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Leachman patent lawsuit stirs debate at BIF

Progressive Cattleman Editor David Cooper Published on 12 July 2014

A civil lawsuit filed in April by Leachman Cattle of Colorado and Verified Beef against the American Simmental Association (ASA) sparked new debate at the Beef Improvement Federation (BIF) Symposium held June 19, in Lincoln, Nebraska.

The Leachman/Verified Beef lawsuit alleges patent infringement by ASA with its development of a cattle value calculator similar to one used by the plaintiffs. Discussion of the lawsuit at BIF led to a resolution, introduced by the National Association of Animal Breeders (NAAB), opposing what it called Leachman’s patented use of “publicly available and widely utilized technologies” used for many years among various breed associations and seedstock programs.

The resolution was sent to the BIF board, where it was held for further consideration.

In the April 11 lawsuit, Leachman and Verified Beef argue they “pioneered the concept of determining the relative economic value of a group of existing commercial calves and reporting that value to the owners and potential buyers of that group.”

Leachman and Verified Beef, an age-and-source verification company from Bozeman, Montana, claim its technology led to the creation of their Reputation Feeder Cattle and Genetic Merit Scorecard programs, which preceded ASA’s Feeder Profit Calculator.

The lawsuit claims Leachman and Verified Beef met with ASA in early 2013 to discuss possible ways to jointly utilize the technology. The plaintiffs said they entered a non-disclosure agreement on the technology, with the agreement that ASA expressed no intent of pursuing a feeder calf valuation program of its own. 

Leachman and Verified Beef received their patent on Feb. 25, 2014, giving them patented rights on the computer-implemented tool to determine relative market value on calves, using genetic merit and other non-genetic factors. The court document says that when Leachman learned ASA’s Feeder Profit Calculator was being developed, it began its challenge in the courts.

Wade Shafer, ASA executive vice president, says the lawsuit is merely a strategy to stop ASA from petitioning the Leachman patent. Shafer says the research used to create the Feeder Profit Calculator came from the public domain. He said the ASA calculator was developed with indexes from Dr. Mike MacNeil of USDA in 2005 and more recent applications from Dr. David Lalman of Oklahoma State University utilizing management factors.

Shafer added that while the two calculators have their own inputs such as costs and genetic levels, the core methodology used by the calculators – including others used by other breeds – has been publicly available for many years.

“The thought this could be patented is incomprehensible to those of us in the animal breeding community,” he said. “The bottom line is this stuff is not new or novel; it’s something we’ve all been doing for many decades.”

Shafer said the association intends to challenge the patent within the time frame allowed under U.S. patent law. “We feel it’s incumbent upon us to fight this. In the long run, having someone with a monopoly on technology we’ve been using for decades is very unhealthy for the industry.”

Leachman and Verified Beef dispute the notion that the patent creates a monopoly preventing genetic prediction by breed associations.

“Our patent does not, in any way, keep a breed association from estimating EPDs or indexes on individual breeding cattle,” the companies said in a May joint statement.

The patented technology, the statement said, “uses association EPDs on a rancher’s historical bull battery through a novel and sophisticated process to predict the genetic merit of a group of commercial calves in comparison to the national average.”

Leachman added that in granting the patent, the U.S. Patent Office “extensively researched other previous efforts, in addition to these breed association efforts, to see if our ideas were unique.”

“The core of what was innovated and patented was the prediction of the relative market price on a group of feeder calves,” he said. “To this point the patent office issued us the patent because there was no prior art, no one had done this before.”

Joe Cassady, executive director for the BIF, said the resolution was brought forward in a BIF open committee meeting by NAAB, which is a BIF board member consisting of bull sire companies.

Lee Leachman and the American Simmental Association are also voting board members of the BIF, according to Cassady.

In committee, the resolution passed on a roll call vote, advancing it to the full BIF board for consideration. 

“The BIF board took action in that they formed a committee to study this further, but they did not vote, and therefore the resolution is not official policy at this time,” Cassady said.

The formed committee is expected to report back to the board at BIF’s mid-year meeting in October.  end mark