Plant variety rights ECJ decision

“CJEU: In case of an infringement, the holder of a plant variety right can, based upon community law, neither claim punitive damages nor restitution of the gains and profits made.”

By its ruling of 9 June 2016 (C-481/14, Jørn Hansson ./. Jungpflanzen Grünewald GmbH) the Court of Justice of the European Union (CJEU) set ground rules on how to determine the damages payable for an infringement of a plant variety right.

Background

Mr Hansson, the holder of a plant variety right, sued Jungpflanzen Grünewald GmbH alleging infringement of his plant variety right. The claimant argued that the defendant not only had to pay compensation in the amount of a theoretical license fee but also a supplement to that license fee. Against this background, the higher regional court of Düsseldorf decided to address the CJEU with several questions on how to determine the damages payable for an infringement of a plant variety right protected under Regulation No 2100/94.

The Decision

Even though the Advocate General had previously argued in favour of a broad understanding of the concept of damages (not available in English), the decision of the CJEU follows a much more conservative approach. The CJEU decided that “the extent of the compensation payable under Article 94 of Regulation No 2100/94 must reflect, as accurately as possible, the actual and certain damage suffered by the holder of the plant variety right because of the infringement.” In general, this covers the fee that would normally be payable for licensed production and all damages that are closely connected to the failure to pay such fee (e.g. interest). Further damages can be claimed only to the extent the claimant can proof that he actually suffered a loss beyond that.

According to the CJEU, the principle of objective and full compensation following from Article 94 of Regulation No 2100/94 leads – amongst others – to the following conclusions: First of all, the infringer is not obligated to pay a flat-rate infringer supplement which would be independent from the loss the holder has actually suffered. Secondly, the court stated that the holder is not entitled to claim restitution of the gains and profits made by an infringer on basis of Article 94 of Regulation No 2100/94, because such gains and profits might not represent an actual loss of the holder; with respect to such claims, the court refers to national law (see Art. 97 of Regulation No 2100/94).

Implications

Whilst the CJEU substantially reinforced the rights of the plant variety right holders by its ruling of 25 June 2015 (C- 242/14, Saatgut-Treuhandverwaltungs GmbH ./. Gerhard und Jürgen Vogel GbR) in relation to the farmers privilege, this time the CJEU failed to step in for a well-protected community plant variety right. Enhanced compensation in the form of punitive damages – which does exist in connection with the farmers privilege (Article 18 sec. 2 of Regulation No 1768/95) – might help prevent infringements of plant variety rights. Unfortunately, the CJEU denied such claims. Not only does this decision fail to better protect community plant variety rights, it even might fall short of the compensation that holders of national plant variety rights can claim under their respective national laws. This leads to the unfortunate result that, in some circumstances, a national plant variety might – at least in some aspects – provide better protection than a community plant variety.