Transcript Intellectual Property Protection:

Symposium: Process for IP
Management, Cultivar Release, and
Licensing
Gulf Coast Research and Education Center, Balm, Florida
August 6, 2012
John C. Beuttenmuller
Executive Director
Florida Foundation Seed Producers, Inc.
Discussion Topics

How the Process Works:
◦
◦
◦
◦
◦

Cultivar Development
Cultivar Release
Intellectual Property Protection
Licensing
Royalty Distribution
Results of 2012 Peer Survey
Bayh-Dole Act (35 U.S.C. § 200-212)

Act sponsored by:
◦ Senators Birch Bayh (Indiana), Bob Dole
(Kansas)
Enacted by U.S. Congress in 1980
 Allowed U.S. universities and other
recipients of federal research funds to
own, license, and manage intellectual
property created through federally funded
research

Bayh-Dole Act (35 U.S.C. § 200-212)
"Unless private industry has the
protection of some exclusive use under
patent or license agreements, they cannot
afford the risk of commercialization
expenditures. As a result, many new
developments resulting from government
research are left idle."
- Senator Birch Bayh
Introductory Statement, September 13, 1978
Bayh-Dole Act (35 U.S.C. § 200-212)

Prior to 1980, only 250 patents had been
issued to U.S. universities
“Bill designed to promote signed to promote the utilization and
commercialization of inventions made with government support ...
Ultimately, it is believed that these improvements in government
patent policy will lead to greater productivity in the United States,
provide new jobs for our citizens, create new economic growth,
foster increased competition, make government research and
development contracting more competitive, and stimulate a greater
return on the billions of dollars spent each year by the
Government on its research and development programs.”
- Senate Judiciary Committee Report on S. 414, unanimously
approved and reported to the Senate, December 12, 1979
University of Florida:
Intellectual Property Policy

Research
personnel
conducted
by
University
◦ Patentable inventions and other marketable
forms of intellectual property result

Obligation to serve the public interest by
insuring that intellectual property is
appropriately developed
University of Florida:
Intellectual Property Policy
Encourage and enable technology
development and transfer for benefit of
the public
 Encourage the creation of technology by
providing incentive to inventors
 Fund further research at the University

University of Florida:
Intellectual Property Policy

Inventions of germplasm and cultivars in
which the University asserts its interests
(other than those protected by utility
patents) are assigned to Florida
Foundation Seed Producers, Inc. (“FFSP”)
◦ FFSP is a Florida non-profit corporation and
direct support organization (DSO) of the
University of Florida
University of Florida:
Intellectual Property Policy

All other inventions (mainly protected
under U.S. utility patents) in which the
University asserts its interests are assigned
to the University of Florida Research
Foundation, Inc. (“UFRF”) and managed by
the Office of Technology Transfer
◦ Similar to FFSP, UFRF is a Florida non-profit
corporation and direct support organization
of the University of Florida
University of Florida:
Intellectual Property Policy
University of Florida
Plant Germplasm
and Cultivars
(Plant patents,
plant variety
protection
certificates PVP)
Florida Foundation
Seed Producers, Inc.
All Other University
Inventions (Utility
patents,
copyrights, etc.)
University of Florida
Research Foundation,
Inc. (UFRF)
UF/IFAS Plant Breeding Programs
DIVERSITY
26 Plant Breeding Scientists

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
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

Aglaonema
Alfalfa
Anthurium
Apple
Bahiagrass
Beans
Bermudagrass
Blueberry
Caladium
Centipedegrass
Citrus
Coleus
Corn
Cucurbits
Dieffenbachia
Floral











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
Forestry
Gerbera
Gladiolus
Grape
Lisianthus
Nectarine
Oats
Paspalum
Peach
Peanut
Plum
Pumpkin
Red Clover
Rye
Ryegrass
Sorghum
Wide Array of Different Crops

Soybean

St. Augustinegrass

Strawberry

Tomato

Triticale

Tropical Fruit

Wheat

White Clover

Zoysiagrass
Plant Breeding Process

Various methods uses to develop new
plant germplasm
◦
◦
◦
◦
◦
Mass selection (e.g. annual ryegrass)
Hybridization (e.g. tomato)
Backcrossing (e.g. peanut)
Mutagenesis (e.g. aglaonema)
Somaclonal variation (e.g. sweet orange)
Plant Breeding Process

