During the last few years the Yakima Valley Growers-Shippers Association has observed the plant patent and trademark enforcement activities of the Nursery Licensing Association, LLC (NLA). The NLA was formed by two lawyers, Pat Ballew and Rex Stratton. Ballew and Stratton are the managing members, also “equity members,” of the NLA. The other members of the NLA are various nurseries and/or breeder who have subscribed to membership in the organization and assigned enforcement rights to the NLA for their patents and/or trademark. When the NLA was formed, it also entered into an engagement letter with the law firm of Stratton Ballew PLLC, to serve as attorneys for the organization.
The stated goal of the NLA is to stop asserted infringement of plant patent and trademark rights that have been assigned to the NLA from various nurseries and breeders. Protecting valid patent and trademark rights is a commendable goal. It appears, however, that this commendable goal has been superseded by the NLA members’ and/or lawyers’ desire for money.
The managing members, who are also the principals of the law firm that represents the organization, are paid off the “top” before any money from recoveries or settlements are paid to the members of the organization. All decision-making authority of the organization is vested with the managing members. The relationship between the managing members and the attorneys for the company certainly creates the possibility of a motive for inappropriate enforcement, regardless of the potential damage that the enforcement actions may cause to our industry as a whole, or even to the nurseries that assigned their rights to the NLA.
The NLA has stated that it has developed a data collection system using federal crop insurance records, county assessor records, aerial photographs and real estate listings to determining the number and type of trees a grower may possess. This data is then compared to the sales database of the nurseries participating in the NLA to determine the number of allegedly infringing trees. This methodology sounds scientific and accurate, however, it is not. It has been reported that Zirkle Fruit Company debunked $1.5 million worth of the NLA’s claims by using paid invoices and cancelled checks from several nurseries that are members of the NLA. The NLA’s methodology constitutes a very questionable basis for asserting infringement when used as the sole legal justification for threatening tree fruit growers unless they pay at least $3 per allegedly infringing tree as “identified” by the NLA.
Given the magnitude of claims made by the NLA against growers, the NLA’s actions show an apparent lack of regard for due diligence and fairness to growers – the very customers of nursery businesses. The last thing the tree fruit industry needs at this time is the threat of lawsuits against growers, banks and others who deal with growers.
The NLA’s recent failure to attend the arbitration with Zirkle, as agreed to in the signed mediation settlement agreement, leads us to further question the real motives and intentions for the NLA. The agreement was signed by one of the managing members of the NLA, who is an attorney by profession and who now, according to www.goodfruit.com, indicates the parties did not understand the agreement and that the agreement is invalid and unenforceable. The matter will be eventually decided by the courts. It is not our intent to suggest who is right or wrong in this legal dispute. However, we do question how the industry can deal with the NLA in the future given the history of dealing with a signed settlement agreement.
In letters sent to growers, Ballew stated that “the NLA was formed by the nursery and plant breeding industries to promote ethics in agriculture and to help strengthen agriculture by reducing the infringement of plant patents and trademarks.”
We question whether, to date, the ethical goals of the NLA have been achieved either in whole or in part.
For many years, the nursery industry tolerated and even condoned apparent infringement. Fairness would seem to require that amnesty and/or prospective application of rules be applied when the decision was made to strictly enforce the claimed patent and/or trademarks. Attempts to discuss some type of fair approach have been to no avail with the NLA.
With these factors in mind, the Yakima Valley Growers-Shippers Association will pursue actions to minimized damage to the tree fruit industry caused by questionable enforcement actions by the NLA that disregards due diligence and seeks financial gain over the rights of individual patent and trademark holders of tree fruit varieties. The global tree fruit industry is far too competitive to have our growers, packers, retailers and lenders burdened with the cost of ongoing threats of litigation based upon speculative data and potentially invalid patents and trademarks.
The Yakima Valley Growers-Shippers Association firmly believes in the rights of plant breeders to protect their investments through legally enforceable plant patents and trademarks to ensure that new and innovative tree fruit varieties are introduced to our marketplace. However, the continued influx of varietal strains that offer little in the way of distinctness and have questionable stability, coupled with possible overzealous enforcement of their patents by the NLA, are creating a severe economic burden on our industry. With these factors in mind, the Yakima Valley Growers-Shippers Association feels that proactive measures are necessary to limit the costs of excessive litigation to the Washington state tree fruit industry.
If you think you have been unfairly accused by the NLA of infringement or if you have any information that might assist us in connection with our efforts, please contact us at our address shown below.
