Challenge to the Scope of CPVO Discretion Misconceived and Overly Formalistic (Potentially)

A Gala Schnitzer

What Olympics? What Neurim decision? Aren't people aware that Advocate General Mazák's Opinion on Community plant variety issues in Case C-534/10 P Brookfield New Zealand Ltd and Elatris SNC v Community Plant Variety Office and Schniga GmbH was released last week? Probably not, as Community plant variety issues rarely make it to the European Court of Justice (approximately every two years) and so it is with baited breath that many (ahem) await the decision of the Court later this year on the scope of discretion conferred upon the Community Plant Variety Office (CPVO) to allow the submission of new plant material for technical examination. The judgment is likely to clarify the procedural requirements necessary for technical examinations in Community plant variety right applications. 

The Facts

All the way back in 1999 KSB, predecessor in title of the applicant (Schniga), filed an application for a Community plant variety right for the apple variety Gala Schnitzer ('schnitzer' may mean, among other things, blunder, howler, goof, blooper and booboo according to Google translate). KSB were informed in May that year that the material necessary for an examination had arrived in time, that it was appropriate and that a European plant passport,

A Gala Galaxy, which is not as cool as the Schnitzer

received after a second request by the CPVO, was sufficient as a phytosanitary certificate for the determination of a Community plant variety right. However, the further request for an official certificate confirming the material was sent virus-free could not be provided, as it later emerged that the material sent for the technical examination was infected by latent viruses. The CPVO did not consider KSB to be liable for the situation and that it would be unfair to refuse the application because the instructions on the submission of material had not specified that it had to be virus-free and was not, therefore, sufficiently clear and precise. The German Office concluded, upon an examination of new virus-free material accompanied by a phytosanitary certificate, that the Gala Schnitzer was distinct from the closest reference variety, the Baigent variety, on the basis of the additional characteristic "Fruit: width of stripes".

The Contested Decision

Some Baigant variety

A few years later, Elaris SNC and Brookfield New Zealand Ltd (the interveners), licensee and holder respectively of the plant variety right relating to the Baigant reference variety, lodged objections to
the grant of a right for the Gala Schnitzer variety on the grounds, inter alia, that the applicant had failed to comply with the requirements for submitting material for the technical examination. Despite this, the committee responsible for deciding on objections dismissed the objections and granted a right for the Gala Schnitzer. Following an appeal filed by the interveners, the Board of Appeal of the CPVO annulled the committee's decisions including the grant of the right for the Gala Schnitzer. It found that KSB had not complied with the request of the CPVO to provide a phytosanitary certificate confirming that the material submitted was virus-free within the meaning of Article 55(4), Regulation (EC) No 2100/94 and that Article 61(1)(b) did not allow the CPVO to authorise KSB to submit new material.

The Judgment Under An(Apple)Peel

In 2008, Schniga (KSB) brought an action for annulment of the Board of Appeal Decision before the General Court. Overall the Court held that the Board of Appeal had misconstrued the scope of the discretion conferred on the CPVO by Article 55(4); the discretion conferred under that Article included the right for the CPVO, should it deem it necessary in a particular case, to define pre-conditions for the examination of an application for a CPVR, provided that the period had not expired within which the applicant must respond to a request; it was consistent with the principle of sound administration and with the need to ensure the proper conduct and effectiveness of proceedings that, when the CPVO finds that the lack of precision which it has noted may be corrected, it has the power to continue with the examination of the application filed with it. Furthermore, the discretion conferred on the CPVO enables it to satisfy itself that the requests which it makes in individual cases are clear and that applicants know their rights and obligations without ambiguity. The action was upheld and the contested decision of the Board of Appeal annulled.