Through several generations of selection,
the breeder identifies genotypes within
populations that have improved
characteristics such as:
◦
◦
◦
◦
Disease resistance
Yield
Flavor, color, habit
Time of maturity
UF/IFAS Cultivar Release Process

General Guidelines
 New cultivar shall have potential to make a
significant contribution to Florida agriculture
and/or the general public.
 i.e. - increased yield potential, disease resistance,
extend market window
 Do advantages over existing cultivars
outweigh disadvantages?
 Are growers likely to use the new cultivar?
UF/IFAS Cultivar Release Process
Novel plant variety developed by UF/IFAS
plant breeder
Plant breeder notifies Department Chair
Department Chair convenes Cultivar
Release Advisory Committee (CRAC)
1.
2.
3.
a.
b.
c.
4.
Evaluate proposed release in regards to its intended
purpose(s)
Provide scientific scrutiny of data, etc.
Recommend form of IP protection (plant patent,
utility patent, PVP, public release)
CRAC makes recommendation to the
UF/IFAS Cultivar Release Committee (CRC)
UF/IFAS Cultivar Release Process
IFAS Cultivar Release Committee (CRC)
reviews CRAC recommendation and
considers the cultivar for release
6. CRC votes in favor of release
7. Director of FAES approves release
8. Intellectual property protection filed
9. Licensed through Florida Foundation Seed
Producers, Inc.
5.
◦ Exclusively – ITN Process – or –
◦ Non-exclusively
Figure 1. FAES Cultivars Released
160
148
140
135
FAES Royalty
Distribution Policy
# of Cultivars Released
120
100
91
76
80
60
46
40
43
31
25
20
9
1
0
17
15
1
0
3
0
1
1
1
8
1
Time Period
18
80
71
Florida Foundation Seed
Producers, Inc. (FFSP)
1943 – Florida Crop Improvement
Association (FCIA) formed as an
agricultural cooperative (501(c) 5)
 1957 – FCIA became FFSP

Florida Foundation Seed
Producers, Inc. (FFSP)

Purpose:
◦ To annually provide to Florida producers of
crop seed and nursery stock, foundation seed
stocks of the best known varieties adaptable
to Florida climate and soils in adequate
quantities at reasonable prices
◦ To cooperate with the Agricultural
Experiment Stations, University of Florida, in
making available new varieties
Florida Foundation Seed
Producers, Inc. (FFSP)

1979
◦ FFSP becomes direct support organization
(DSO) of the University of Florida
 Non-profit corporation to utilize resources of the
University of Florida to conduct its business in
support of the University.
Intellectual Property
Protection for Plant Varieties

USA
◦ Plant patent
 Administered by United States Patent and
Trademark Office (USPTO)
 Granted to novel, distinct, and non-obvious plant
varieties which are asexually reproduced
 E.g. blueberry, strawberry, gerbera, vegetatively propagated
turfgrass
Intellectual Property
Protection for Plant Varieties

USA
◦ Plant Variety Protection Certificate (PVP)
 Administered by United States Department of
Agriculture (USDA)
 Granted to novel, distinct, uniform, and stable
varieties which are sexually reproduced
 E.g. peanut, oats, bahiagrass, wheat, tomato
Intellectual Property
Protection for Plant Varieties

USA
◦ Trademarks
 Administered by USPTO
 Don’t protect varieties – only marks used in
combination with certain goods or services to
identify such goods and services as unique and
distinguishable.
 E.g.:
Intellectual Property
Protection for Plant Varieties

USA
◦ Utility Patents
 Administered by USPTO
 Granted for a new and useful process, machine,
article of manufacture, or composition of matter, or
any new and useful improvement thereof.
 E.g.: High oleic peanuts and peanut products
Intellectual Property
Protection for Plant Varieties

International
◦ Plant Breeder’s Rights
 Each foreign country administers its own legislation
which provides PVP-like protection to new varieties
of plants
 International Union for the Protection of New
Varieties of Plants (UPOV)
 Established in 1961 to encourage the development of new
varieties of plants for the benefit of society
 70 signatory countries to the UPOV convention
Intellectual Property
Protection for Plant Varieties

