The most important plant patent trial of the early 21st century just took place in northern California.  California Berry Cultivars v. The Regents of the University of California sorts out “stakeholder” rights associated with the University system’s vaunted strawberry breeding program.

Two esteemed UC Davis professors left their academic positions and formed California Berry Cultivars (CBC) in order to commercialize their longstanding research accomplishments.  They had spent their careers at the University’s land grant college propagating and discovering new and improved varieties of strawberries.  In a real sense, these professors were the University’s strawberry breeding program.

The jury verdict is in.  Cribbing from an old Rolling Stones song, it left the professors’ reputations in tatters; and their private business interests, shattered.

In the fog of trial, one thing proved certain: a discovery misconduct jury instruction must have had a devastating impact on juror psyches from a neuropsychological standpoint.  In simple terms, this post explains why. 
Continue Reading A Toxic Pairing: Discovery Misconduct and Juror Neuropsychology in a Plant Patent Trial

Patent eligibility is in a state of flux.  Software and business method innovations challenge the boundary of what is patentable under U.S. law.  That dividing line is crossed when inventors claim exclusive rights in what really amount to “laws of nature, natural phenomena or abstract ideas.”  In a series of recent cases, the Supreme Court construed these three implied judicial exceptions to patent eligibility.  Alice Corp. v. CLS Bank Int’l is its most recent pronouncement bracketing patent rights.

Since software and computerized business methods now dominate and regulate many aspects of our industrialized food supply chain, how will already-issued food processing patents fare in this patent eligibility battle royale, post-Alice?  This article addresses that basic question.  A touchstone for this analysis will be a recently invalidated “Meal Builder” patent, a “computerized method and system for diet-related behavior analysis, training and planning.” See Dietgoal Innovations LLC v. Chipotle Mexican Grill, Inc. (slip opinion).
Continue Reading Assessing the Validity of Food Processing Patents, Post-Alice

Plant patents are often overshadowed by their more well-known utility and design patent counterparts under U.S. law.  Yet, with the increasing branding and differentiation of agricultural commodities, plant patent rights drive key investment and innovation opportunities—especially in that mother lode of all agricultural economies, California.  A case slowly making its way through California’s judicial system highlights the important role of strawberry plant patents and the nature of University research ownership rights.

Just the Facts, Ma’am

California Strawberry Commission (“CSC”) vs. the Regents of the University of California was filed in October 2013 seeking to obtain and reproduce “copies” of strawberry “germplasms” generated through the University of California, Davis’s research work related to improved and patented varieties of strawberries.  The living tissue of a cultivar is sometimes referred to as its “germplasm.”  The CSC bases its claim to the University’s strawberry cultivar “germplasms” on the fact that the CSC (comprised of private growers) helped fund the University’s strawberry cultivar research program for many years through research agreements.  Since the early 1990s, the University would collect money from the CSC to defray research costs ($350,000 a year most recently).

As a quid pro quo for this research funding assistance, the University would grant California strawberry growers two years of exclusive use of the strawberry cultivars it licensed to them—giving them a competitive head start on growers from other areas.  After two years, The University would charge California growers a reduced license fee compared to what strawberry growers outside of California otherwise would be required to pay.

By all accounts, the University’s research program has been extraordinarily successful: over 80% of strawberries grown in the U.S. are derived from UC Davis’s strawberry cultivars, and over 60% worldwide.  In the past nine years, the University’s received over $50 million in licensing revenues.[1]

But in 2013, this strawberry cornucopia fractured at its research seams.  UC Davis’s two leading strawberry cultivar researchers—Douglas Shaw and Kirk Larson—announced over a year ago that they would be leaving UC Davis to form their own strawberry research company.  Perhaps fearing that the University would disband its research program and cut these former researchers a sweetheart deal, the CSC filed its lawsuit to protect an alleged property interest in the fruits (pardon the pun) of the University’s research program.  The University has since disavowed any intent to disband its strawberry cultivar research efforts or to favor its former plant breeding researchers over others.
Continue Reading Breaking Up is Hard to Do: The California Strawberry Commission’s Claim to University Plant Breeding Research

The term pioneer patent [1] is often misapplied with hyperbole and exaggeration.  When it comes to the shrimp peeling machine invented by Fernand and James Lapeyre, however, that blockbuster label is spot-on. [2]  Their automated way of processing shrimp rocked the seafood processing industry in the 1950s by driving manual labor costs virtually out of existence.  In today’s vernacular, it was a real game-changer.

Patents (and intellectual property rights in general) do not necessarily confer natural monopoly rights as economists would understand the concept.  This is because excluding “others from using a particular name, word, image, product or process does not imply any substantial market power when substitutes are plentiful.” [3] When a groundbreaking patent is issued, however, the governmental grant can take on monopolistic tendencies—paradoxically even if unused and seemingly unexploited.

A monopoly is commonly defined as the “exclusive control by one group of the means of producing or selling a commodity or service.”[4]  A pioneer patent—and even more importantly nowadays, a conglomeration of related patents owned by a single entity—can sometimes create new product and service markets and legal barriers to entry capable of commanding what economists call “monopoly rents.”  As rational actors, it is also an economics truism that “monopolists invariably act like monopolists” as they strive to maximize profits.

