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After almost six years practicing as an intellectual property (IP) attorney at Baker & McKenzie in Dallas, I returned home to work for our family farm in Charleston, Missouri this spring. Moreton Partnership is a 5,000 acre corn, wheat, and soybean row crop operation located along the Mississippi River in Southeast Missouri. My great-grandfather Carleton Moreton started farming in this area in the 1930s, and now I am the fourth generation of Moreton to farm. One of the first things I noticed after returning home is the vast amount of unprotected data that a modern farm generates—data that needs to be protected and legally attributed as the farm’s intellectual property. In any other industry, this would’ve happened years ago.

A farm’s IP is much more difficult to define – and therefore value – than IP in other industries, or even other IP within the agricultural industry, which I believe is part of the reason that farms have been slow to protect their IP. Equipment manufacturers such as John Deere or Case IH can protect their new machinery and designs with utility and design patents. Seed companies such as Pioneer can protect newly developed plant varieties with plant patents. But these protections are not available to farms.
A farm’s primary business is not designing and selling new equipment or developing new seed varieties, or even differentiating its grains from those of its neighbors. It is growing and selling plants that are inherently similar and by definition, commodities. But growing and selling crops successfully requires a lot of institutional knowledge and data to make the right decisions – more often that not on-the-spot. How do you measure and place a value on this? On a farm’s best practices and processes, most of which are result of multiple generations passing down knowledge on the land?
Practically every piece of equipment that a modern farm uses generates data. When a seed was planted, what was the weather at the time, the soil temperature, fertilizers used, when it was irrigated – these are just a few examples of information that is generated and collected as a result of a few decisions. All of these data points can be correlated with the crop’s yield, and if collected year after year, all of the sudden you can get a pretty specific understanding of what works best on a particular field.
It’s time for farms to begin thinking of the data that is generated and collected on their farms every day as their own IP. It is not a matter of being forward-thinking, it’s about competing in an environment where every single dollar counts and where a detailed, accurate farm P&L can mean better terms on a loan.
The key to protecting (and subsequently valuing), a farm’s IP is ensuring a) the exclusive ownership of any agronomic, financial, and operational data collected on the farm and b) the easy access to organized, accurate data. Exclusivity is the only way in which we’ll be able to monetize our IP if we want to sell it (and exclusivity ensures that this choice is the farm’s and farm’s alone). It shouldn’t be owned by the equipment manufacturers, the seed companies, or even the software companies that help capture it. But before we can commercialize our farm’s information, we need the technology – and discipline – to collect and organize it. Gone are the days of writing notes on pieces of paper that are later lost, or saying “it’s all up in my head.”
It’s up to us, farmers, to understand data policies and to choose to work with companies we trust and have researched thoroughly. It’s our data, and we stand to benefit from it in numerous ways. It may not be as shiny as a new combine or as imposing as a couple hundred acres of land, but it’s just as valuable, if not more.

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Historically, debates about intellectual property (IP) on the farm have centered around the use and licensing of genetic traits, and the companies that own them.  New ag hardware and software tools have quickly expanded the concept the IP on a farm. Sensor technology, equipment-based data, and farm management software are creating a whole new class of agricultural IP: data and knowledge regarding the farm itself.

In other industries, this is nothing new.  Intellectual property, which typically includes trade secrets, custom processes, patents, and trademarks, has always been regarded as an intangible asset that adds real value to a business, even in industries that are considered commoditized. The value of IP can often be hard to measure, but it can be conceptually thought of as value above and beyond the “hard assets” of a business.  For example, if you sold your farm and the purchase price was simply the sum of the value of your hard assets (land, equipment, buildings, etc.), then clearly no value is being placed on the IP generated by the operation.  When I ask farmers about how they think of the value of their business, they almost always still think of it as the “sum of the parts,” with parts being something you can touch, feel, and see.
Figure 1 (2)
What is keeping farmers from doubling the value of their businesses through IP?  Building business value through IP requires an investment, and farms (even large, professional farms) have historically invested very little into the right tools that would help them develop, document, and share their IP.  Figure 2 below shows how much some comparable industries spend annually on IT, a good proxy for the tools that allow business managers to create and capture IP, as a fraction of their total revenue.  To put these numbers in perspective, spending 1.5% of revenue on IT for a farm growing commercial corn ($4/ bushel and 200 bu/acre) equates to spending $12 per acre – a number that would make most farmers laugh.
Figure 2 (2)
While some farms are investing in these areas, it is not yet the norm.  As more data continues to stream off the farm, those that can capture it, analyze it, and make these learnings proprietary will use their labor more productively, utilize their equipment more efficiently, and make more data-driven decisions (a topic at the heart of Danny Klinefelter’s Principles for Effective Farms).  A robust IT system has the potential to directly increase profit via lower input costs, lower borrowing costs, and higher revenue from more effective crop marketing plans, building real value in a business in an increasingly competitive industry.
 

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