The Value of Licensing

By K. Randall 12/10/2009

The 2009 annual Corn, Sorghum and Soybean Research Conference and Seed Expo in Chicago gathered together hundreds of seed industry representatives and companies. The seed companies represented at the conference varied widely, ranging from very small family owned seed companies to much larger corporations. But in an industry that sees millions of dollars spent on research and product development how does a smaller seed company stay competitive in the market?

One word - Licensing.

Licensing is fairly common in the seed industry. Monsanto broadly licenses its germplasm and traits as do other larger companies such as Syngenta and DuPont. Licensing allows other seed companies access to the latest and most innovative products on the market and to sell those products under their own brands.

“Licensing allows me to take advantage of the huge product line Monsanto offers and custom-tailor that to my customers and my geographic areas,” Fred Pond, Advanced Genetics, said. “I pick the products that work well in my soils and in my environment - the maturities that my customers want, the harvest ability and yield.”

Licensing is about building relationships and partnerships that put the farmer first, working together to get the farmer the products that work best for them. Many companies, including Monsanto, even license their technology to competitors as well as collaborating on products together. For example, Monsanto and Dow AgroSciences, worked together to develop the product Genuity™ SmartStax™. Genuity™ SmartStax™ is a stack of traits developed from both companies. By working together, Monsanto and Dow were able to quickly meet the demand of farmers for this type of product.

Licensing comes down to getting the best seed to the farmer.

“We have our own seed brand, and we have to be able to get those traits and genetics from some place,” Matt Hynes, sales marketing manager at GROWMARK, said. “So we work with Corn States to help us uncover and take a look at the genetics and how they are performing, as well as the traits that will help our farmer owners do what they do best.”

As the industry continues to grow, the importance of licensing will only become stronger.

“I see [licensing] growing more and more important as we move forward with all the different traits, particularly with the genetics and how quickly they are advancing,” Hynes said about the future of licensing. “It’s about how we continue to determine what we need to have and how quickly that product needs to come to market.”