Royalty Collection for Patented Livestock
Lesser, William H.
Allowing animal patents provides potential benefits and costs for livestock producers. Costs, considered here, are royalty payments and collection mechanisms, made more complex by the unknown future distribution of multiple patented traits in the herd. This article evaluates three proposed collection systems, Qualified Sales, registration and pooled royalties. The first two are imposed only on breeding stock and at first sale, creating a cash flow and risk factor for producers. The third collects payments from all animals at point of slaughter, based on traits in a sample. It favors producers at the cost of delayed payments to the patent holders. The eventual system used will depend on the cost and speed of testing for patented traits.
A.E. Res. 93-10
Charles H. Dyson School of Applied Economics and Management, Cornell University