Major kiwifruit producer Zespri successfully defends IP rights

Zespri has emerged victorious in a 2018 civil action brought in New Zealand against a kiwifruit grower and their Whakatane-based company.

On 14 February 2020, kiwifruit producer Zespri announced the successful result of legal action taken against a kiwifruit grower who brought the global brand’s protected plant material from New Zealand to China where it has continued to spread, as well as the awarding of almost US$15 million in damages.

The civil action was launched in New Zealand in 2018 against Haoyu Gao, his wife Xia Xue and their company Smiling Face Limited, after Zespri discovered that two of their protected kiwifruit varieties had been taken to China and propagated by Mr Gao and his associates.

Mr Gao was held to have fraudulently offered to sell Zespri’s varieties as well as the right to licence them to parties in China – a right exclusively retained by the Mount Maunganui-based company, facilitated the planting of Zespri’s varieties on Chinese orchards and breached his contractual obligation to notify Zespri of any infringement that they were aware of.

Zespri’s Chief Grower and Alliances Officer Dave Courtney lauded the decision, stating that the company had 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”.

In late 2019, Zespri announced it would take legal action under Chinese plant variety rights legislation, and the recent successful outcome in New Zealand reinforces Zespri’s efforts in pursuing all parties involved in or supporting the unauthorised spread of their varieties.

Mr Courtney added that the Chinese Government has strong Plant Variety Right legislation which it is in the process of strengthening further, alongside enforcement provisions. He went on to state that “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”.

Moving forward, Zespri will now consider its options in China in relation to Mr Gao and his associates, as well as seek to collect the damages awarded.