California strawberries are world-renowned for their size, color, firmness and flavor. That's why they're at the heart of a nearly $3-billion industry producing 87% of all the strawberries consumed in North America.
They're less well known as the source of bad blood that has boiled among breeders and growers and landed the University of California in court for the second time in three years.
But that's where things stand. Barring a last-minute settlement, opening statements will be heard Monday in San Francisco federal court, in a case pitting the university against two former professors who were among its most successful agricultural scientists and the private company set up to commercialize their work.
Watsonville-based California Berry Cultivars (CBC) was created in 2013 to exploit the talents of Douglas Shaw and Kirk Larson as they were preparing to leave UC Davis, where they had reigned for more than two decades as star strawberry breeders.
They were required as UC employees to assign their strawberry patents to the university in return for a share of the royalties. The arrangement benefited both sides: The patents are among UC's most profitable, bringing in about $7 million a year — almost $100 million over time — of which about $2 million a year has flowed to the scientists.
"But all things must end," CBC says in its trial brief. Shaw and Larson notified UC in 2011 that they were planning to retire three years hence. At that point, the relationship between the professors and their university started looking like an ugly divorce.
The university accuses the professors of stealing strawberry varieties and infringing patents in order to advance their private business. The professors say UC has attempted in bad faith to keep CBC from continuing strawberry development as a private entity.
The dispute underscores the importance of UC as a public trust. For the agriculture industry, it's a fount of research and innovation — and the strawberry breeding program is a leading example. UC established the program in the 1930s and moved it to Davis in 1959. Shaw took over in 1990 and Larson joined him a year later. The two turned the program into what they call "the foremost strawberry breeding program in the world." Few would dispute that. Today more than half the state's 30,000 strawberry acres are planted with UC Davis' offspring.
The program occupies a vital position in the California strawberry industry. At the industry's base are hundreds of growers who depend on the university for an annual supply of new plants from popular strawberry breeds as well as new varieties bred for color, flavor, drought- and pest-resistance and other valued qualities. Because strawberry plants lose vigor year by year, growers buy cuttings from nurseries supplied by the UC program. Royalties and fees flow back to UC from the growers via the nurseries.
UC also operates as a commercial competitor of large strawberry growers with their own proprietary breeding programs, the best-known of which is Watsonville-based Driscoll's. The proprietary breeders plant about 40% of the state's strawberry acreage.
Independent growers say they need both UC and CBC to function as a counterweight to the big breeders, which charge steep royalties and commissions for use of their plants. If UC's program withers and CBC is prevented from operating, strawberry farmers would have no alternative but to become "captive growers" to the big agribusinesses. Decades of painstaking work also hangs in the balance — plant material currently in the possession of UC and not yet brought to market.
"It would be a shame to see those strawberry varieties thrown onto the ash heap of history," said Michael Cleugh, a vice president at Eclipse Berry Farms, which cultivates 1,800 acres around Oxnard, Santa Maria and Salinas. Driscoll's declined to comment for this column. Shaw didn't respond to messages left at his home and Larson, who has retired, couldn't be reached.
The federal court jury's main task will be unraveling the tangled ownership rights to biological material — plants on which CBC has continued to experiment, with the goal of producing new strawberry varieties for the industry. "They took plants that belonged to the university and used them for purposes they were not authorized for," said Jacob Appelsmith, a UC Davis attorney. "We consider that to be theft."
CBC says the plants were not yet at the patentable stage and therefore should be available for further experimentation by Shaw. "The best outcome of the trial would be to clearly establish that CBC can keep developing with the material they invented," said Greg Lanier, a CBC attorney. He said UC still would be in line to collect royalties once the work reached the patentable stage. CBC also suggested that UC may have been in league with the big proprietary breeders such as Driscoll's, who "did not want competition from Shaw at UC, or at CBC after his retirement," according to the company's trial brief.
A complicating factor in the dispute is years of growing enmity between UC and the breeders, which first emerged in 2011, when Shaw and Larson announced their pending retirements. Not long after that, rumors percolated through the strawberry community that UC Davis was planning to shut down the breeding program.
Growers were mystified. "We couldn't believe UC wanted to shut down the most successful public-private breeding partnership in the world," said A.G. Kawamura, an Orange County grower and former state agriculture secretary who is a part owner of CBC. The California Strawberry Commission, a state agency that represents the industry and had been supporting the breeding program financially for years, sued to keep it open.
The lawsuit was settled in 2015 after UC agreed to continue the program for at least five years and promised that UC-produced varieties would continue to be licensed to all growers. In the wake of the settlement, UC announced the appointment of a new strawberry breeder, Steven J. Knapp, a former global director for vegetable breeding at Monsanto.
The university says the rumors of a shutdown were always untrue — and that they were spread by Shaw and Larson themselves. When the scientists decided to retire, according to UC's trial brief, they told growers and nurseries they would have to join CBC or "be shut out of new varieties." UC says they did no breeding work in 2013 and 2014 even though they were still university employees, and refused to give Knapp program data he needed to advance their research.
CBC says Shaw and Larson were trying to protect the program's heritage, not take it for themselves. UC Davis' plant science department had proposed a partnership with Shaw for continued breeding, but that plan had been rejected by university administrators. Shaw "felt increasing frustration with the bureaucracy at the university and didn't think the university was fulfilling its mission as well as it should," said Rick McKnight, another CBC attorney.
From the growers' standpoint, the worst outcome of the battle would be a shutdown of the breeding work that made Shaw famous and the California strawberry the envy of the world. Some think UC should allow CBC to continue its breeding work while its own program remains in force. "What would be ideal is for CBC to release their varieties through UC and pay them a royalty," Cleugh said. "That would make this whole convoluted divorce more palatable for the industry."
He said CBC already has developed varieties that seem especially suitable to Southern California, where yields are lower than in the rest of the state.
"What they have looks better than anything we've got," Cleugh said.
But the dispute has already produced at least a temporary suspension of breeding work at UC Davis. Knapp's scientific approach, which focuses on genomics in contrast to the traditional technique of Shaw and Larson, is promising, but it will take time for his work to reach the growers."CBC has a head start," Cleugh said. "The guys at UC Davis are having to reinvent the wheel. CBC already has selections that are going to be good. The industry doesn't want to see them thrown out in a lawsuit. That would be a crime scene."
The best outcome for growers would be to have CBC and the university reach a deal that allows both programs to continue, he said. "The more breeding, the better. Competition is good."