At universities across the country,
plant breeders are working to develop new varieties that not only
improve a grower’s productivity but also help ensure the continuation
of the breeding program.
Recently, Michigan State University (MSU) professor Jim Hancock and
a team of plant researchers released three new blueberry varieties:
Draper, Liberty and Aurora. Two companies – one in Oregon and
one in South America – have purchased the exclusive license
to these three plants. The one in South America purchased the license
to produce the plant for South America, and the one in Oregon will
produce for growers west of the Mississippi River.
“All of our license agreements require an upfront payment and
a running royalty as part of a minimum royalty per year,” said
Loraine Hudson, director of the Office of Intellectual Property at
MSU. “Then, across all the agreements, we have a charge per
micro-shoot (used in plant propogation). The common elements between
these agreements is $1 per micro shoot to purchase them from the university.”
Hudson said that the higher of the two licensing agreements for the
blueberry plants involved an up-front payment of $30,000 and a running
royalty minimum of $2,500. The running royalty is the money that is
brought in from the sale of each plant.
MSU is currently in the process of negotiating with a consortium of
Michigan blueberry industry representatives to sell the license for
east of the Mississippi River.
Licensing
and commodity contributions
For these blueberry plants,
and all patented items coming out of MSU, the university will issue
a request for proposals, and companies will submit competitive bids
for the license of the product. The company whose bid is accepted
is granted either exclusive or non-exclusive rights as drafted in
the contract.
“We try to strike a balance between a number of factors: the
local economic development from the money that will flow to the university
in the licenses as well as to the inventors themselves,” Hudson
said. “We try to strike a balance to make sure we come to a
result that will balance out all these factors.”
Hudson said that, even though two of the licenses were granted to
out-of-state companies, MSU always made sure Michigan growers would
have access to the blueberry plants.
“It is our intent to provide access to the plants by the growers,”
she said. “It is very important to us that growers have access
to these plants.”
Money from Michigan commodity groups, such as the Michigan Blueberry
Growers Association (MBG), provides money to the agricultural research
conducted at MSU. But, Ian Gray, Michigan Agricultural Experiment
Station director, said that there is no contract with MBG, and no
MBG funds were used directly for this blueberry project.
“The blueberry growers support research at MSU, but how much
exactly went into this project, I don’t know,” Gray said.
“A lot more of it (money) goes into disease and insect research
than into the actual breeding program.
“The process on the release of the blueberry varieties was an
open competitor process. Licenses were awarded, just not to some local
competitors.”
MBG declined to comment for this story.
“Intellectual property rights and who owns the research is always
a question whenever you fund a project,” said Phil Korson, president
of the Cherry Marketing Institute. “When you fund research,
you’re not necessarily funding with the expectation that a discovery
will be made. When a discovery is made, the question for us in commodity
groups in general, but cherries specifically, we want to develop an
agreement with MSU as to how those discoveries will be handled.”
Korson, and other agricultural commodity group representatives, has
been working to develop a master agreement with MSU that would outline
the process for dealing with intellectual property right issues.
“Sometimes you have a discovery that will be a revenue source
for the university and a big impact on the industry. And those two
can collide. Our biggest priority is to resolve them before they collide,”
Korson said. “We want to be sure the interests of the growers
aren’t lost in the process. It’s critical these documents
be drafted up front.”
In the end, Hudson said – and Korson agreed – the intellectual
property rights belong to the university, and therefore, that office
has the final say. However, Gray said that he is working on an agreement
so the growers will have some kind of advisory role or communicating
role in the release of plants.
“There is a lot of research going on that is not funded by commodities,”
Gray said. “The situation that comes up is: when does the saying
of the growers come into play? What are truly the expectations of
the industry relative to intellectual property?”
In the end, though, Gray said he is certain Michigan growers will
have access to the plants.
“Our whole success is predicated on close ties with the industry,”
he said. “It would be foolhardy to deny access to the folks
who are our bread and butter people. That was never the case. The
results of intellectual property will find its way back to growers
down the road.”
A similar
story
Korson said that
he knows the situation at MSU is not unique.
“We need to work with all of our land grant partners in developing
intellectual property and licensing it for the good of U.S. agriculture,”
he said.
Tom Kelly, the finance/budget manager for the Agricultural Research
Center at Washington State University (WSU), said that they have similar
concerns to MSU.
“What we try to do is work with those who have funded the research
to make sure we’ve addressed those concerns to be sure they
can share in the benefit of the licensing,” Kelly said.
Kelly said that the money they receive in their licensing agreements
is, in turn returned to the research program.
“By providing funds from the licensing, that is in a way helping
supplant as well as provide additional funding that the commodity
commissions would normally use to support that research,” he
said.
As a plant breeder with Cornell University, Professor Courtney Weber
said he also has to be concerned about bringing in funding for his
research through the licensing agreements.
“In the end, we are pressured more and more to bring in more
of our own revenue and rely less and less on state and federal governments.
Royalties are one way to do that,” Weber said. Some of Weber’s
funding for his research comes from a variety of different grower
groups.
In fact, for the small fruits at Cornell, they do not issue exclusive
licenses within the United States. For the strawberry Jewel, Weber
said, 25 or 30 different nurseries have a license.
“Our goal is to reach as many people as possible while maximizing
funds for research that we can use for our programs,” he said.
Cornell does sell exclusive licenses outside of the United States
because it is easier from a management perspective.
Kelly said that at WSU, more important than the funding they receive
from the licensing is the prospect of preserving a market outside
of the country.
“We certainly don’t want to set up a licensing agreement
to hinder our marketing from this country,” Kelly said. “That
would be a concern for the future when we start licensing our products
overseas.”
All of the universities and researchers expressed the sentiment that
the field of intellectual property rights is still new and there is
still a lot to learn.
“As we got through this process, I think we’re going to
learn as we go along,” Gray said.