International
◦ If international protections are not sought,
plant varieties become part of the public
domain in foreign territories
◦ A variety can be protected under U.S. plant
patent or PVP and licensed domestically, but
this protection only governs the use and
commercialization of such variety in the U.S.
Intellectual Property
Protection for Plant Varieties

International
◦ It is not cost effective to file plant breeders
rights in all territories – only file where there
is potential for commercialization of such
variety within the territory
◦ Through
international
protection
and
licensing, royalties can be returned to Florida
to support the continued development of
varieties in the State of Florida
FFSP’s Licensing Process

Mission
◦ Advance the mission of UF/IFAS and the
Florida Agricultural Experiment Station and
the plant breeding programs for the benefit of
the public
FFSP’s Licensing Process

Non-exclusive licensing
◦ Multiple
companies
(nurseries,
seed
companies, producers, etc.) offered license
agreements for production and sale

Exclusive licensing
◦ IFAS implemented Invitation to Negotiate
(ITN) process in 2006
◦ Scope of exclusivity – structure of industry
Invitation to Negotiate:
What is an ITN?
A public call for interested parties to
submit proposals for an exclusive license
of a new cultivar developed by UF/IFAS
 An opportunity for parties who have an
interest in a new cultivar developed by
UF/IFAS to comment and provide input
regarding the commercial licensing of a
new cultivar

Three Principles of the ITN
Process
1. What is good for ….
the State of Florida and its people?
2. What is good for…
the University of Florida - IFAS?
3. What is good for …
the breeder and the breeding program?
How are Proposals Evaluated?

Consistent methodology is used to
evaluate all proposals, in the following
primary areas:
◦
◦
◦
◦
◦
Marketing plans and goals
Production plans and goals
Financial considerations
Intellectual property protection
Prior experience with UF/IFAS/FFSP
ITN Review Committee

Members:
◦ FFSP Representatives:
 Executive Director
 Licensing Associate
◦ Lead Breeder
◦ Independent UF/IFAS Breeder
◦ Statewide Research Program Leader (when
applicable)

Committee makes recommendation to
Director of FAES
Who Benefits?

Industry
◦ All interested companies are considered fairly
and objectively
◦ The process provides an opportunity for industry
representatives such as trade groups/associations
to comment on the licensing of new IFAS
cultivars

Breeding Program
◦ Maximizes exposure of new cultivars developed
by IFAS breeding programs
◦ The process provides the breeder a means of
objectively
evaluating
commercial
license
proposals
Who Benefits?

UF/IFAS
◦ Proposals submitted help UF/IFAS and FFSP select a
commercial partner whose vision is consistent with
the goals of UF/IFAS for the new cultivar
◦ Comments submitted in response to the ITN help
UF/IFAS and FFSP select the right partner and allow
FFSP to negotiate the most appropriate license terms

State of Florida
◦ Stakeholders are assured that an exclusive
arrangement is granted to the commercial partner
that has been identified as having a vision consistent
with the best interests of the State of Florida and its
people, UF/IFAS and FFSP, and the breeding program
Royalty Distributions for Cultivars
and Germplasm (FFSP)
◦ Costs deducted prior to distribution (patent
and legal expenses, etc.)
 10% retained by FFSP
 20% personal incentive to inventors/cooperating
scientists
 70% to Cultivar Development Research Support
Program
Royalty Distributions for Cultivars
and Germplasm (FFSP)

Cultivar Development Research Support
(70%), calculated annually on a per cultivar
basis
 100% of first $50,000 goes to the breeding program
 Next $100,000 goes 50% to the breeding program, 25%
to the Unit, and 25% to the FAES
 All revenues above $150,000, 33% to the breeding
program, 33% to the Unit, and 33% to the FAES

Unit and FAES funds used for long-term
support and sustainability of UF/IFAS plant
breeding efforts
Royalty Distribution:
Sustainable Plant Breeding
Figure 2. FFSP Royalties
$4,500,000
$4,000,000
Gross Royalties
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$2000
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
Why License and Collect
Royalties?

