in order to be deemed new must not have been commercially exploited before the relevant grace period.

In 2018, the US company Sun World International LLC (hereinafter 'Sun World'), one of the largest and oldest breeders and sellers of fruit, and particularly grapevine, sued Gianni Stea Import-Export s.r.l. (hereinafter 'Gianni Stea'), an Italian company of the Puglia Region, for infringement of their Italian patent No. 1138 - applied for in 1983 and granted in 1994 and concerning the table seedless grape variety named 'Sugraone' - and infringement of their trade mark 'Superior Seedless' as well as for unfair competition.

Gianni Stea appeared in court, contested Sun World’s claims as unfounded, requested that a third party be sued as sole liable for the matter at issue, and by way of counterclaim requested that a) the patent in question be declared invalid as lacking the requirement of novelty, b) the trade mark 'Superior Seedless' be declared lacking any distinctive character, c) Sun World be held liable for emulative conduct towards Gianni Stea, abuse of dominant position and other anti-competitive practices to be ascertained during the proceedings, and d) order Sun World to pay compensation for the pecuniary and non-pecuniary damages suffered and to be suffered by Gianni Stea.

Invalidity of the patent was requested by Gianni Stea on the basis that Sun World had been growing the 'Sugraone' variety in California and selling fruits thereof long before the beginning of the grace period allowed by law.

First of all, the Court of Bari identified Italian Presidential Decree No. 974/1975 as the legislative basis for ruling, which decree states in respect of novelty that “Prior to the filing of the patent application, the plant variety must not, with the agreement of the breeder or his successor in title, have been the subject of commercial acts in Italy, nor, for more than four years, in any other State” (Art. 1(3)) and “[…] the fact that a new plant variety has been the subject of cultivation trials or has been entered, or has been presented for registration, in an official register may not be opposed to the breeder of the variety or his successor in title".

According to the plaintiff, the abovementioned 'commercial acts' capable of destroying novelty refer only to the commercialization of the propagation material of the variety and not to any other material from the plant, in particular, its fruits.

The Court, instead, considered that the grace period of four years for exploitation abroad which was allowed by the UPOV Convention to the breeder at that time (now extended to six years for trees and vines according to Art. 103 of the Italian IP Code currently in force) to carry out field tests in order to assess other requirements for patenting, namely stability and homogeneity, is intended to verify the quality of the fruits that are the very essence of the invented plant variety, which fruits can also be sold (and therefore monetised) during said grace period without the breeder suffering any prejudice for future patenting.

Therefore, if the breeder makes a profit from exploiting a variety before patenting it and outside the grace period referred to above, by commercialising the propagation material or the fruits of the variety, or both, the novelty requirement is not met.

Acknowledging that marketing of the fruits of the plant falls within those commercial acts that are detrimental to novelty is an important aspect to prevent abusive conduct and speculation by breeders who, after many years of marketing the product of a new variety abroad without commercialising the reproductive material thereof, could still obtain a patent for said variety in any country member to the UPOV Convention.

Of course, the boundary between cultivation intended for crop trials and cultivation intended for fruit sale lies in the extent of the cultivation, as cultivation intended for field trials and selection would involve limited cultivation areas and therefore limited quantities of fruits that can be produced and marketed.

In the case in question, from the official technical consultancy (OTC) requested by the Court it resulted that the marketing of grapes of the 'Sugraone' variety dates back to 1975 (i.e. much earlier than the opening of the four-year grace period on 14.09.1979) and that the quantity (acres) of cultivation in California are so significant that they cannot certainly be attributed to crop trials, let alone for a single variety.

Also, the fact that, in a past case held before the EUIPO’s Board of Appeal, Sun World itself, in the person of its Senior Vice President, stated that the mark 'Superior Seedless' used to distinguish the 'Sugraone' grape variety had acquired distinctive character as from 1975 proved that this variety was indeed being marketed already in 1975.

For the above reasons, the Court of Bari declared the invalidity of Italian Patent No. 1388 granted to Sun World International LLC on 13.12.1994 on an application filed on 14.09.1983.

All the remaining claims by Sun World and counterclaims by Gianni Stea, which are not handled in detail here, were dismissed.

This articulated decision sets boundaries to the power of big foreign multinationals and rejects conditions that would jeopardise the freedom of small entrepreneurs to cultivate and market their varieties and thus reduce their income.