Federal Circuit Weakens Scope of Plant Variety Protection Act

The Federal Circuit recently ruled on a case that implicated two unique areas of intellectual property law: the Plant Variety Protection Act (PVPA) and \'reverse passing off\' under the Lanham Act. The PVPA provides a special kind of protection to plant variety breeders. The protection excludes others from selling the patented variety, offering it for sale, reproducing it, importing or exporting it, or using it in producing a hybrid or different variety. The Lanham Act, among other limitations, prevents an entity from misrepresenting someone else's goods or services as its own (called \'reverse passing off\'). In this case, Syngenta Seeds produced a wheat variety known as \'Coker 9663,\' for which it had a PVPA certificate. As part of its business, Delta Cotton purchased local farmers' harvested wheat, placed it all in a single, mixed storage bin, and then sold it in bags labeled as \'Delta Co-op Feed\' intended to be fed to farm animals. Unbeknownst to Delta, over 90% of the wheat in bags tested by Syngenta comprised Coker seed. Subsequently, Syngenta filed suit against Delta for infringement of the PVPA and the Lanham Act in district court and won on both issues. The Federal Circuit reversed on both issues.First, the Federal Circuit determined that the District Court ignored the requirement that the dispenser of the seed receive notice of the PVPA protection, which Delta never had. Consequently, the Federal Circuit ruled that damages against Delta were inappropriate under the PVPA because the PVPA requires the protected product be labeled as protected when received by a subsequent purchaser to give notice to potential infringers, or that the purchaser actually knew the seeds were protected. Here, the wheat the individual farmers sold to Delta was not labeled to give notice of its protection, unlike the bags of seed that the farmers originally bought to plant the wheat. As a result, Syngenta could not recover damages under the PVPA.Second, the Federal Circuit found no Lanham Act violation because a purchaser of Coker wheat that was marked \'Delta Co-op Feed\' could never have known that it had purchased the trademarked product, and thus could not have drawn any conclusion about the merits or quality of that product relative to Syngenta. The court further questioned whether there was even any harm under the Lanham Act where the re-branded product is used for a different purpose than, and thus does not compete with, the \'authentic\' product. Here, there was insufficient evidence that the wheat sold as \'feed\' that would compete with Syngenta's Coker product specifically sold as \'seed.\' The biggest consequence of this ruling is that an unscrupulous user who removes seeds from their original labeled container and resells them without giving notice of PVPA protection effectively immunizes all subsequent purchasers from PVPA infringement damages. Essentially, an innocent purchaser of PVPA protected seeds is not liable for infringement unless they knew the seeds were protected. In contrast, if the seed were protected under utility patents and a substantial majority of the seeds were sold in bags marked with the patent number, a subsequent purchaser would likely sill be liable for infringement of the utility patent. Thus, the usefulness of the PVPA to effectively protect seed varieties as compared to utility patents was diminished by this ruling.A copy of the full-length decision can be found at http://fedcir.gov/opinions/05-1507.pdf.


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