Royalties have the potential to:
◦ Cover the costs of development, IP protection
◦ Continue plant breeding programs to ensure that
local industries remain competitive in an increasingly
global marketplace through the development of new
plant cultivars
 Success is dependent upon % of royalties which are
returned to the developing plant breeding program vs.
general university research, etc.
Why License and Collect
Royalties?

Licensing allows for
technology transfer
extremely
efficient
◦ Maximize availability of new plant varieties which often
have superior characteristics which lead to direct
benefit to the grower
◦ Creates incentive to remain competitive
◦ UF/IFAS succeeds when the grower succeeds
Royalty Distribution:
Sustainable Plant Breeding
UF policy encourages and enables the
development of commercially successful plant
varieties and the transfer of these varieties to
industry for the benefit of the agricultural sector
and the general public in Florida, the U.S., and
abroad
 As funding for plant breeding programs at land
grant universities has decreased, many of these
programs have become reliant on royalty returns
for their survival

2012 Peer Review Survey
U.S. land grant universities and research
programs (USDA/ARS) with active plant
breeding programs surveyed
 17 questions

◦ Focuses:




Cultivar release processes
Breadth of plant breeders and programs
Licensing processes
Royalty distribution
2012 Peer Review Survey

Respondents:
◦ Rutgers University, University of Wisconsin, Auburn
University, Iowa State University, Washington State
University, North Carolina State University, University
of Arkansas, USDA/ARS, Oregon State University,
University of California Davis, University of Georgia,
and Louisiana State University
2012 Peer Review Survey

Does your institution license released plant
varieties and germplasm exclusively, nonexclusively, or both?
◦ 100% of institutions license both exclusively and nonexclusively.
2012 Peer Review Survey

How does your institution decide whether
released plant varieties and germplasm are
licensed exclusively or non-exclusively?
◦ UF: Decisions relative to plant variety licensing are
made by FFSP based on guidance and
recommendations of UF/IFAS plant breeders, academic
department chairmen, and other representatives who
serve on the UF/IFAS Cultivar Release Committee and
the UF/IFAS Cultivar Release Advisory Committees.
2012 Peer Review Survey

How does your institution decide whether
released plant varieties and germplasm are
licensed exclusively or non-exclusively?
◦ Survey: most all respondents indicated that these
decisions are made at the institution’s cultivar/variety
release committee level with input sought from the
office of technology transfer/licensing agent
◦ Exclusive arrangements are often sought when
specialized marketing effort is required
2012 Peer Review Survey

How are royalty rates, license fees, and annual
minimum royalty rates for plant varieties and
germplasm established?
◦ UF: Financial terms of license agreements are based
on reasonable royalty rates which are generally
accepted within a particular industry. FFSP analyzes
the royalty rates of other proprietary plant varieties
which have been developed, released, and licensed by
other U.S. land grant institutions so that its royalty
rates are comparable to those of others.
2012 Peer Review Survey

How are royalty rates, license fees, and annual
minimum royalty rates for plant varieties and
germplasm established?
◦ Survey:
 Historical precedent, industry standards, rates of other
varieties
 Margins,
 Market approach - what market will bear?
 Advice of inventor, internal release and licensing committees
2012 Peer Review Survey

What process (e.g. ITN, bid solicitation, etc.) does
your institution use to announce exclusive license
opportunities? How are respondents evaluated?
◦ UF: ITN
◦ Survey:
 Bid solicitation – bids evaluated by committee (evaluate on
multiple criteria)
 No announcement – seek out industry leaders
 Classified Ad and Federal Register posting
 Mostly for international
 Variety release/licensing committee evaluates
2012 Peer Review Survey
Are licenses granted internationally as well as
domestically? If so, are both non-exclusive and
exclusive licenses pursued for both?
 UF:

◦ Yes. Typically, international territories are licensed
exclusively - exclusive licensee has increased
capabilities and incentives to protect, market, trial,
develop, and enforce the intellectual property
protection of the licensed plant varieties. Both
exclusive and non-exclusive licensing models are
pursued domestically.
2012 Peer Review Survey
Are licenses granted internationally as well as
domestically? If so, are both non-exclusive and
exclusive licenses pursued for both?
 Survey:

