Lynnell Brandt, left, president of Proprietary Variety Management, discusses licensing and grade standards of Cosmic Crisp apples during a field day in September in Quincy, Washington. At right is Ines Hanrahan, project manager for the Washington State Tree Fruit Research Commission. (Ross Courtney/Good Fruit Grower)
The first Cosmic Crisp international licenses have been signed and the first budwood has been shipped overseas.
Last year, Proprietary Variety Management shipped buds of the new apple variety, designed specifically for Washington’s fruit industry, to international quarantine facilities and licensed two Italian fruit companies to grow and sell WA 38, which goes by the trade name Cosmic Crisp.
The Yakima, Washington, company was contracted by Washington State University to manage the commercialization of Cosmic Crisp, developed by university breeders.
Despite some grower surprise that overseas companies are already involved, the moves mark the university’s efforts to protect its breeders’ invention in the competitive and complex global marketplace, said university officials and variety managers.
“This has to be done or it becomes an open variety,” said Lynnell Brandt, president of Proprietary Variety Management. That would mean anybody could grow it and sell it with any level of quality anywhere in the world.
Acknowledging that the international agreements may not have been known among Washington growers, Brandt and university officials have been speaking at field days and industry groups over the summer and will present during a Cosmic Crisp session at the Washington State Tree Fruit Association annual meeting Dec. 5-7 in Wenatchee.
“This has come so fast, with so much interest and so forth that we haven’t reached out enough to make sure that everybody has understood why these moves were made,” Brandt said.
Several growers contacted in late October by Good Fruit Grower expressed surprise about the Italian licenses but did not object to them.
“This is news to me,” said Tom Riggan, CEO of Chelan Fresh.
Riggan, a member of a marketing advisory committee for WA 38, who recalled vague discussions about global commercialization a year ago but no timelines or specific countries.
However, he supported Brandt’s decision to take action on his own due to time constraints, he said. Brandt’s management company also has represented Chelan Fresh with other varieties, Riggan said.
Peter Verbrugge, president of Sage Marketing in Yakima, heard about the Italian licenses in October and first thought it was just a rumor. “It was my understanding … that we were not going to license anybody outside of Washington,” he said.
Verbrugge sits on a different WA 38 advisory committee created by the university that recommended giving Washington growers at least 10 years of exclusive rights and sending buds overseas for quarantine purposes.
He called the lack of communication “a little frustrating.”
The Washington Apple Commission, charged with collectively promoting Washington apples internationally, also learned of the Italian licenses in late October.
“Today it’s a PR issue for WAC,” said Todd Fryhover, president of the commission, in an email. “We have been talking up Cosmic Crisp as Washington’s proprietary variety across all export markets.
Now we’ve learned it’s not true, and the Italians have the ability to sell into specific markets. A big deal for us. We look foolish.”
Global complexities
Communication aside, Brandt and university officials are making a practical argument about why they’ve pursued international agreements.
There are two issues at play — international quarantines and grower licensing — and both factor into the protection of intellectual property.
WA 38 is a managed release rather than an open release. Growers in North America but outside of Washington must wait at least 10 years before growing the variety due to its U.S. patent and trademark.
Washington growers are scheduled to plant the first commercial blocks in 2017, while growers in Pennsylvania, New York or other apple-producing states will have to wait until 2027 at least.
However, preserving the variety overseas is a different ballgame due to the complexities of global intellectual property agreements.
“There’s no such thing as a worldwide patent and worldwide trademark,” said Albert Tsui, a patent attorney for the university, at a field day in Quincy, Washington.
Instead, the university must seek plant breeders’ rights under international treaties, namely UPOV, the International Union for the Protection of New Varieties of Plants, based in Geneva, Switzerland.
In UPOV signatory countries, breeders have six years from the first commercial sale offering of their new variety to apply for plant breeder’s rights.
In the case of Cosmic Crisp, that six-year clock started in June 2014, when the university held a drawing among Washington growers to decide who would get the first limited supply of start-up wood for 2017 plantings.
