Limitations on claims for infringement of an EU protected plant variety
Ewa Nagy
Wardyński & Partners, Warsaw
Monika A Górska
Wardyński & Partners, Warsaw
monika.gorska@wardynski.com.pl
On 14 October 2021 the Court of Justice issued its judgment in José Cánovas Pardo SL v Club de Variedades Vegetales Protegidas (Case C‑186/18), involving the method for calculating the limitations period on protection of Community plant variety rights. The court focused on clarifying the notion of individual infringements within the context of constant infringements. Right holders can conclude from the ruling that they should not delay a decision to pursue claims through the courts.
A dispute over mandarin trees – the rulings of the Spanish courts and the request for a preliminary ruling by the Court of Justice
The case under which the Court of Justice issued its ruling concerned a dispute before the Spanish courts over protection of the Nadorcott variety of mandarin tree. The rights to this variety were held by a company established by the Moroccan royal family. José Cánovas Pardo SL, a Spanish farming company, cultivated thousands of Nadorcott trees without a licence. Representatives of the holder first demanded that Pardo cease violating its rights to the tree in October 2007. On 30 March 2011, another demand was issued, this time by an entity that had assumed management of the rights to this mandarin variety. In November 2011 this entity commenced preliminary measures in a Spanish court toward a finding of an infringement of the exclusive rights to the Nadorcott variety, and subsequently commenced an infringement action.
The commercial court in Spain found that the claims were time-barred, and dismissed them because more than three years had passed between identification of the alleged infringer, as confirmed by transmission of the first demand to cease and desist in 2007, and the filing of the claim. The court indicated Art. 96 of Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights as the legal basis for its ruling. Under that provision, claims arising out of Community plant variety rights ‘shall be time barred after three years from the time at which the Community plant variety right has finally been granted and the holder has knowledge of the act and of the identity of the party liable or, in the absence of such knowledge, after 30 years from the termination of the act concerned’.
On appeal, the provincial court took a different position. It found that claims based on infringements committed less than three years before the filing of the action were not time-barred, but only claims concerning acts that took place more than three years before the filing were barred. Consequently, the court awarded the holder €31,199 in damages, and ordered Pardo to cease and desist its infringement of rights to the Nadorcott variety, as the action sought both monetary and injunctive relief.
Considering a cassation appeal by Pardo, the Supreme Court of Spain submitted a request for a preliminary ruling to the Court of Justice, to determine how to calculate the three-year prescription (limitations) period under Art. 96 of Regulation 2100/94. The court sought to determine whether this period begins to run only when the infringement ceases, or begins at the same time regardless of whether the infringement continues or has ceased.
The national intellectual property case law from the Spanish courts distinguishes between occasional acts of infringement and constant acts of infringement. In the latter case, the limitations period does not begin to run so long as the infringement is ongoing. Citing the established national jurisprudence, the holder argued that the limitations period on claims for protection of a Community plant variety did not begin to run until the infringement ceased. The defendant argued that the limitations period began to run from the time the holder learned of the infringement and the identity of the alleged infringer, and this should also apply to all acts by the alleged infringer after that date.
Advocate general’s position
In his opinion, the advocate general posited three arguable interpretations of the limitations issue:
- The claims are entirely time-barred, regardless of the date of the alleged infringements. If the holder were aware for three years who was infringing its rights, and how, it would forfeit the ability to pursue its rights.
- The claims are partially time-barred, that is only with respect to acts committed more than three years before the claims were brought.
- The claims are not time-barred at all, as the infringing acts were ongoing at the time the claims were brought. The holder could pursue its rights with respect to all disputed acts so long as the perpetrator has not ceased the infringing acts.
The advocate general proposed that the Court of Justice should hold that in the case of acts spread out over time, the consequences of prescription should cover only acts taken more than three years earlier (position number two). He strongly rejected position number three, regarding it as inconsistent with the requirement of legal certainty. With respect to position number one, he pointed out that holding that the expiration of three years from identifying the infringer would bar the holder from any possibility of enforcing its rights, also in the future, when the infringement was ongoing, could not be reconciled with the essence and aim of Regulation 2100/94. Thus, he argued, position number two appeared to be the most reasonable and also furthered the objectives of the regulation.
The Court of Justice holding
Considering this legal issue, the Court of Justice observed that commencement of running of the limitations period depends on one hand on an objective event, that is the final grant of a Community plant variety right, and on the other hand on a subjective event, that is when the holder learned of the infringement and the infringer’s identity. The court held that the three-year limitations period provided for by Art. 96 of Regulation 2100/94 begins to run not from the time when the infringement under which the claims were asserted ceased, but from the date when the holder learned of the infringement and the identity of the infringer. The court also found that the provision defining the limitations period does not contain any reference to notions of the temporal dimension or continuity of the infringement.
The further issues raised in the request for a preliminary ruling boiled down to determining whether under Art. 96 of Regulation 2100/94, all claims involving the totality of acts constituting infringement of the protected variety asserted more than three years after learning of the infringement are time-barred, or only claims concerning acts taken more than three years before asserting the claims. On these issues, the Court of Justice pursued a complex and sometimes confusing analysis.
