Texas horse breeders take clone battle to court

AMARILLO, Texas (AP) -- The nation's pre-eminent quarter horse association, trying hard to safeguard a prestigious registry that adds financial value to listed animals, faced off in court Wednesday against two breeders who claim the organization is wrongly excluding clones and want the technology to join a long line of others the group already allows.

Since 1960 the American Quarter Horse Association has registered animals born through means other than natural, Nancy Stone, one of the attorneys representing two breeders suing to have clones registered, said. Those means include artificial insemination, frozen semen and cooled semen, an attorney for the association said.

The association "let the horse out the door," she said about the group registering quarter horses born through other technologies.

Testimony began Wednesday afternoon in the 2012 lawsuit filed by two breeders, Panhandle rancher Jason Abraham and Amarillo veterinarian Gregg Veneklasen, who own cloned quarter horses or offspring and want the animals registered with the 280,000-member organization.

The case is being closely watched by other U.S. horse-breeding groups because it could set a precedent. No U.S. horse-breeder group allows clones to be registered. Breeders worldwide could be affected because semen could be transported to other countries, though some international laws might not allow the use of clones, said Billy Smith, a spokesman for the American Paint Horse Association.

It costs about $150,000 to clone an quarter horse, association lawyer Wade Arnold said in his opening comments. But to register a horse the animal must come from a registered mother and a father.

In "cloning you don't have that," he told jurors. "That is the fundamental rule of our association and it has been since 1940."

He told jurors that Abraham, Veneklasen and others interested in cloning quarter horses could start their own organization and set their own rules like the quarter horse association does.

AQHA members "ought to have the right to make their own rules, if those rules are reasonable and lawful," he said.

AQHA has denied antitrust allegations and says its rules promote competition.

Stone disagreed, saying there is a reduced supply of elite quarter horses because of the rule that excludes clones, which means the value of those remaining is higher. The association wants to keep it that way and continue monopolizing the market, she said.

"Registration is absolutely essential for a quarter horse to be worth anything," Stone said. The association "is holding these (cloned) horses and their offspring to a higher standard than horses born" through other technologies.

The breeders are seeking $6 million in damages, Arnold said. But the breeders stand to make plenty of money with the technology to clone quarter horses if the rule prohibiting clones is changed, he said.

One of the plaintiffs would get 10 percent of the royalties from a company with a patent on the quarter horse cloning technology, Arnold said.

"This is about money," he said. "It's not just about the rule."

A survey to 3,000 quarter horse members a few years ago showed that 86 percent were opposed to registering clones, Arnold said.

Ron Nickum, also representing the breeders, countered that only 1,000 were returned and of those 13 percent were in favor.

"Even if the membership of an entity wants to do something and it's illegal . . . the entity cannot be excused from violating the law."

In 2002, the AQHA reached an out-of-court settlement that allowed horse breeders to register embryo-transfer foals. The settlement came after several horse breeders sued the group, alleging that the association would not register numerous superiorly bred, embryo-transfer horses — a rule that devalued their horses.

By transferring embryos from one mare to a surrogate, a breeder can produce multiple foals per year, but only one foal was eligible for AQHA registration each year before the settlement.