Zespri has been successful in its legal action against a former kiwifruit grower who took the company’s proprietary plant material to China, where it has continued to spread. The kiwifruit marketer has been awarded almost NZ$15m (US$9.7m) in damages in the judgement.
The civil action was launched in 2018 against Haoyu Gao, his wife Xia Xue and their company Smiling Face. The lawsuit was filed after Zespri discovered that two of its protected kiwifruit varieties had been taken from New Zealand to China and propagated by Gao and his associates.
The court found Gao had fraudulently offered to sell Zespri’s varieties, as well as the right to licence them, to parties in China – a right exclusively retained by Zespri. Gao was also found guilty of facilitating the planting of Zespri’s varieties on Chinese orchards and breaching his contractual obligation to notify Zespri of any infringement that he was aware of.
“Zespri has been investigating the spread of unauthorised plantings of its varieties in China and has identified parties associated with Mr Gao, as well as others who were involved in the establishment of SunGold in China and who knowingly misled Chinese investors and growers to plant Zespri’s varieties without authorisation,” said Zespri’s chief grower and alliances officer Dave Courtney.
“Late last year, Zespri announced it would take legal action under Chinese plant variety rights legislation, and the successful outcome in New Zealand reinforces Zespri’s commitment to pursue all parties involved in or supporting the unauthorised spread of our varieties.”
Courtney said the Chinese Government has strong Plant Variety Rights (PVR) legislation, which it is in the process of strengthening further, alongside enforcement provisions.
“We’re very encouraged by that, as well as by China’s broader commitment and efforts to clamp down on other types of intellectual property infringement in China and we hope to work alongside Chinese officials to strengthen the protections of investors and IP holders further,” Courtney explained.
“A critical aspect of the court’s decision was the recognition of the multi-lateral standards of protection that are afforded all International Union for the Protection of New Varieties of Plants (UPOV) members. That framework was an important part of the court’s ability to find for Zespri, despite some aspects of the infringing activity occurring cross-border or in another country.
“New Zealand and China are both in the process of bringing their PVR legislation into line with the latest UPOV standards, and this decision is a clear recognition of the importance of governments continuing to progress multi-lateral protection mechanisms for innovation and intangible assets.”
Zespri will now consider its options in China in relation to Gao and his associates, as well as seek to collect the damages awarded.