Distribution of Royalty Income Policy

Reason for Policy

On November 23, 2016, The State University of New York ("SUNY") published its Patents and Inventions Policy ("Policy") superseding SUNY’s former Patents and Invention Policy ("Former Policy") that had been in place at SUNY for more than 30 years. Both policies require that SUNY share Royalty with Inventor(s) and/or Creator(s). However, different Royalty disbursement rates will apply depending on the date the Intellectual Property is disclosed and the amount of Royalty that is received. This Policy for the Distribution of Royalty Income establishes the framework that The Research Foundation for The State University of New York ("RF") will follow to ensure compliance with both the Policy and the Former Policy.

Statement of Policy

Any Royalty resulting from the licensing of Intellectual Property ("IP") that is assigned to RF on behalf of SUNY shall be shared with the Inventor(s) or Creator(s), consistent with the policy of SUNY in effect at the time of the disclosure of the IP to the RF. Specifically, disclosures received before November 23, 2016 are subject to the Former Policy, and disclosures received on or after November 23, 2016 are subject to the Policy.

RF Operations Managers and their delegates¹ are entrusted with delegated authority to process and/or approve Royalty distributions to Creators and Inventors. Pursuant to Section (e) of the Policy, campuses can deduct reasonable out-of-pocket expenses incurred but not reimbursed by licensees for the evaluation, marketing, development, protection, maintenance, and enforcement of Intellectual Property from Royalty prior to making distributions to Inventors or Creators. In calculating Net Royalty, Operations Managers are required to exercise due diligence and fair business judgment, balancing the interest of the campus and the Inventor(s) or Creator(s) in every case. Any ambiguity as to whether an expense is allowable for deduction shall be submitted to the RF President who may, in his or her sole discretion, refer the matter to SUNY’s Innovation Policy Board for resolution.

Section (e)(2) of the Policy provides variable distribution rates for Royalty generated from computer software and Intellectual Property other than Patentable Inventions. Operations Managers must ensure that any campus policy that provides a distribution rate for Royalty generated from computer software and Intellectual Property other than Patentable Inventions is compliant with Section (e)(2) of the Policy.

Royalty disbursements will be made only to those individuals that are identified as an Inventor or Creator in the IP disclosure form on record in the technology transfer office ("TTO") on the date the income is received by RF. The amount of the Royalty disbursement will be determined from the allocation specified in the disclosure, unless the Inventor(s) or Creator(s) execute a royalty sharing agreement that is filed with the TTO to supersede the allocation rate that is specified in the disclosure.

The steps required to disburse Net Royalty payments to Creators or Inventors are included in the Procedure for the Distribution of Royalty Income that accompanies this policy.

¹A reference to an RF Operations Manager in this Policy for the Distribution of Royalty Income shall also include any individual with delegated authority to act on behalf of an RF Operations Manager.

The following table illustrates the applicable distribution rates for Royalty resulting from disclosures received on or after November 23, 2016 as prescribed by the Policy:

Disclosure Received On or After November 23, 2016:

To apply the foregoing rates effectively, Operations Managers must first calculate the Net Royalty subject to disbursement in accordance with the following schedule and using the specified Oracle Expenditure Types. Only expenses recorded using the Oracle Expenditure Types specified below are allowable for deduction.

The following table illustrates the applicable distribution rates for Royalty received in connection with disclosures received prior to November 23, 2016 as prescribed by the former Policy:

Disclosure Received Prior to November 23, 2016:

Responsibilities

The following table outlines the responsibilities for compliance with this policy.

Definitions

Created – Having conceived, authored, reduced to practice, designed, developed, or otherwise having contributed to the making of Intellectual Property.

Creator – One who has Created Intellectual Property, in whole or in part.

Intellectual Property – Patentable Inventions, tangible research materials, computer software, and any unique or novel innovation in the technical arts or any new and useful improvements thereof, including methods or processes for creating an object or result (a way of doing or making things), machines, devices, products of manufacture, product designs, or composition, mask works or layout designs for printed circuit boards or integrated circuits, compositions of matter, materials, any variety of plant, and any know-how essential to the practice or enablement of such innovations and improvements, whether or not patentable.

Inventor – One who contributes to the conception of a Patentable Invention under the patent laws of the United States or other relevant jurisdiction.

Net Royalty – Royalty less reasonable out-of-pocket expenses incurred by SUNY and not reimbursed by licensees for the evaluation, marketing, development, protection, maintenance, and enforcement of Intellectual Property.

Patentable Invention – Any art or process (way of doing or making things), machine, manufacture, design, or composition of matter, or any new and useful improvement thereof, or any variety of plant which is or may be patentable under the patent laws of the United States or other relevant jurisdiction, and the patent applications or patents that embody them.

Royalty – Cash, equity, or other value received by SUNY as consideration for use of rights to SUNY Intellectual Property.

Technology Readiness Level – A method of estimating technology maturity from basic technology research to product launch or operations, which typically utilizing a numerical scale of one to nine.

Related Information

SUNY Patents and Inventions Policy

RF Intellectual Property Policy

RF Procedure for the Distribution of Royalty Income

Forms

None

Change History

Feedback
Was this document clear and easy to follow? Please send your feedback to webfeedback@rfsuny.org.

Copyright © 2012 The Research Foundation for The State University of New York