1. 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.

2. Discussion Topics How the Process Works: ◦ Cultivar Development ◦ Cultivar Release ◦ Intellectual Property Protection ◦ Licensing ◦ Royalty Distribution Results of 2012 Peer Survey

3. 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

4. "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)

5. 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 Bayh-Dole Act (35 U.S.C. § 200-212)

6. University of Florida: Intellectual Property Policy Research conducted by University personnel ◦ Patentable inventions and other marketable forms of intellectual property result Obligation to serve the public interest by insuring that intellectual property is appropriately developed

7. 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

8. 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

9. 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

10. University of Florida: Intellectual Property Policy University of Florida University of Florida Research Foundation, Inc. (UFRF) Florida Foundation Seed Producers, Inc. All Other University Inventions (Utility patents, copyrights, etc.) Plant Germplasm and Cultivars (Plant patents, plant variety protection certificates PVP)

11. UF/IFAS Plant Breeding Programs Aglaonema Alfalfa Anthurium Apple Bahiagrass Beans Bermudagrass Blueberry Caladium Centipedegrass Citrus Coleus Corn Cucurbits Dieffenbachia Floral Forestry Gerbera Gladiolus Grape Lisianthus Nectarine Oats Paspalum Peach Peanut Plum Pumpkin Red Clover Rye Ryegrass Sorghum Soybean St. Augustinegrass Strawberry Tomato Triticale Tropical Fruit Wheat White Clover Zoysiagrass 26 Plant Breeding Scientists DIVERSITY Wide Array of Different Crops

12. 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)

13. 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

14. 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?

15. UF/IFAS Cultivar Release Process 1. Novel plant variety developed by UF/IFAS plant breeder 2. Plant breeder notifies Department Chair 3. Department Chair convenes Cultivar Release Advisory Committee (CRAC) a.Evaluate proposed release in regards to its intended purpose(s) b.Provide scientific scrutiny of data, etc. c.Recommend form of IP protection (plant patent, utility patent, PVP, public release) 4. CRAC makes recommendation to the UF/IFAS Cultivar Release Committee (CRC)

16. UF/IFAS Cultivar Release Process 5. 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. ◦ Exclusively – ITN Process – or – ◦ Non-exclusively

18. Florida Foundation Seed Producers, Inc. (FFSP) 1943 – Florida Crop Improvement Association (FCIA) formed as an agricultural cooperative (501(c) 5) 1957 – FCIA became FFSP

19. 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

20. 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.

21. 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

22. 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

23. 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.:

24. 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

25. 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

26. 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.

27. 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

28. 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

29. 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

30. 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

31. 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?

32. 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

33. 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

34. 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

35. 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

36. 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

37. 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

38. Royalty Distribution: Sustainable Plant Breeding

39. 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.

40. Why License and Collect Royalties? Licensing allows for extremely efficient technology transfer ◦ 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

41. 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

42. 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

43. 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

44. 2012 Peer Review Survey Does your institution license released plant varieties and germplasm exclusively, non- exclusively, or both? ◦ 100% of institutions license both exclusively and non- exclusively.

45. 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.

46. 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

47. 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.

48. 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

49. 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

50. 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.

51. 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

52. 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

53. 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

54. 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

55. 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

56. 2012 Peer Review Survey For international licensing, what does your institution do (if anything) to manage competition between foreign producers and in- state 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.

57. 2012 Peer Review Survey For international licensing, what does your institution do (if anything) to manage competition between foreign producers and in- state growers/producers? Survey: ◦ First access, terms structured to provide in-state industry with a competitive advantage ◦ Delayed international licensing

58. 2012 Peer Review Survey

63. 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)

64. 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

65. 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

66. 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)

67. 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)

68. 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)

69. 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)

70. 2012 Peer Review Survey

72. 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

73. 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

74. 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.