Distribution of Royalty Income Procedure

Basis for Procedure

Pursuant to Section (e) of SUNY’s 2016 Patents and Inventions Policy ("Policy"), Inventors and/or Creators of Intellectual Property that is disclosed to The State University of New York ("SUNY") on or after November 23, 2016 are entitled to receive a portion of the Net Royalty resulting from the management and licensing of that Intellectual Property.

Procedure Summary

This procedure outlines the steps an administrator will use to determine if a Royalty distribution should be made pursuant to the Policy, and the steps an administrator will use to process Royalty distributions to Inventors and/or Creators of Intellectual Property disclosed on or after November 23, 2016. This procedure applies to all transactions involving campus Royalty awards, Royalty receipts and payments received from third parties related to the commercialization of Intellectual Property.

The Policy enables campuses to subtract 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. These expenditure types are further defined in the RF’s Policy for the Distribution of Royalty Income.

Section (e) of the Policy shall not govern the distribution of income related to Intellectual Property that was disclosed prior to November 23, 2016. Royalty income resulting from Intellectual Property that was disclosed prior to November 23, 2016 shall be distributed in accordance with the SUNY Patents and Inventions Policy that was effective prior to November 23, 2016 ("Former Policy"). Further, as articulated in the Former Policy, 40 percent of the gross Royalty paid to SUNY shall be distributed to the Inventor(s) and 60 percent of the gross Royalty paid will go to the campus at which the Intellectual Property was developed.

Procedure Steps

The table below outlines the steps an administrator will take to: (1) determine if royalties should be distributed, and (2) how to process a distribution if one should be made.

Related Information

Royalty Receipts

If a royalty check is received at Central Office, the Finance Office at Central Office will work with the Office of Innovation & Partnerships to identify which campus the royalty payment belongs to and then post the payment to the appropriate royalty award (see chart below). If a check is received at a campus location, the campus must either forward the check to Central Office or deposit the check with campus daily deposits. If the check is deposited at the campus, the campus must notify the Finance Office at Central Office that the royalty has been included as part of the day's deposit.

The installment for the campus’ royalty award will be increased by Central Office by the total amount of the royalty receipt. With direction from the appropriate campus administrator, Central Office will split the funding between the appropriate projects (i.e. campus and inventor projects), if applicable, and then Central office will then increase the project budget(s) accordingly.

How Inventors are Paid

Payments to the Inventors and/or Creators should be drawn out of the campus royalty project or inventor royalty project (if it exists), by an authorized campus administrator. Royalty checks will be mailed directly to the Inventor(s) or Creator(s), whichever applies. Recipients of Royalty checks are sent either a 1099-MISC tax statement or 1042-S tax statement depending on the recipient’s citizenship. United States citizens and resident aliens will receive a 1099-MISC statement, and nonresident aliens will receive a 1042-S tax statement.

Recapture of Expenses from the Commercialization of Released Technologies

In addition to ten (10) percent of proceeds SUNY would receive if a release is granted pursuant to Section (f)(3) of the Policy, campuses may require that Inventor(s) or Creator(s) of Intellectual Property reimburse any of the allowable deductions articulated in the RF’s Policy for the Distribution of Royalty Income (link). As noted in the Policy, any ambiguity involving the eligibility or allowability of these deductions must be referred to RF Central Office, with ultimate responsibility for resolution resting with the RF President who may, in his or her sole discretion, refer the matter to the SUNY Innovation Policy Board.

Revenue Received from the Commercialization of TAF-supported Intellectual Property

Pursuant to TAF program guidelines and TAF award funding agreements campuses are required to pay ten (10) percent of the gross revenue received by the campus from the licensing or other commercialization of TAF-supported intellectual property to the TAF. When providing details to Central Office regarding the appropriate royalty split the campus administrator will also instruct Central Office to increase the budget on the RF Central Office – TAF Income award by the appropriate amount. The RF’s TAF Managing Director will be notified when any changes to the RF Central Office – TAF Income award are made by emailing TAF@rfsuny.org.

Campus Royalty Awards

Campuses that are receiving income from third parties for their commercialization of intellectual property have one royalty award assigned to them (see below). Unless otherwise requested, each campus royalty award has two projects: one for the Inventor(s) and/or Creator(s) share of Royalty revenue and one for the campus' share of Royalty.

Royalty Award and Project Numbers

The following table lists the award and project numbers established for campuses actively receiving royalty payments from licensees.

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.

Related Information

RF’s Policy for the Distribution of Royalty Income

SUNY Patents and Inventions Policy

Forms

RF Technology Transfer Check Request

W-9

W-8BEN

Change History

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