Rachel Krevans, Morrison & Foerster partner (S. Todd Rogers)
A San Francisco jury Wednesday came down strongly in favor of the University of California in a high-stakes IP dispute over its strawberry breeding program.
Jurors found that former professors Douglas Shaw and Kirk Larson infringed UC’s patents and used plant material owned by the university when they left a few years ago to launch their own strawberry breeding business.
“It’s an honor to represent the university, and I’m ecstatic that we were able to win all of their claims for them,” said Morrison & Foerster partner Rachel Krevans, who led the UC team at trial.
The one person who didn’t sound completely sold was U.S. District Judge Vince Chhabria of the Northern District of California, who said after the verdict was read that he believes the university bears some responsibility for the intensely litigated dispute.
Chhabria said it was clear Shaw, Larson and the company they co-founded with independent growers, called California Berry Cultivars or CBC, acted inappropriately. But the university’s hands-off approach to the strawberry program and poor communication with the professors contributed to the dispute, he added.
“I will be the one who needs [to] decide what the appropriate remedy is, and how the strawberry plants are handled going forward,” Chhabria said. “And during that phase we are going to spend more time discussing the university’s conduct in this case.”
A bench trial is scheduled next week before Chhabria on the university’s equitable remedies.
The university’s 70-year-old breeding program has played a leading role in the development of California’s $2.5 billion a year strawberry crop. Before the five-week trial, Chhabria seemed to take a jaundiced view of both sides, writing that Regents of the University of California v. California Berry Cultivars seemed like the type of case where a jury could “sock it” to both sides.
The university accused Shaw and Larson of using patented and unpatented strawberries developed by many generations of UC breeders to develop new varieties at a facility in Spain. Shaw and Larson then imported the seeds back to California to produce new plants without the school’s knowledge or permission.
Larson, Shaw and CBC in turn accused the university of applying for patents on more than 100 varieties in bad faith, in an effort to block the professors from using plants with no commercial value in their ongoing work.
They were represented by a Jones Day team that included Gregory Lippetz and T. Gregory Lanier.
The jury found Shaw and Larson liable for conversion, breach of loyalty and fiduciary duty, and of willfully infringing the university’s patents on 11 different strawberry types. The jury expressly rejected CBC’s claim that the university acted in bad faith.
Krevans said the university has spent many decades building up its strawberry program, which is supported primarily by royalties and public funds. That model gets unwound if individual professors can take plant varieties they’ve developed to a competing enterprise, she said.
MoFo partner Matthew Chivvis, who also worked on the trial, said the verdict is “good for the California strawberry industry and will provide future guidance to academic institutions on protecting their assets against infringement.” MoFo partners Wesley Overson and Scott Llewellyn, and associates David Scannell, Jake Ewerdt, Elizabeth Patterson, Alex Hadduck and Rachel Dolphin also worked on the case.
California Berry Cultivars spokesman A.G. Kawamura said the verdict stung but that his side was heartened by Chhabria’s remarks. He said he hopes the parties can work out an arrangement where UC focuses on its strengths, such as disease resistance and heat tolerance, while professors Shaw and Larson can continue their work on taste and appearance.
“We’re tremendously disappointed in the verdict,” he said, “but we still are committed to seeking a positive outcome and a positive collaboration with the university moving forward.”