◦ All respondents that have international demand and
interest license internationally
◦ Most all license exclusively overseas
◦ A few predominately license only non-exclusively
domestically, but the majority license both exclusively
and nonexclusively, domestically and internationally
2012 Peer Review Survey
For international licensing, how does your
institution reflect the equity position of in-state
stakeholders versus out-of-state and foreign
companies?
 UF:

◦ 1) Given the first opportunity to evaluate, license, grow, market,
and commercialize plant varieties developed and released by
UF/IFAS
◦ 2) In-state stakeholders benefit directly and indirectly from the
extensive research and extension efforts carried out by UF/IFAS
research and extension faculty
2012 Peer Review Survey
For international licensing, how does your
institution reflect the equity position of in-state
stakeholders versus out-of-state and foreign
companies?
 UF (cont.):

◦ 3) In-state stakeholders are granted license agreement
terms which are no less favorable than the terms extended
to out-of-state and foreign companies
◦ 4) During times of short supply of plant material,
preference is given to in-state producers
2012 Peer Review Survey
For international licensing, how does your
institution reflect the equity position of in-state
stakeholders versus out-of-state and foreign
companies?
 Survey:

◦ Some have preferential/reduced royalty
◦ In-state research and extension efforts
◦ Reinvestment of international royalties into in-state
programs
2012 Peer Review Survey
For international licensing, how does your
institution reflect the equity position of in-state
stakeholders versus out-of-state and foreign
companies?
 Survey (cont.):

◦ Protection sought to ensure that royalties can be collected
◦ Delayed international licensing (timing of access, 2-5 years,
crop dependent)
◦ Allocation of limited stocks to in-state producers first
2012 Peer Review Survey
For international licensing, what does your
institution do (if anything) to manage
competition between foreign producers and instate growers/producers?
 UF:

◦ Provided first access to commercialize new varieties
◦ Generally granted preferential financial terms (e.g. a lower
per plant based royalty, no production based royalty, etc.),
thus giving these in-state growers/producers a competitive
advantage over foreign producers.
2012 Peer Review Survey
For international licensing, what does your
institution do (if anything) to manage
competition between foreign producers and instate growers/producers?
 Survey:

◦ First access, terms structured to provide in-state industry
with a competitive advantage
◦ Delayed international licensing
2012 Peer Review Survey
Number of Faculty Actively Engaged in Plant Breeding
40
35
No. of Faculty
30
25
20
15
10
5
0
UF
UWisc
Rutgers
Auburn
ISU
NCSU
WSU
Institution
UArk
OSU
UC Davis
UGA
LSU
2012 Peer Review Survey
Number of Faculty Who Released New Germplasm and/or Cultivars
in the Last 10 Years
60
No. of Faculty
50
40
30
20
10
0
UF
UWisc
Rutgers
Auburn
ISU
NCSU
WSU
Institution
UArk
OSU
UC Davis
UGA
LSU
2012 Peer Review Survey
Number of New Plant Varieties or Germplasm Releases
100
90
No. of Releases
80
70
60
2007
50
2008
40
2009
30
2010
2011
20
10
0
UF
UWisc Rutgers Auburn
ISU
NCSU
WSU
Institution
UArk
OSU
USDA
UC
Davis
UGA
2012 Peer Review Survey
Number of Times (from 2007-2011) Each Form of Intellectual
Property Protection (or Public Release) Has Been Sought
120
No. of Times Sought
100
80
Public Release
PVP
60
Plant Patent
Utility Patent
40
Trade Secret
Trademark
20
0
UF
UWisc Rutgers Auburn
ISU
NCSU WSU
UArk
Institution
OSU
USDA
UC
Davis
UGA
LSU
2012 Peer Review Survey
Number of Times (from 2007-2011) Each Form of Intellectual
Property Protection (or Public Release) Has Been Sought
120
No. of Times Sought
100
80
Public Release
PVP
60
Plant Patent
Utility Patent
40
Trade Secret
Trademark
20
0
UF
UWisc Rutgers Auburn
ISU
NCSU WSU
UArk
Institution
OSU
USDA
UC
Davis
UGA
LSU
2012 Peer Review Survey
Does your institution have an intellectual
property rights office or other affiliated
organization (e.g. crop improvement association,
foundation seed program) that deals with plant
patents/PVPs, plant variety and germplasm
licensing
or
other
revenue-generating
mechanisms?
 UF:

