Column: A legal conflict brings a sour note to the sweet history of California strawberries

WATSONVILLE, CA - APRIL 7, 2014: Fresh strawberries in a UC Davis strawberry field in Watsonville, C
Strawberries are the subject of yet another custody battle in California agriculture.
(Francine Orr / Los Angeles Times)

The California strawberry may look like any other fruit, if redder and juicier than most. But that appearance conceals surprising drama — lawsuits galore bearing accusations of thievery and collusion, all supposedly in the name of creating a sweeter berry with a longer shelf life.

And now, years after California growers thought conflicts over the fruit finally had been put to rest, yet another lawsuit threatens their hard-won peace.

Last month, the leading brand in supermarket strawberries, Driscoll’s, filed a federal lawsuit alleging that its proprietary berry varieties had been stolen by a company founded by the most celebrated breeder in the business and used in its own breeding program.

The lawsuit’s target is Douglas V. Shaw and his firm, California Berry Cultivars, or CBC. As it happens, Shaw was a key figure in the last legal fight to roil the industry — a years-long conflict between him and UC Davis, where he led a world-famous strawberry breeding program until striking out on his own in 2014.

We thought we had put all this behind us.
A.G. Kawamura, president California Berry Cultivars

In the litigation, UC alleged that Shaw and his assistant, Kirk Larson, had taken strawberry varieties and breeding records that belonged to the university when they left and refused to return the material.

Shaw and Larson were using some of those varieties, or cultivars, at CBC; the university said that was an infringement of its patents. A federal court jury found almost entirely in the university’s favor, but the judge in the case, Vince Chhabria, then ordered the parties to settle their differences or he would settle them himself.

They chose option A by reaching a joint settlement, and the entire strawberry community in California breathed a sigh of relief at the end of hostilities. A conflict between top-flight breeders and the university, which is the source of strawberry varieties planted on half of California’s 30,000 acres of strawberry fields, wasn’t good for anybody. That was especially true for the hundreds of independent growers who need an annual supply of new plants from popular strawberry breeds as well as new varieties bred for color, richer flavor, pest resistance and other qualities.

The stakes can’t be minimized: With a value of nearly $2.3 billion a year, strawberries are California’s sixth most valuable crop.

Strawberry growers are crossing their fingers that Driscoll’s lawsuit will end with a settlement, like the last. According to A.G. Kawamura, an Orange County grower who is the president of CBC, that could happen. “We’ve been in contact” with Driscoll’s, he told me. “Both companies want to avoid trial if possible.” But he wouldn’t say how active or productive such talks have been. Driscoll’s declined to comment.

The lawsuit could map out new legal ground in plant patenting, which used to be a remote corner of the intellectual property landscape compared with engineering and software patents. But commercial efforts to create distinguishable strains have stepped up over the years — fruits and vegetables are no longer merely generic products, but can be marketed as brands with distinctive qualities.

“These patents have gotten a lot more valuable because they’ve reached past the commodity level,” Paul Swanson, a patent expert in Seattle, told me. “Driscoll’s has a huge plant patent portfolio, and it wants to make sure that what it has doesn’t become part of the public domain.”

The Driscoll’s case makes many strawberry growers uneasy because it threatens to reopen wounds among the industry’s most important participants that they thought finally had been sutured up. Many have declined to comment on the case beyond uttering anodyne words such as these from the California Strawberry Commission, which represents growers, shippers and processors: “The commission looks forward to the resolution of strawberry plant breeding disputes: the ongoing success of all breeding programs supports the success of California’s strawberry farmers.”

That reflects the complex interactions of all the parties with an interest in the litigation. UC is the leading source of strawberry varieties publicly available for sale to growers; CBC is perhaps the leading private developer of varieties for the same buyers; and Driscoll’s is the largest developer of “proprietary” varieties, which growers can use only if they pay stiff royalties and commissions and agree to market their produce under the Driscoll’s brand.

