Summary of Patent Income Distribution Changes

I. Main change for inventors

Change in options for equity management:

1. The inventor may elect to have their allocation of equity in the licensee (“Inventor’s Shares”) distributed to them as soon as practicable following execution of the license. In this case, it shall be the sole responsibility of the inventor to manage the shares and to comply with any tax, legal or contractual obligations associated with their distribution, ownership, and disposition. 
2. The inventor may elect to not have the Inventor’s Shares distributed to them, and instead, to receive proceeds, if any, from disposition of such Inventor’s Shares that will continue to be owned and held by the University.  In the ordinary course, the University intends to hold and dispose of the Inventor’s Shares in the same manner as the rest of its equity in the licensee and, upon a sale of the Inventor’s Shares for cash, distribute to the inventors their allocation of the proceeds in accordance with the Patent Income allocation described in R.P.H. 9.1 as any deferred income.

* Note that in certain circumstances, an inventor may have a conflict of interest with respect to the expected licensee and may request to not receive their allocation of equity in the licensee or proceeds from the disposition of such equity.  In such cases, an inventor may disclaim any interest in equity and proceeds, by providing written notification to OTL prior to when the license agreement is executed.

Change in options for departmental share allocation:

Inventors are able to designate some or all of their associated departmental share, based on support of the work, to a VPDOR-directed Independent labs, centers and institutes, or a research institute under their school subject to approval from the cognizant dean responsible for that institute.

II. Main change for departments

Change in allocated % of shares for royalties and equity depending on the income amount:

1. For royalties allocation: % allocation decreased from previous 33.33% to 24.66% for tier 1 (<=$3M), 14.66% for tier 2 (>$3M).
2. For equity allocation: % allocation increased from previous 0% to 24.66% for tier 1 (<=$3M), 14.66% for tier 2 (>$3M).

III. Main change for schools

Change in allocated % of shares for royalties and equity depending on the income amount:

1. For royalties allocation: % allocation decreased from previous 33% to 21% for tier 1 (<=$3M), 26% for tier 2 (>$3M).
2. For equity allocation: % allocation increased from previous 0% to 21% for tier 1 (<=$3M), 26% for tier 2 (>$3M).

IV. Main change for VPDOR

Change in allocated % of shares for royalties and equity depending on the income amount:

1. For royalties’ allocation: % allocation changed from specific scenarios to a general rule 21% for tier 1 (<=$3M), 26% for tier 2 (>$3M).
2. For equity allocation: % allocation decreased from previous 66.7% to 21% for tier 1 (<=$3M), 26% for tier 2 (>$3M).