Opinion ID: 211139
Heading Depth: 2
Heading Rank: 2

Heading: PVPA Claims

Text: The PVPA provides patent protection to breeders of certain plant varieties, who may acquire the right . . . to exclude others from selling the variety, or offering it for sale, or reproducing it, or importing it, or exporting it, or using it in producing . . . a hybrid or different variety therefrom for a period of twenty years. 7 U.S.C. § 2483(a)(1), (b). The PVPA provides a cause of action for infringement against any person who, inter alia, undertakes to sell or market the protected variety, multiply or propagate it for growing purposes, or dispense the variety to another, in a form which can be propagated, without notice as to being a protected variety under which it was received. 7 U.S.C. § 2541(a). According to the trial court's order, the jury issued a verdict of infringement under 7 U.S.C. § 2541(a)(6), which provides that it shall be an infringement of the PVPA to dispense the [protected] variety to another, in a form which can be propagated, without notice as to being a protected variety under which it was received. The trial court appears to have read § 2541(a)(6) as a strict-liability provision, such that any dispensation of protected seed without notice to the recipient that it is protected constitutes infringement. See Order at 3 (Concerning the PVPA, the jury found that Delta Cotton sold Syngenta's protected wheat . . . to another, in a form which could be propagated, without notice as to it being a protected variety, in violation of 7 U.S.C. § 2541(A)(6).); see also Transcript at 222 (judge instructing counsel that I'm going to tell the jury that it's unimportant what the co-op knew . . . . What's important is whether what was sacked up was Coker 9663, unmarked, in propagatable form.); Transcript at 05-1507 7 179 (judge stating that what Delta Cotton knew and what farmers told them is not relevant to infringement); Transcript at 357 (judge informing counsel that plaintiff need not show that Delta Cotton had knowledge that [the seed] was Coker . . . . It doesn't matter under 2541 what Delta Cotton knew. What matters is whether this was Coker's seeds.). The trial court erred in its construction and application of the statute. By its terms, (a)(6) has four components: (1) dispensation of a protected variety, (2) in a propagatable form, (3) without the notice that it is a protected variety, and (4) under which it was received by the dispenser. The trial court appears to have construed (a)(6) to include only the first three elements. This court, however, has construed the fourth component of (a)(6) to permit a finding of infringement only if the dispenser—here, Delta—had notice that the seed it dispensed was a protected variety, either because it received the seed in marked form or because it had independent knowledge of the seed's protected status. Delta & Pine Land Co. v. Sinkers Corp., 177 F.3d 1343, 1355 (Fed. Cir. 1999). Because § 2541(a)(6) imposes liability only if a protected variety is dispensed without notice, by definition, the dispenser of the seed must have had notice that it received a protected variety. In addition, before liability attaches, this language also requires that the dispenser have failed to provide notice to the recipient of the dispensed seed that the seed was a protected variety. The trial court's construction of the provision erroneously omits a necessary element of an infringement claim under § 2541(a)(6): that the accused infringer had notice that the seed it was dispensing was PVPA protected. Because the trial court did not require Syngenta Seeds to prove that Delta both had notice and failed to provide 05-1507 8 this notice to the recipient of the dispensed seeds, the evidence before the jury was insufficient as a matter of law to sustain a finding of infringement.
Section 2567 of the PVPA provides that an owner of a protected variety cannot recover damages for infringement if the variety is distributed by authorization of the owner and is received by the infringer without a label containing the words Unauthorized Propagation Prohibited or Unauthorized Seed Multiplication Limited, unless the infringer has actual notice or knowledge that propagation is prohibited or that the variety is a protected variety. 7 U.S.C. § 2567. Delta Cotton argues that because it received the Coker 9663 seeds without notice of their protected status, it is protected against a damage award for infringement by § 2567. The trial court erred, according to Delta Cotton, by systematically excluding all evidence of Delta Cotton's knowledge or lack of knowledge from trial. Syngenta Seeds, in turn, argues that we lack jurisdiction over this portion of Delta Cotton's argument, because Delta Cotton failed to raise its § 2567 argument until its post-verdict motion for judgment as a matter of law, and thus waived it. Section 2567 is the PVPA analogue to § 287 of the Patent Act, which provides: Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them . . . may give notice to the public that the same is patented, either by fixing thereon the word patent or the abbreviation pat., together with the number of the patent. . . . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. 05-1507 9 35 U.S.C. § 287(a). This court has held that, in order to recover damages for patent infringement, a patentee bears the burden of pleading and proving either actual or constructive notice that the article is patented. Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996). Although it appears that the federal courts have never addressed this issue with respect to the PVPA's § 2567, its similarity to the Patent Act's damage limitation provision leads us to conclude that a party seeking to recover damages for PVPA infringement must allege and prove the marking or actual notice requirements of § 2567. Where the alleged infringer received the protected seed without the statutory label, the plaintiff has the burden to prove and demonstrate actual notice or knowledge that propagation is prohibited or that the seed is a protected variety.2 We therefore conclude that Delta Cotton did not waive its arguments based upon the knowledge requirements of § 2567, because Delta Cotton did not bear the burden of establishing the element of knowledge at trial. The statute provides, rather, that in order to recover damages under § 2541(a)(6) the plaintiff—here, Syngenta Seeds—must demonstrate both that the defendant infringed and that its infringement occurred with 2 We note, in this connection, that the limitation on damages provided in PVPA is potentially broader than the similar limitation in the Patent Act. In the patent context, where a patent is sold as a commercial product, an alleged infringer is deemed to have constructive notice of the patent protection when the patentee consistently mark[s] substantially all of its patented products with the statutory label. Sentry Prot. Prods., Inc. v. Eagle Mfg. Co., 400 F.3d 910, 918 (Fed. Cir. 2005) (internal quotation omitted). It stands to reason that if Acme Co. marks 99% of its widgets with their patent number, a downstream infringer should know that the widgets are patent protected. A seed producer, by contrast, cannot label his individual seeds, but only the container in which they are shipped. It is comparatively simple for an unscrupulous user to remove the seeds from their original container and reintroduce them into the stream of commerce, effectively immunizing all subsequent purchasers from PVPA infringement damages. 05-1507 10 actual notice or knowledge that the seed was protected by the PVPA. The question of Delta Cotton's notice or knowledge, therefore, was not a matter to be pled by Delta Cotton as an affirmative defense, but a necessary burden required to be proved by Syngenta in order to establish its damages. Delta's argument relating to § 2567 is an argument based upon the insufficiency of the evidence presented at trial. Delta properly preserved such arguments, and this court therefore has jurisdiction over Delta's § 2567 claim. Exercising that jurisdiction, we conclude that the trial court's failure to require Syngenta to plead and prove its damages claim was erroneous as a matter of law.