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California State Auditor Report Number : 2014-121

University of California, Davis
It Has Not Identified Future Financing for the Strawberry Breeding Program nor Collected All Available Revenues

Figure 1

Roles and Responsibilities of the Various Entities Involved in the Strawberry Breeding Program

Figure 1 is a color-coded organization chart that describes the roles and responsibilities of various entities involved in the strawberry breeding program. Green boxes indicate university entities that are directly involved in the patenting process of new strawberry varieties and provide oversight of the strawberry breeding program. The following entities are coded as green: College of Agricultural and Environmental Sciences, Department of Plant Sciences, Plant Variety Release Committee, Strawberry Breeding Program, and Innovation Access. Red boxes indicate university entities that provide some level of oversight or funding of the strawberry program. The following entities are coded as red: University of California Board of Regents, University of California President, University of California Davis, Office of the Provost, Finance and Resource Management, Accounting and Financial Services, Extramural Funds Accounting, Budget and Institutional Analysis, Administrative Budget and Budget Operations, Office of Research, Sponsored Programs Office, University of California Office of the President, Office of Research and Graduate Studies, Innovation Alliances and Services, and Division of Agriculture and Natural Resources. Blue boxes indicate external entities that provide(d) some level of oversight or funding of the strawberry program. The following entities are coded as blue: California Strawberry Commission, Strawberry Advisory Committee, and Licensed Nurseries and Maser Licensees.

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Figure 2

The Strawberry Breeding Program’s Patent Process

Figure 2, a flowchart describing the strawberry breeding process that ends with breeders determining whether they should disclose a new potentially patentable invention. If the breeders choose to do so it goes through a review and approval process that ends with dean of the College of Agricultural and Environmental Sciences’ approval to release the new variety. If the dean approves the release, Innovation Access files an application for a plant patent and the University of California (university) can enter into licensing agreements with nurseries. Once the plant patent is approved, the university owns the intellectual property for 20 years from the date it filed the patent application. If the breeders decide not to disclose their invention, or the dean decides not to approve the variety for release, then the variety does not progress along the flow chart and a box within the graphic explains that the university owns all tangible property that the breeders produce while working for the university, and the breeders do not have any ownership interest in the strawberry varieties.

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Figure 3

Distribution of Strawberry Breeding Program Patent Income Earned in Fiscal Year 2010–11

Figure 3, a chart that shows that the strawberry breeding program (strawberry program) generated $7 million dollars in patent income in fiscal year 2010-11. The University of California Office of the President’s Innovation Alliances and Services (Alliances and Services) used this income to pay the breeders $2.2 million for their inventor share payments and to cover certain costs, including an estimated $746,881 for net expenses of other UC Davis patents that are subsidized by the strawberry program. Some of the amounts in the figure are estimates because the university does not calculate certain expenses and revenues specifically for the strawberry breeding program. Of that $7 million, Alliances and Services transferred $3.1 million to the University of California, Davis (UC Davis), which it then distributed to various entities and funds on campus. The strawberry program received only $556,849 after most of the patent income was distributed elsewhere.

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