Even though the United States Patent and Trademark Office is empowered to issue broad exclusionary rights to worthy inventors, another broad federal statute—the Sherman Act—exists to prevent abuses to the competitive process.  Section Two of the Sherman Act provides that every “person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony ….”  15 U.S.C. § 2.  The right to exclude others from co-opting inventions (in the absence of a license from the patent owner) is accurately described as a “time-limited government” conveyance of “potential monopoly power, which can be put to ‘good’ or ‘bad’ uses from a societal standpoint.”[5]

Where is the line drawn between lawfully exploiting patent rights and running afoul of antitrust law prohibitions regarding monopolization?  The answer is murky and perhaps unsatisfying to those seeking bright line licensing and competition rules.  The boundary line often only becomes clear in retrospect.  The demarcation between a patent owner lawfully exploiting exclusionary rights vs. an illegal monopolist abusing those same rights is highly fact-dependent.

The Lapeyre family’s very creative leasing scheme for its patented shrimp peeling machines offers a vital case in point.  With the invention of a single processing machine, the company irrevocably altered the cost dynamics of an entire shrimp processing industry.  Licensing disputes—collectively known as the “shrimp peeler” cases[6]—arose soon after the commercialization of the Lapeyre’s invention and were finally resolved in the mid-1960s.  These case holdings help demonstrate how the Lapeyre’s crossed the line between “good” and “bad” exercises of a patent’s potential market power.

The shrimp peeler cases predate wholesale policy changes in antitrust analysis that emerged out of the “Chicago School” of economic theory—especially the demand for the more rigorous determinations of market power championed by Judge Richard Posner.  However, despite paradigmatic changes in antitrust jurisprudence, the outcome of the shrimp peeler cases would likely be no different today. 
Continue Reading Antitrust Monopolization Considerations in Licensing Cutting-Edge Food Technology Patents

Plant patents occupy a seldom studied corner of potential patent protection.  But plant patenting is taking on new importance as growers and producers of fruits and vegetables—once branded only as commodities—take advantage of the premium price points more specific patent and trademark rights can yield.  Commodities appeal to the undifferentiated masses; but marketing targeted to individual taste preferences is now the order of the day.

What are Plant Patents?

Established through the Plant Patent Act of 1930 (the PPA), this intellectual property right is granted to any person who “invents or discovers and asexually reproduces any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings . . . .”  35 U.S.C. § 161.[1]

The Act’s legislative history describes this provision in layperson terms: “[T]he bill provides that any person who invents or discovers a new and distinct variety of plant shall be given by patent an exclusive right to propagate that plant by asexual reproduction; that is by grafting, budding, cuttings, layering, division, and the like, but not by seeds.”

The PPA does not provide patent protection for varieties of plants found growing in an uncultivated or wild state.  So, sorry to all you plant foragers!  Tuber propagated plants (e.g., potatoes) are also excluded from plant patent protection.

Before the PPA was enacted in 1930, patent laws seemed to favor industrialists over farmers.  This rankled the most famous American plant breeder of the time, Luther Burbank.  He bemoaned the fact that:

I have been for years in correspondence with leading breeders, nurserymen, and Federal officials and I despair of anything being done at present to secure to the plant breeder any adequate returns for his enormous outlays of energy and money.  A man can patent a mousetrap or copyright a nasty song, but if he gives to the world a new fruit that will add millions to the value of earth’s annual harvests, he will be fortunate if he is rewarded by so much as having his name connected with the result.[2]

In the 21st century, the goals of the PPA may be coming closer to fulfilling Luther Burbank’s plant breeder aspirations.  Take cherries, for example, which are now coming into season in droves.  While Bing cherries—Royal Annes in an earlier era of canned cherries—still dominate the U.S. market for fresh cherries, it is becoming more highly differentiated with new market entries.[3]  Aficionados can distinguish among and may prefer a Rainer, a Chelan, a Lapin or a Summit cherry, instead of that good ol’ Bing cherry.
Continue Reading The Growing Allure of Plant Patenting for Brand Differentiation

Patenting food processing and flavor-enhancing techniques is a cutting-edge legal endeavor.  This article reviews some fascinating new developments in food processing technology and patent litigation.

Today’s patent law market basket is filled with two patentable innovations: an edible biofilm to address and prevent the problem of cherry cracking; and an acoustic sound technique designed to enhance the taste of food.  On the patent litigation front, a sizable plaintiff’s jury verdict in roiling litigation over patented egg pasteurization techniques shows that infringing food processing patents can lead to expensive life lessons.

“SureSeal” Biofilm and Harvesting the Perfect Cherry

Pacific Northwest rains are both a boon and a curse for cherry growers.  Rain-induced cherry cracking is a perennial problem.  Most growth in cherries occurs in the final few weeks before their harvesting.  That is when cherry cracking susceptibility develops.[1]  Nearly ripe cherries absorb moister faster than their skins can expand.  If the cherries split, a year’s crop may be ruined in one fell swoop.

Manual efforts to prevent cherry splitting can lead to tragic results.  After a recent brief, but heavy rainfall, a helicopter pilot and his passenger were fanning moisture off a cherry tree orchard near Wenatchee, Washington.[2]  The helicopter’s main rotor clipped a power line.  The helicopter crashed into the orchard.  The passenger died, and the pilot suffered severe injuries.

Oregon State University scientists are trying to solve this vexing cherry cracking problem.  They developed SureSeal, a hydrophobic, elastic biofilm that consists of a copolymer of stearic acid, cellulose and calcium.  It significantly reduced cherry cracking in field tests.  The United States Patent and Trademark Office (USPTO) recently published the inventors’ patent application directed to this SureSeal innovation.  It is entitled  “Flexible Films and Methods of Making and Using Flexible Films.”

Continue Reading Patenting Enhanced Taste and Food Processing: Some Engaging Current Developments