Why are Irish AI companies putting IP on their bulls?

The move by the four biggest AI companies in Ireland – Munster Bovine, Eurogene, Progressive Genetics and Dovea – to put intellectual property rights on their bulls is a defensive action to prevent domestic or foreign AI companies from using ‘Irish’ genetics in their breeding programme.

How will it work?

The DNA certificate or the genotype will be used as the genetic marker on which the IP is attached to. The AI companies will select which of their AI bulls will be IP protected each season but the indication is that this spring, most of the young genomic bulls available for the first time this year will be IP protected.

Will AI companies still purchase calves from sires of other AI companies?

Yes, each of the four AI companies have committed to signing cross-licensing agreements meaning that they can continue to purchase calves that have been bred from bulls standing at different studs. So if a farmer has, lets say a €400 EBI bull calf from one company, they can sell that calf to the highest bidder within the four AI companies that are part of the agreement. However, they still need permission from the company that holds the IP to sell to a different AI company.

What happens if the cross-licensing agreement breaks down?

In theory, any one of the AI companies could decide that they have the best bulls in the country and will no longer allow the progeny from their IP protected bulls be sold to their competitors. If that happens widespread, the AI companies would only be able to breed from within their own gene pool and national genetic progress would undoubtedly slow down. AI companies have said that this is not within their interests so is unlikely to happen.

What about other Irish AI companies?

The two biggest players that are so far excluded from the gang of four are Dunmasc Genetics and Bova AI. Both are smaller operators and more specialised in beef but Bova has a sizeable grass-based dairy business through its partnership with the Forge group of farmers.

It is highly likely that IP will also be put on beef bulls suitable for use on the dairy herd. In many ways some of these bulls are more valuable to international competitors than dairy bulls as beef traits are universal whereas Irish dairy genetics are specific to grass based systems. The four AI companies have said they are open to cross-licensing agreements with other Irish AI companies.

Who are they defending themselves against?

Undoubtedly, the big threat in the eyes of the AI companies is from US-based Sexing Technologies (ST).

The irony is that three of the four companies are already contracted to ST for sexing services and Eurogene, through its parent company AI Services is building a new sexed semen lab in Co Antrim.

Why would ST be interested in Ireland?

ST has embarked on a major global expansion over the last decade and has moved from just being a sexed semen sorting company to being a major global breeding company.

Together with its partner companies, ST dominates the breeding charts in the US by breeding the highest genetic merit bulls which are most in demand from farmers.

It does this by using the latest available technology such as IVF, artificial intelligence for data analytics, chromosomal mating, sexed semen, embryo transfer and oocyte collection on young heifers.

The investment in technology and resources by ST dwarfs anything that is happening in Ireland, or indeed Europe.

The scale of research and development by ST is well beyond the capacity of most national research agencies globally.

Ireland is another market and by using the resources at its disposal, ST could probably identify easy ways to make very fast genetic gain in EBI and dairy beef.

What’s the downside to that?

The upsides are obvious; access to higher EBI bulls to advance genetic gain. The downsides are loss of control of the breeding programme if foreign, privately owned companies start to dominate the EBI.

Where will breeding costs go at farm level and will the data be shared with ICBF or will they keep the data to themselves for their own gain? EBI itself may be at risk because a foreign company may decide to bring out its own index where farmers have no transparency on the data feeding into it. In other countries, AI companies like ST have very onerous rules on protecting the IP of their progeny which is closely monitored.

Will the move to put IP on bulls stop this from happening?

There is nothing stopping a foreign AI company from purchasing an existing Irish AI company, or indeed buying up males and females without any IP at present.

If a foreign company started supplying bulls into Ireland, the very first thing they would do is ensure their genetics are IP protected, so in some ways the move by the Irish AI companies has made that job easier.

What needs to happen next?

The Irish AI companies have put down a marker by introducing IP. While they take pride in their genetics, it is really the farmers that bred the bulls that should take the pride as they made the breeding decisions behind the bulls.

If we continue as we are, Irish genetics is going to get left behind as the competitiveness of the grass based system will stay in third gear while confinement based systems rev-up in sixth gear. The next step is to engage with the likes of ST to speed up genetic gain while at the same time protecting the hard-earned benefits of the farmer-owned national database.

As mostly farmer-owned and farmer controlled entities, the Irish AI companies may need to collaborate further on this as duplication is too costly.

With sexed semen, the risks to their business are enormous and all over the world we see increased mergers and acquisitions of breeding companies. We are in a new era of dairy breeding which is both exciting and daunting.