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Associated Press, Published October 21 2013

NDSU Research Foundation sues SD seed dealer over royalties

BROOKINGS, S.D. — The North Dakota State University Research Foundation is suing a seed dealer in the South Dakota city of Brookings for royalties it says it is owed for oat seed sales.

The foundation claims that Jeff Muckey of Sexauer Discount Farm Services and others violated federal law by selling patented seed varieties without paying the royalties. The lawsuit seeks unspecified money damages.

The lawsuit accuses Muckey of buying an oat variety called "Souris" from unnamed farmers and reselling it for planting without authorization from the foundation, which collects royalties on behalf of the university in Fargo. It also targets between one and 25 so-called "John Doe" defendants, who are accused of illegally selling the seed to Muckey.

Aaron Emerson, the Sioux Falls lawyer representing Muckey, declined to comment on the case to the Argus Leader newspaper.

The federal Plant Variety Protection Act gives developers royalty rights for seed sales. The lawsuit against Muckey says Sexauer regularly bypassed the law.

NDSU creates and markets wheat, oat, potato and bean seeds, said Dale Zetocha, executive director of the research foundation. The foundation then funnels that money back into research.

"There's a significant investment in creating new varieties for the future," Zetocha said. "It's a competitive world out there, and farmers need these high-yield varieties to keep up."

The lawsuit is the second filed in federal court in South Dakota through the Farmer's Yield Initiative, a consortium of research universities that works to educate farmers about protected seed varieties and investigates claims of patent infringement. A Platte man settled with South Dakota State University for $75,000 in 2011 for reselling that school's oats without paying royalties.

Mark Henry, a lawyer with the initiative, said most cases come to light through tips from the public.

"When people in the community are upset about something, they give us a call and we quietly investigate," he said.

Initiative members would rather reach a settlement that stops the sale of protected seed than file a lawsuit, but not all sellers are receptive to that, Henry said.