Most cats prefer the Catshead variety

The Current Proceedings and the AG's Opinion

Elaris SNC and Brookfield New Zealand Ltd now appeal the decision of the General Court on two grounds: first, the General Court exceeded its jurisdiction as defined in Article 73(2) by reviewing findings of fact by the Board of Appeal. The scope of review is limited to issues of law and of misuse of power; and secondly, the General Court itself misconstrued the scope of the discretion conferred upon the CPVO. Individual requests within the meaning of Article 55(4) may only concern the material itself and not the quality of that material such as the submission of a health certificate. Also, in light of Article 61(1)(b), the CPVO does not have the power to allow a new submission of virus-free material once the time-limit for the submission of material has elapsed and it was clear that the material initially submitted was not virus-free. Such authorisation could only follow from a restitutio in itegrum, as provided under Article 80. Further, the General Court erred in assuming that the CPVO had full discretionary power to satisfy itself as to the legal precision and clarity of its requests in individual cases.

Advocate General Mazák considered that the appeal should be dismissed in its entirety. The first ground appeared to be based on a misconception of the jurisdiction conferred on the General Court and should be rejected as unfounded. Unlike the jurisdiction of the Court of Justice in an appeal, the General Court can carry out a full review of the legality of the decisions of the Boards of Appeal, and if necessary examine whether those boards have made a correct legal classification of the facts or whether their assessment of the facts submitted to them was flawed. This conclusion was based on Case C-38/09 P Schräder v CPVO [2010] ECR I-03209 and on the purposeful amendment made to Article 73, Reg. No. 2100/94 by Reg. No 2505/95 in order to align the appeal procedures under the Community plant variety rights regime with the arrangements for the review by the General Court of the legality of the decisions of the Boards of Appeal of the Office for Harmonisation in the Internal Market (OHIM) provided under Article 63(2), Reg. No. 40/94 on the Community trade mark.

The second ground alleging infringement of Article 55(4) should also be rejected as unfounded. AG Mazák noted, inter alia, that the wording of Article 55 and provision for the CPVO to consent to non-compliance under Article 61(1)(b) implied that the discretion conferred on the CPVO be interpreted broadly. A certain measure of discretion must be accorded to the CPVO in order to carry out complex scientific and technical assessments. He noted by way of analogy the broad discretion of the OHIM to take account of facts and evidence which are submitted or produced late per Case C-29/05 P OHIM v Kaul [2007] ECR I-2213. As such, the General Court was correct to hold that the scope of the discretion 'includes the right for the CPVO, should it deem it necessary, to define the pre-conditions for the examination of an application for a Community plant variety right, provided that the period has not expired within which the applicant must respond to the request made to it in the individual case' (at [47]). Such a finding was consistent with the principle of sound administration and with the need to ensure the proper conduct and effectiveness of proceedings that, when the CPVO finds that the lack of precision which it has noted may be corrected, it has the power to continue with the examination of the application filed with it and is not required, in those circumstances, to refuse the application. As regards the allegation of infringement of Article 80, KSB did not actually file any application for restatement pursuant to that provision and the condition laid down concerning non-observance of a time-limit was never met in light of the lack of clarity regarding the deadline for submission of the plant material. The CPVO had the power to authorise the submission of new material in the same application procedure without rejecting the original application, and so it was not necessary to restore the right to submit plant material on the basis of Article 80.

Generally, the rationale underlying the Opinion appears to be that the CPVO should have the same scope of discretion as the OHIM. This is sound in this Kat's humble opinion. The grounds for the appeal are a good example of legal technicalities getting in the way of substantive rights. AG Mazák seems to have thought the same: he noted that the appellants' argument that requests for material only related to the material itself and not the documentary evidence as to its quality was overly formalistic and would run counter to the broad discretion conferred by Article 55(4). However, it's always good to get a judgment that may potentially tie up these annoying arguments - assuming, that is, that the Court of Justice will follow the Advocate General's Opinion later this year.   

The WTO is looking into phytosanitary measures as part of it's 2012 Report into non-tariff measures, if that lights anyone's fire.

Issue 3 of the CPVO's Newsletter, that contains some nice photos of tulips, oranges, corn on the cob and potatoes (but no cats), can be read here. The CPVO also has a case law database concerning all issues Plant Variety of its very own.