A.1. CASE

Assume that your country has accepted GM food: the company CaMon is marketing seeds of a tomato plant that looks fresh on the shelf for longer than others. This feature of the tomato has been patented. Paul, a farmer of vegetables and legumes, is looking for better marketing opportunities. He heard about this plant and hopes to win more customers by expanding his distribution system. It seems that the new tomato plant has the potential to be a building block for his new strategy. He buys the seed – enough to plant 100 acres. However, the delivery of the seed is accompanied by a licence contract that obliges him to sell the whole harvest to a big food processing company (FPC), located 700 km away. Any violation will give rise to contractual penalties.

Paul ignores the licence and sells the harvested tomatoes to regional customers. In September, he receives a letter from CaMon reminding him only to sell to FPC and announcing a lawsuit. Since Paul pursues his own marketing strategies, they meet in court one year later.

Is CaMon entitled to contractual penalties?

A.2. COUNTRY REPORTS

(1) BELGIUM

I. Operative Rules

In case of breach of contract, CaMon would, in theory, be entitled to the agreed contractual penalties. However, some difficulties arise in this case.

We may ask whether Paul can be deemed to have consented to the licence contract. If not, the contract is not valid.

The contract clause containing the penalties might be invalid. Real penalty clauses, with the objective of private punishment instead of compensation for potential damages, are invalid.

The penalty clause could be invalid from a competition law perspective. Although the validity of the contract depends on the detailed circumstances, it seems probable in the present case that CaMon would not be entitled to the contractual penalties.

II. Descriptive Formants

• – Article 16 Regulation (EC) No. 2100/94 on Community plant variety rights;

• – Article 10 Biotechnology Directive 98/44/EC;

• – Article 27quater BPA (Art. XI.32 BCEL);

• – Article 21 Belgian Plant Variety Protection Act (the Belgian Plant Variety Protection Act of 1975 was replaced by the Plant Variety Protection Act on 10 January 2011, the latter implementing the UPOV Convention of 19 March 1991.