To start that plant breeders’ rights process, though, those other countries must have plant material to quarantine and keep in their repositories while authorities determine if the variety is truly distinct and stable.
In most UPOV territories, Brandt has no legal obligation to go further, such as licensing a commercial grower, said Steve Hutton, the sole U.S. board member of CIOPORA, an international ornamental and fruit plant breeder advisory group based in Berlin.
“As long as you’re within that six-year period then you have complete control of that variety,” said Hutton, CEO of Star Roses & Plants, a Pennsylvania ornamental nursery. “Then it becomes a business decision, not a legal decision, what you do with it.”
However, as a practical matter, most breeders do offer licenses to international growers to secure the help of a steward to protect the variety from pirated propagation, Brandt said.
Licensing growers to produce and sell the apple gives those growers incentive to be a watchdog for violations.
“They’re involved with the everyday commercialization,” Brandt said. “They know what’s going on. They’ll hear real quickly if somebody is infringing on that.”
PVM would have trouble keeping tabs on European growers from Yakima. “It’s not practical, not realistic,” Brandt said.
Also, Brandt does not want to risk legal challenges in other nations, which may want their farmers to have a chance to grow a variety in return for the expense and hassle of screening it and protecting it. He suspects some nations may interpret UPOV’s requirements differently than Hutton from CIOPORA.
Applying for plant breeders’ rights and sending wood overseas is an expensive process, Brandt said. “WSU has an expectation to receive a return on their investment.”
Indeed, universities and other private breeders often license new varieties internationally.
“We believe that global markets for perishable goods are often best served by local producers rather than solely U.S.-based producers,” said Thomas Hutton (unrelated to Steve Hutton), operations director and chief of staff of the University of Minnesota office of commercialization in an email.
Even Honeycrisp, an open variety in the United States, is propagated and sold only through licensed companies in the European Union, South Africa and New Zealand.
All Minnesota growers are eligible to produce the varieties, but the university seeks more production and marketing capacity to commercialize its varieties such as SweeTango and Rave than Minnesota alone can provide.
“Minnesota is not a large-volume producer of apples and so cannot supply the necessary quantities to support a national or international program,” Thomas Hutton said.
Leith Gardner, a private cherry breeder in Modesto, California, uses international licenses to maximize sales of her varieties but tries to work only in nations that have a track record of respecting intellectual property and don’t compete directly with California. Even with licensees, her company, Zaiger Genetics, struggles sometimes to stamp out piracy.
“There’s no 100 percent in anything,” she said.
David Cain, another California cherry breeder, echoed Brandt’s cost concern. Hiring attorneys overseas costs money, so breeders naturally want to work with a licensee to generate sales.
“Patent attorneys aren’t cheap,” he said.
Cosmic so far in the world economy
So far, Proprietary Variety Management has sent between 10 and 20 Cosmic buds to quarantines in the Netherlands to satisfy European Union requirements for the Italian licenses, as well as Argentina, Chile, New Zealand, Australia and South Africa. The facilities are rough equivalents to the United States’ Clean Plant Network.
Plants typically spend one or two years in quarantine, Brandt said. Then begins a “grow-out” period to boost the supply of stock trees in the nurseries, as well as the trees for repositories, Brandt said.
Last year, PVM signed an agreement with VOG and VI.P, two closely related fruit cooperatives in South Tyrol, Italy, the first and only license holders outside the state of Washington so far. Commercial plantings may still be five years away, Brandt said, with the first harvest a few years beyond that.
The two Italian companies will operate under strict rules, Brandt said, though he declined to reveal specifics.
They may only grow a certain acreage under certain conditions and sell the apple only in Europe and North Africa, regions in which they already market. PVM and the university have chances to “reconsider” the contract each time the companies reach certain “milestones,” Brandt said.
If they meet the requirements, they will remain the exclusive European Union licensees of Cosmic Crisp, Brandt said.
PVM is actively seeking similar license arrangements in other parts of the world on behalf of the university, Brandt said.
“The size of scope of this project does present a learning curve for all of us,” Brandt said. •
– by Ross Courtney
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