Wheat growers negotiate with OSU over royalties
By Eric Mortenson
The unexpected success of the Clearfield wheat varieties has growers asking Oregon State University to revise the distribution of royalties from plants it develops.
Growers want more royalty earnings plowed back into wheat research within the College of Agricultural Sciences, instead of supporting OSU’s Office of Commercial and Corporate Development, or OCCD.
The office handles licensing and patent agreements for OSU products, wheat being one of many, agriculture Dean Dan Arp said. “It’s a necessity, most campuses have something like that,” he said.
Arp and Blake Rowe, CEO of the Oregon Wheat Commission, said growers and OSU have an enduring partnership and don’t want to jeopardize it. Row called the discussions “negotiations amongst friends,” but said growers believe the royalty arrangements should be changed.
The issue arose with a success of Clearfield wheat varieties, which OSU developed using technologies owned by BASF Corp., the New Jersey-based chemical company that is an affiliate of a German company.
Clearfield crop varieties are resistant to BASF’s Beyond herbicide, which gives Pacific Northwest wheat growers the ability to control weeds, especially jointed goatgrass, and thus improve yield and quality. The technology is akin to Monsanto’s “Roundup Ready” products, but Clearfield is not genetically modified to resist the herbicide. Instead, Clearfield was developed using traditional plant breeding methods.
“We didn’t anticipate how successful it would be,” Rowe said. “Clearfield became among the most popular and widely planted in the Pacific Northwest.”
Rowe said royalties assessed to Clearfield seed sales generate $1.3 million to $1.5 million annually for OSU. “Nobody anticipated how big the revenue stream ultimately would be,” he said. “Frankly, in hindsight we would design (distribution) differently, but nobody knew.”
Growers have a stake in royalties distribution in part because they support OSU’s work through commission funding, providing field test sites and other means. Arp acknowledged growers have been “very supportive” of OSU. “The framework is our strong partnership with wheat growers,” he said.
The issue points out the complications that can arise when a public university collaborates with private industry.
The wheat varieties were released to growers with a royalty attached, which was intended to compensate OSU and BASF. Rowe, of the wheat commission, said the release was a “transitional moment” for OSU, and the university’s key researcher at the time appeared to agree.
“With this partnership have come many challenges and legal issues, such as defining the appropriate role of OSU in commercializing corporate-owned technology,” then-OSU wheat breeder C. James Peterson wrote in a 2003 report.
“If we are to stay relevant and continue to access new proprietary traits, public breeding programs must learn to effectively work with private industry,” Peterson wrote.
Among other things, public entities such as OSU must be able to protect patented technologies, retain the flexibility to develop exclusive markets for value-added traits and maintain confidentiality “without sacrificing our commitment to growers and the public,” Peterson concluded.
Arp, the OSU dean, called Peterson’s remarks “very prophetic.” Peterson has since moved on to become vice president of research for Limagrain Cereal Seeds, a private breeding and marketing company.
C. James Peterson’s report: