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NDSU Research Foundation - Licensing NDSU Varieties for Canadian Production

NDSU Research Foundation
North Dakota State University


Licensing NDSU Varieties for Canadian Production

Grains produced in Canada compete vigorously against North Dakota grain for sales -- that's a function of the open border and free trade agreements between the two countries. But there is cordial collaboration between the scientists developing crops on either side of the border.For years, Canadian and NDSU scientists have coop-erated to solve production problems in both countries. For example, Canada is sharing germplasm with some resistance to the orange wheat blossom midge and some durum germplasm with the low cadmium characteristics desirable to North Dakota. Genes for the hulless characteristic in "Paul" oats came from Canada. Canadian durum, buckwheat, canola and flax varieties have been imported to North Dakota for the past 10 years.Despite this sharing, things weren't always neat once a new variety was developed. New varieties found their way to Canadian producers in formal and informal ways -- usually without any return on North Dakota's research investment. That process is changing as breeders protect their intellectual property and collect research fees (royalties) in both countries to continue effective breeding programs.

Protecting ourselves in Canada

NDSU has begun registering varieties in Canada to formalize the production and sale of North Dakota varieties there. History shows that NDSU varieties find their way across the border for propagation and sale with or without a formal process. Because it's illegal for Canadian seed producers to sell unregistered seed in their domestic market, some North Dakota varieties have been used for grain production up there. Some seed sales have come back across the border to the U.S. Free trade makes the border more open to that commodity flow. That's a policy situation that NDSU has no control over but must live with the results of.The university's new efforts to protect its intellectual property through the Canadian Plant Breeders' Rights process, ensures some return to North Dakota from Canadian use of NDSU varieties. This won't amount to a lot of income, but it should help recover some of the cost of research and development for future North Dakota work. The concern is that there be some control over the production and marketing of seed for varieties developed by NDSU. While it is impossible for the university to have any effect on competition between commercial grain producers in the two countries, NDSU can use the registration and protection system and licensing to prevent North Dakota varieties from being sold in Canada without some benefit coming back to the home of the original research and development.

A quick summary of the process

To establish Plant Breeders' Rights (PBR) and collect research fees in Canada, a Canadian entity must apply for PBR on behalf of the NDSU Research Foundation (NDSU/RF). In most cases, that entity is selected before PBR is applied for. The application for licensing must happen within one year of the American breeder applying for U.S. Plant Variety Protection. Varieties must go through an extensive registration and testing process in Canada. Only varieties approved for registration by Agriculture and AgriFood Canada may be legally sold in Canada's domestic seed grain market by variety name. Once NDSU/RF assigns the marketing rights for a variety to a Canadian entity, that firm is responsible for testing the new variety in Canada, marketing it and enforcing legal seed sales. The testing process in cooperative trials held in Canada generally takes several years before marketing approval is given. Some crops are granted temporary or interim registration to allow for industry and market testing.

FOSTER Barley:

A Case StudyNDSU is just beginning to use the PBR process to protect North Dakota's investments in crop variety development. The decision to take this step was made after discussions with interested parties within the university and seed and grain industry. FOSTER barley has begun the PBR process and the NDSU/RF is authorizing United Grain Growers Ltd. of Winnipeg to test and market the variety. The FOSTER process was accelerated because of considerable Canadian demand for seed of white aleurone malting barley varieties and the university's desire to not lose all protective rights. Canadian brewers are no longer required to use 100 percent blue aleurone six-row barley. U.S. maltsters interested in the variety also operate in Canada. This case was particularly tricky because Canadians demanding the seed were enticing U.S. producers who had seed available to sell it this year, regardless of certification. PBR has been applied for with Protective Direction which makes commercial seed sales illegal in Canada during testing until NDSU/RF gives permission to release the seed. The university's process for soliciting commercial agents for future Canadian registrations will be fine tuned. Future licensing will be done by competitive bids to also emphasize control of the variety as well as potential revenue.Under the FOSTER agreement, only Registered Class seed will be authorized for sale to the exclusive licensee, United Grain Growers. All Foundation and Registered classes of seed will be produced in North Dakota and all Breeders' class seed will remain under the control of NDSU seedstocks program. United Grain Growers can contract for Registered Class seed from North Dakota seed producers and will only be able to plant Registered seed for the production of Certified Class seed. All this is done to control the variety development program and secure NDSU's intellectual property. This agreement allows 1996 sales of enough Registered Class seed to grow about 300 acres of FOSTER for testing and minimal seed increase for market development. Additional seed will be sold for planting in 1997. Large-scale production in Canada should not occur before 1998. The agreement provides a way for United Grain Growers to control early proliferation of common seed in Canada. All this is designed to delay the impact of FOSTER on the U.S. commodity market.

The FOSTER agreement returns net revenue from the agreement to the NDSU agricultural research program. Eighty percent of the net revenue will go to NDSU agriculture administration with direction toward the barley breeding program. The other 20 percent goes to the NDSU Research Foundation with 30 percent of that sum endowed to support future research.


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