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Royalty Guide

What are royalties?

A royalty is a sum of money paid to a patentee for use of a patent by those who wish to make use of it for the purposes of generating revenue or other such desirable activites. Per policy 7-002, the University of Utah Research Foundation licenses University technologies and income received is shared with inventors.

How long will I get royalties?

Once a license is signed, the timeframe that royalties might be paid out to inventors varies based on the terms of the license. Terms may include: life of the patent(s), a set number of years, or a one-time upfront fee. Additionally, as indicated in policy 7-002, the inventors’ share of income shall be based on percentage of such income or revenue remaining after reimbursement of all direct costs, patent prosecution or maintenance, required payments to other institutions and all development funds advanced.

How much will I get?

The amount of royalty shares paid to inventors is a function of the amout of income received under the license and is calculated pursuant to Section III, Paragraph G of Policy 7-002.

When/how often will I get royalties?

Timing of payments to inventors is based on the amount due to the individual inventor. Payments will be processed as follows:

  • $10,000 or more - Immediately after deposit
  • $5,000 to $9,999 - Quarterly
  • $4,999 & under - End of fiscal year (June)

Percentage contribution changes for inventorship

At the time of disclosure, inventors have the opportunity to indicate % of contribution on the Invention Disclosure Form (IDF). When inventions are patented, inventors may be added or removed based on the claims of the patent. It is important that changes to inventor contribution be communicated to TVC. If inventors’ contributions are not equal, then inventors must agree, in writing, to the modified percentages. To modify the IDF, a “New Inventor Share Agreement” form can be completed and submitted to TVC. A document created and signed by all inventors or an email chain acknowledged by all inventors, is also acceptable. Unless TVC receives notice, as stated, of a modified contribution, inventor shares are paid equally to the inventors on the licensed technology(s) or patent(s).

Patent Policy 7-002, (III) (G): Distribution of Royalty Income

Inventors shall receive a share of royalty income or other revenue received by the Research Foundation as a result of commercialization of an invention. The inventors’ share of income shall be based on a percentage of such income or revenue remaining after:

  • reimbursement of the University for all direct costs of patent prosecution or maintenance
  • payments to other institutions required by Unversity agreement, including but not limited to inter-institutional agreements for the management of jointly owned patents, and
  • all development funds advanced pursuant to section III.C.3 (“net revenue”).

The inventors’ share (in the aggregate where there is more than one inventor) shall normally be forty percent (40%) of the first one hundred-thousand dollars ($100,000) of net revenue, thirty-five percent (35%) of the next two hundred thousand dollars ($200,000) of net revenue, and thirty-three (33%) percent of any additional net revenue received by the Research Foundation.