The court pointed out that the limitations period runs separately for each act corresponding to an act of infringement, regardless of whether it is repeated, ongoing, or forms part of a set of acts. The infringing acts are those specified in Art. 13(2) of Regulation 2100/94, taken in respect of variety constituents, or harvested material of the protected variety, that is:
- Production or reproduction (multiplication);
- Conditioning for the purpose of propagation;
- Offering for sale;
- Selling or other marketing;
- Exporting from the EU;
- Importing to the EU; and
- Stocking for any of these purposes.
The court held that for finding whether the claims became time-barred, ‘it is the date at which the holder of the Community plant variety right had knowledge of an individual act of infringement and of the identity of the party liable which is conclusive’. The national court was thus required to determine whether the holder learned of each individual act constituting an infringement more than three years before filing the action for compensation.
It appears that, following the reasoning of the advocate general, the Court of Justice rejected an interpretation of Art. 96 of Regulation 2100/94 which would result in barring the holder’s claims in their entirety, because that would conflict with the objective of the regulation. The court took the view that rules on prescription can apply only to acts that have occurred, and not acts that could occur in the future.
The court stated that the expiration of three years from the time of learning of the first infringement cannot prevent the holder from pursuing rights under a protected plant variety with respect to all acts constituting an infringement of the right – including those as to which the three-year prescription period has not yet run. The court seemed to say that the holder cannot be entirely deprived of protection with respect to infringing acts taken after the end of the prescription period.
The court concluded that Art. 96 of Regulation 2100/94 should be interpreted to mean that only claims concerning acts falling within an ongoing infringement, asserted more than three years after the holder had knowledge of each act and the identity of the perpetrator, should be time-barred.
Trees keep growing
Unfortunately, the court did not clearly address the situation in which a state of infringement began more than three years before assertion of the claims but is still continuing – in particular, when mandarin trees of the protected variety planted by the infringer without a licence continue to grow.
On one hand, it seems that the Court of Justice judgment may be understood to mean that due to the expiration of three years after identifying the infringer, the holder will not be able to enjoin the infringer from continuing to propagate the plant variety, but could still enjoin the infringer from, for example, selling or exporting the variety from the EU, if these acts were taken later and have not yet become time-barred.
On the other hand, the court appeared to accept an interpretation of Art. 96 of Regulation 2100/94 which, in a situation where the infringement is continuing, permits only claims ‘over three years old’ to become time-barred, but does not exclude the possibility of raising claims for the period of the next three years. This is how the court’s reasoning can be understood with respect to the limitation on claims as to the ‘initial act’ and the impossibility of depriving the holder of protection (par. 51–54 of the judgment). The court also refers jointly, at certain places in the judgment, to claims under Art. 94 and 95 of the regulation, while at other places expressly referring to compensation, which may suggest that the court would admit a sequence of claims for damages as long as the infringement continues.
Unfortunately, the reasoning in the judgment lacks coherence, and the terms used in the judgment are far from unequivocal.
The position of the Supreme Court of Poland
A few months earlier, the Supreme Court of Poland considered how to calculate the running of the limitations period in cases involving the protection of EU trademarks, based on national regulations on limitation of claims for protection of industrial property rights. On 18 May 2021, a seven-judge panel of the Supreme Court issued a resolution (case no. III CZP 30/20) holding that if the infringement of an EU trademark is repetitive and is ongoing at the time the claim for non-monetary relief is asserted, including a claim to enjoin the infringement, then the five-year limitations period under Art. 289(1) in connection with Art. 298 of the Industrial Property Law of 30 June 2000 runs from each day in which the infringement occurred.
Like the Court of Justice, the Supreme Court of Poland entirely rejected the view that the running of the limitations period should be counted from the time when the state of infringement ceases. The court found that such an interpretation would unduly favour holders of industrial property rights and also conflict with the principle of certainty of commercial dealings. In the court’s view, it would be warranted to adopt a position treating a state of infringement lasting over some time as a sequence of separate infringements repeated on each successive day, regardless of what the infringement consisted of. The court found that each form of trademark infringement comprises one repetitive act of trademark infringement. In the court’s view, adoption of this approach allows for balancing of the interests of the holder and the infringer. On one hand it protects the infringer from the risk of excessive compensation, and on the other hand prevents the legalisation of ongoing acts infringing a trademark after the passage of a certain time.
It should be cautioned, however, that the interpretation by the Supreme Court of Poland involved the five-year period commencing not from the time when the infringer’s identity became known, but from the date when the infringement occurred. In the case of claims to a Community plant variety, this period is much longer, at 30 years. By contrast, in the Pardo case the Court of Justice examined how to calculate the three-year prescription period in a situation where the holder has knowledge of the infringer’s identity.
Importance of the Court of Justice ruling
The interpretation presented by the Court of Justice applies only to the issue of calculation of running of the prescription period in disputes over infringement of a Community plant variety, as the court addressed the prescription provision included directly in Regulation 2100/94. In other acts of EU law establishing protection of intellectual property rights, that is EU trademarks and Community designs, there are no provisions on the limitations period, and these issues are governed by national regulations or national jurisprudence. The holding in the Pardo case thus cannot directly influence the manner of calculating limitations periods under national intellectual property law. It should therefore be expected that in cases in Poland concerning protection of IP rights, the courts will apply the interpretation of Art. 289 of the Industrial Property Law adopted in 2021 by the seven-judge panel of the Supreme Court of Poland.