‘New avenue of justice’: How much can new China IP protection policies aid Zespri’s quest against unlicensed kiwifruits?
Zespri recently revealed that it was bringing another lawsuit to China’s Intellectual Property Court in Nanjing against two individuals that the firm has claimed to be cultivating, selling and marketing its SunGold Gold3 kiwifruit illegally.
The golden kiwifruit is viewed as a much more premium variant than regular green kiwifruit, and New Zealand farmers pay significant amounts, up to NZ$800,000 per hectare, to Zespri for a growing licence.
Zespri first lost control of SunGold in 2016 when Chinese planter Haoyu Gao smuggled SunGold cuttings from New Zealand to China, and has been struggling to regain control over this variant ever since.
“This civil case is an important step for Zespri to protect the investment interests of New Zealand producers in licensed kiwifruit varieties, as well as the rights and interests of our Chinese partners and consumers,” Zespri CEO Dan Mathieson told company stakeholders across both China and New Zealand via a formal internal statement, which FoodNavigator-Asia has viewed.
“This has been greatly benefitted by the Chinese government’s focus on horticulture and the importance of IP rights in this field - helping to support ongoing investment and innovation and the rights of innovators.
“The government strengthened local laws and regulations relating to IP protection in 2022 such as with amendments to its Seed Act, [and this] has allowed us to take legal action against not only unauthorised golden kiwifruit growers but also those who attempt to sell them – [It is a] new avenue of justice.”
Zespri previously sued Gao for NZ$15mn/US$9.1mn (later reduced to NZ$12mn/US$7.3mn) in 2020. Gao was found guilty under the Plant Varieties Rights Act for illegally bringing the cuttings in for sale – but this is the first case Zespri has made that includes sales and marketing charges.
The Nanjing Intellectual Property Court will hear this new case in September 2023.
Too little too late?
Despite the ray of light these new regulations bring to Zespri’s quest, the company faces immense pressure to resolve this matter from investors and growers given the large sum of money being poured into the cultivation of SunGold in New Zealand – and even if the new defendants are eventually found guilty and fined, there is little to suggest that this will actually stop the illegal cultivation of golden kiwifruit outside of the country.
Zespri data has already estimated there to be more golden kiwifruit being cultivated in China than in New Zealand, and the number has been steadily increasing since it entered the country in 2016.
As of 2023 this is estimated at over 7,850 hectares of fruit, significantly more than 5,400 hectares in 2021 and about 2,700 hectares the year before that.
There is about 9,000 hectares of legal golden kiwifruit planted in New Zealand by licensed, paying growers.
“The revised Seed Law does expand the scope of IP protection for novel plant varieties, covering not only the breeding aspects but also the cultivars and the entire process from cultivation to propagation and sales,” Beijing Law Strategy Firm lawyer Xiao Huang stated via an email statement.
“This is meant to promise better protection when it comes to sales, storage, marketing, imports, exports, and overall trade [but it will be a time-consuming and painstaking process if the aim is to uproot an existing market.”
Given the rapid rate at which local golden kiwifruit is being cultivated and sold, Zespri is unlikely to be able to solely utilise the judicial route to stop the growth of this market, even if it may give growers some satisfaction at this stage.
However, Zespri growers have already ruled out one likely solution, which would be for Zespri to establish its own golden kiwifruit strategy in China and work with instead of against existing unauthorised golden kiwifruit growers there. This proposal was voted down back in 2021.
