The courtroom has become almost as important as the laboratory for companies developing commercial products from biotechnological advancements.
The battle in the past few years between two companies producing lucrative sexed semen is an example of how legal issues can slow the adoption of science for the market.
ABS Australia launched its new sexed semen product Sexcel at International Dairy Week in January.
The sexed genetics brand manager for the company’s global arm Olivier Hiers said its product launch was delayed for two years by a legal battle with Inguran, trading as Sexing Technology.
ST was the pioneer of commercial sexed semen more than a decade ago.
Its technology uses a machine to apply fluorescent dye to sperm cells; the female X chromosomes contain more DNA so are brighter than the male Y cells.
The dyed cells then flow past a laser beam that detects the amount of fluorescence and applies an electrical charge that deflects the cells into different containers.
The ABS technology also applies fluorescent dye to identify the X and Y cells.
But its premise is based on ‘not touching’ the valuable X cell.
So the technology ‘cuts’ the Y cells, rendering them useless.
The legal battle between the companies was based around two separate actions.
ABS filed an antitrust lawsuit accusing ST of monopolising the market, while ST counter-sued over patent infringements.
After a lengthy trial, a jury last year found ST had “wilfully maintained” a monopoly in the market since 2012, clearing the way for ABS to take its product to market.
But ABS was required to pay upfront patent payments of $US500,000 and $US750,000 and ongoing royalties of $US1.25 and $US0.50/straw to ST.
Mr Hiers said biotechnology companies, such as Genus ABS, needed to equip themselves to understand the legal implications.
Companies needed specialists in IP (intellectual property), so they could identify whether their research and products were worth seeking a patent for or not.
The legal team also needed to advise on contract negotiations.
Sexcel’s launch was also delayed because it had a contract with ST to produce a minimum amount of sexed semen until the end of August 2017.
"You have to equip yourself to know," Mr Hiers said.
The legal battle was the final step in a long process for ABS in developing its technology.
Mr Hiers said a key for research and development was identifying something in the lab that would work on a big scale for commercial application.
ABS’s sexing technology is also different in that the dead Y sperm and other debris remain in the semen straw.
So it needed to present it to the scientific community, specifically the International Committee for Animal Recording, for approval.
"We knew the technology was different, so the first thing we knew could be a challenge was the debris in the straw,” he said.
The product then needed to be tested in the field.
The company put 12,000 units into trials throughout the world across a year.
These were then compared with results from the company’s database for conventional semen and other sexed semen.
Sexcel achieved a 90 per cent relative conception rate compared with conventional semen and a higher rate than other sexed semen.
Sexed semen offers gains for beef and dairy ABS Australia sees its new sexed semen product Sexcel offering gains for both the beef and dairy industries.
The company’s general manager Australia and New Zealand James Smallwood said Sexcel had already been launched in a number of markets globally and customers had “embraced the technology wholeheartedly”.
"We have seen demand for the product outstripping even our wildest expectations," he said.
For dairy farmers, the product promises more heifer calves from the highest genetic merit animals in the herd, as it is recommended for use on maiden heifers.
This provides the opportunity to either retain heifers for herd building or to sell excess heifers either to other farmers or for export.
It also means fewer male calves, which are an increasing animal welfare concern.
Higher numbers of heifers also provide the option for farmers to put beef across their older or lower performing cows, providing an additional income stream.
Mr Smallwood said ABS had been an earlier adopter of genomic technology, in which breeding values were calculated from the results of a DNA test, particularly in having its genetics tested on the Australian system.
“So we could identify elite genetics that worked well in the Australian market,” he said.
”These superior genetics are now available in sexed semen in Sexcel, so will allow faster gain.”
ABS’s beef key account manager southern region Fletch Kelly said sexed semen also offered opportunities to beef producers.
Strong beef prices in the past 12-18 months had seen many beef producers take the opportunity to offload older lines of cows.
Sexed semen offered these producers a means to quickly rebuild their maternal lines.
Although demand would not be as strong as in the dairy industry, Mr Kelly said he expected to see demand for bulls with strong maternal traits such as Angus sire Te Mania Emperor.
Seed stock producers might want to produce a strong female line from that bull.
Mr Kelly said ABS planned to launch a special beef semen product for dairy farmers later this year.
Each straw of Dairy InFocus contained semen from three different Angus bulls.
These were selected for their positive traits for the dairy cow, such as fertility, shorter gestation and increased calving ease, and their positive traits for producing an efficient beef animal, such as health, growth rate, feed efficiency and carcase merit.
The beef animals could be turned off earlier than a Holstein and had a higher percentage of Angus-certified prime cuts.
Mr Kelly said the product had been successful in the United States.
It would allow dairy farmers to sell young calves to beef producers at a premium to the price paid for Holstein calves or to rear the beef calves for an additional income stream.
ABS plans to run trials of the product in NSW with a feedlotter and meat processor.
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