◦ Office is within foundation seed organization (FFSP)
2012 Peer Review Survey
Does your institution have an intellectual
property rights office or other affiliated
organization that deals with plant patents/PVPs,
plant variety and germplasm licensing or other
revenue-generating mechanisms?
 Survey:

◦ 10 are within central university/research administration office (e.g.
research foundation)
◦ USDA/ARS – ARS Headquarters; University of Arkansas – in
Experiment Station; Iowa State – Research Foundation and Crop
Improvement/Foundation Seed
2012 Peer Review Survey
Number of full-time equivalent (FTE) staff
handling intellectual property rights for plant
varieties in calendar year 2011.
 UF:

◦ 2.25

Survey:
◦ Average: 2.45 FTE(s) per institution
2012 Peer Review Survey
How are unreleased experimental lines and
germplasm exchanged or transferred to other
organizations?
 Transfer
to other U.S. public research
institutions:

◦ UF: MOU or MTA used and UBMTA used
◦ Survey:
 100% use MOUs or MTAs
 31% use license agreements
 54% use the Uniform Biological Materials Transfer Agreement
(UBMTA)
2012 Peer Review Survey
How are unreleased experimental lines and
germplasm exchanged or transferred to other
organizations?
 Transfer to U.S. private companies:

◦ UF: MOU or MTA used
◦ Survey:
 92% use MOUs or MTAs
 54% use license agreements
 23% use the Uniform Biological Materials Transfer Agreement
(UBMTA)
2012 Peer Review Survey
How are unreleased experimental lines and
germplasm exchanged or transferred to other
organizations?
 Transfer to international research institutions:

◦ UF: MOU or MTA used
◦ Survey:
 100% use MOUs or MTAs
 31% use license agreements
 23% use the Uniform Biological Materials Transfer Agreement
(UBMTA)
2012 Peer Review Survey
How are unreleased experimental lines and
germplasm exchanged or transferred to other
organizations?
 Transfer to international private company:

◦ UF: MOU or MTA used
◦ Survey:
 92% use MOUs or MTAs
 54% use license agreements
 23% use the Uniform Biological Materials Transfer Agreement
(UBMTA)
2012 Peer Review Survey
Royalty Revenue Generated From Licensing Released Plant Varieties and
Germplasm
$9,000,000
$8,000,000
Revenue ($)
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
UF
UWisc Rutgers Auburn
ISU
NCSU
WSU
UArk
Institution
OSU
USDA
UC
Davis
UGA
LSU
2012 Peer Review Survey
Royalty Revenue Generated From Licensing Released Plant Varieties
and Germplasm
$8,000,000
Revenue ($)
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
UF
UWisc Rutgers Auburn
ISU
NCSU
WSU
UArk
Institution
OSU
USDA
UC
Davis
$ Reinvested Directly in Plant Breeding Programs
Total Royalty Revenue Generated
UGA
LSU
2012 Peer Review Survey

Takeaways from survey:
◦ UF and FFSP are very similar to other institutions in
the use of exclusive and non-exclusive license
agreements and the method for establishing royalty
rates
◦ The UF and FFSP process of seeking and evaluating
potential exclusive licensees is formal but not
drastically different from the processes (bid
solicitations, etc.) used by others
2012 Peer Review Survey

Takeaways from survey (cont.):
◦ UF/FFSP has the most aggressive royalty reinvestment
policy for plant breeding research program support
(70%)
 WSU is equivalent for seed crops
◦ FFSP has the lowest overhead rate (10%) of all
institutions surveyed – allows for maximization of
research program support
◦ UF/FFSP is unique in that plant variety licensing is
managed by the foundation seed organization
Symposium: Process for IP
Management, Cultivar Release, and
Licensing
Gulf Coast Research and Education Center, Balm, Florida
August 6, 2012
John C. Beuttenmuller
Executive Director
Florida Foundation Seed Producers, Inc.