UC’s strawberry breeding program dates from the 1930s, when it was created as part of the public university’s charge to support California agriculture. After Shaw took over in 1990, patents on strawberry varieties created by him and Larson became among the most profitable in UC’s portfolio, bringing in about $7 million a year — about $100 million total during Shaw’s tenure — of which about $2 million a year flowed to the scientists.

Things turned bitter between the university and the scientists in 2011, when they announced their intention of retiring. That triggered a battle over ownership of cultivars that Shaw and Larson had developed at UC but not yet patented.

A rumor emerged that UC was planning to shut the breeding program down when the two scientists retired; the university denied it and accused Shaw and Larson of spreading the rumor themselves to drum up business for California Berry Cultivars, their firm.

The university hired a new breeder, Steven Knapp, and discovered that Shaw and Larson had taken reams of crucial documentation with them when they left, and that they refused to turn it over to Knapp. (Shaw didn’t reply to messages left at his home, and Larson couldn’t be reached.)

The university sued the scientists and CBC in federal court in 2016. The following year, a jury ruled that the plants unquestionably were UC’s property and Shaw and Larson had infringed its rights.

But Chhabria wasn’t satisfied. As soon as the jurors filed out of his courtroom, he told the parties, “Both sides are to blame for this dispute.” Although the scientists had acted badly by absconding with their plants, he said, the university hadn’t shown that it cared much about the program until it was forced to go to court.

“Both sides profess to care a great deal about strawberries,” Chhabria said. But if they really cared, he concluded, they “would figure out a way … to avoid subjecting them to this custody battle.”

The two sides duly reached a deal. Shaw and Larson acknowledged UC’s ownership of the cultivars and got the right to continue breeding with them, sharing revenue from the products and paying royalties where appropriate. They also agreed to pay $2.5 million to UC, to be taken out of their share of the gains as the strawberry varieties made it into the market.

But the lawsuit harbored a ticking time bomb: Breeding records produced by CBC in discovery bore the name of four Driscoll’s strawberry varieties. That led to the new lawsuit, in which Driscoll’s says there’s no way CBC could have gotten its hands on those varieties, except illegally. CBC hasn’t yet formally responded to the Driscoll’s lawsuit or acknowledged its accusations.

As I reported at the time of the original trial, independent growers feel they need both UC and CBC to function as a counterweight to big breeders such as Driscoll’s, lest they become “captive growers” to the big agribusinesses. CBC suggested during the UC case that the university and the “proprietary” growers (i.e., Driscoll’s) were in cahoots in the legal attack on Shaw because “those growers did not want competition from Shaw at UC, or at CBC after his retirement.”

CBC has hinted that the same motivation may lurk behind the Driscoll’s lawsuit, but Driscoll’s says its motivation is straightforward: “The reason for this suit is that Driscoll’s, like UC, is a victim of CBC’s intellectual property theft,” its general counsel, Tom O’Brien, told me in an email. “Driscoll’s is not associated with UC in this lawsuit.”

The chief fear strawberry growers have about the Driscoll’s lawsuit is that it will interrupt efforts to build a better berry. Knapp, the head of the breeding program at UC Davis, recalls that when he came on board during the last round of litigation, his work was hampered by “these really horrific legal questions that were looming.”

Although his superiors at Davis instructed him to carry on normally, no one could be sure until the jury and judge weighed in that “we might get two or three years down the road and we’d have to go backwards” because a verdict had gone against the university. After the lawsuit, he says, the program had to undergo a “restart.”

UC isn’t affected by the Driscoll’s lawsuit — it’s not a party to the case, and the conduct of its breeding program isn’t at issue. But questions are again swirling around the ability of California Berry Cultivars to weather this new storm — and for many growers it’s almost as important a player as the university. “We thought we had put all this behind us,” Kawamura says. “The most important thing is we still focused on moving forward to create a great strawberry.”

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