CHANG TSI
Insights
Intellectual property rights are time-limited. Once the term expires, the right terminates, the subject matter enters the public domain, and anyone is free to exploit it. But what if the infringing goods were produced during the term, and only the sale was deferred until after expiry? In April 2026, the Intellectual Property Court of the Supreme People’s Court (SPC) gave a clear answer in a case concerning infringement of the plant variety right in "Jimai 22".
Key Points Of The SPC Judgment: Infringing seed produced without authorization during the term of protection of a plant variety right does not become lawful seed merely because the term has expired. Where the producer of that seed sells it after expiry, the sale is the natural continuation of its infringing production and propagation, and likewise infringes the plant variety right in the protected variety.
"Jimai 22" is a common wheat variety bred by a research institute. It was granted a plant variety right (CNA20060015.X) on 1 May 2009 for a 15-year term running from the date of grant, expiring on 30 April 2024. Company A, the exclusive licensee, was entitled to enforce in its own name.
In August 2024, roughly three months after expiry, Company A made a notarized purchase in Dong’e County of wheat seed labelled "Zhongboke Jimai 22". The packaging bore Company B’s name, registered trademark and seed production and business license number. The record further showed that on 3 October 2023 Company B had entered into a wheat seed multiplication and purchase agreement with a third party (700 mu of planting area; 280,000 kg to be purchased), and that in June 2024 it amended the duplicate of its seed production and business license to add "Jimai 22" - submitting that very agreement as part of the application materials.
At first instance, the Jinan Intermediate Court held that Company B’s production and propagation during the term infringed, but that the post-expiry sale did not; profits from the sale could serve only as a reference point for measuring the profit attributable to production. The court also treated expiry of the term as a mitigating factor and awarded CNY 50,000 (approx. USD7,143).
On appeal, the SPC held that infringing seed produced without authorization during the term does not become lawful seed upon expiry; the producer’s post-expiry sale of that seed is the natural continuation of its infringing production and propagation and likewise infringes; and the profits earned at the sales stage must be taken into account in assessing damages. The judgment was varied to award the full CNY 200,000 (approx. USD28,571) claimed, with all first- and second-instance court fees borne by Company B.
This is the part of the judgment with the greatest precedential value.
The SPC first set out a methodology: protection of a plant variety right must account for the seasonality of agricultural production and must extend across the full chain. Different varieties have their own planting seasons and growth and propagation cycles, and the processing and marketing of propagating material also take time - a sequence that may straddle the expiry date.
Accordingly, the time of production and propagation may reasonably be inferred from the time of sale, read together with the planting season and growth cycle of the particular variety.
Applying that method, the SPC worked backwards: the evidence was obtained in August 2024; given that "Jimai 22" is sown in early October and harvested in late June of the following year, production of this batch must have begun no later than October 2023 - otherwise the seed could not have been available on the market three months after expiry. The agreement of 3 October 2023 corroborated the inference. The character of the production and propagation as infringement was not altered by the subsequent expiry of the term.
On that footing the SPC articulated two propositions, the second building on the first: infringing seed produced without authorization during the term does not become lawful seed upon expiry; and the producer’s post-expiry sale of that seed is the natural continuation of its infringing production and propagation and likewise infringes the plant variety right.
The first-instance treatment of expiry as a mitigating factor was expressly corrected. If the post-expiry sale is itself an act of infringement, the profit earned at that stage must be brought into the damages assessment.
How the SPC arrived at the figure: the quantity of 280,000 kg came from the documents Company B had itself filed with the regulator; a reasonable profit of CNY 0.5 per Jin was estimated by taking the gap between the lowest unit price and the 2024 published minimum wheat purchase price, adjusted modestly upward; and Company B, as producer, having declined to adduce or explain its pricing and profit data, bore the adverse consequences of that failure.
CNY 0.5/jin × 280,000 kg × 2 = CNY 280,000 (approx. USD40,000), which exceeds the CNY 200,000 (approx. USD28,571) claimed. The claim was therefore allowed in full.
1. The "Natural Continuation" Rule Is Confined To The Producer
The holding is expressly limited to "the producer of the infringing seed" - that is, to a sale carried out by the party at the source of manufacture. It does not reach good-faith downstream distributors. A plant variety right remains time-limited, and a third party who lawfully acquires and resells the same batch after expiry should retain the legitimate-source defense.
2. Back-calculation From The Production Cycle Is A Transferable Method Of Proof
Anchoring on the date of sale and reasoning backwards through industry production cycles and processing and go-to-market lead times works equally well for seasonal and heavily industrialized products. In patent enforcement, batch numbers, manufacturing dates, tooling and production-line records, regulatory filings and listing dates on e-commerce platforms can all be assembled into the same kind of inferential chain.
3. The Infringer’s Own Regulatory Filings Are High-value Evidence
The 280,000 kg figure that drove the award came straight from the materials Company B had submitted to the competent authority. In heavily regulated sectors - seed, agrochemicals, medical devices, cosmetics - licensing and filing records are often the shortest route through the perennial difficulty of proving the scale of infringement.
4. The Divergence From The Patent Framework Must Be Kept In View
Under Article 11 of the Patent Law of the PRC, the enumerated acts of exploitation are assessed independently of one another, and a post-expiry sale is generally not an infringement because the right has terminated - which is precisely the reasoning adopted at first instance here. The SPC went further, characterizing the sale as a "natural continuation". The justification lies in features peculiar to plant variety rights: propagating material is self-replicating, and agricultural production cycles are long, so tolerating post-expiry dumping would hollow out the final growing season of the term.
Whether that logic can be carried across to patents calls for caution. But the case supplies a powerful argument in support of the following proposition: expiry of the term is never a reason to mitigate liability for infringement committed during it, and profit from selling goods manufactured in-term should be counted as profit derived from the infringement. Whether the damages base in a patent case can be argued on that footing is a question worth exploring further.
5. A Compliance Warning: Stockpiling in the run-up to the expiry of someone else’s IP right cannot be laundered by deferring the sale. What determines liability is the timing at the production end - and the larger the stockpile, the larger the damages base.
This commentary is an academic analysis of a publicly available judgment and does not constitute legal advice on any particular matter.
