7

I have demonstrated that some of the technologies derived from our research are marketable; I have offered services based on them to industry customers and have been paid for that. So as academic research group, I have received income, but which can only be used to buy lab equipment mostly and not for personal use (salary complement, a new mobile phone, etc). Therefore I am thinking to create a spin-off, but the policies of our university in that case do not allow income to go directly to the researchers, so that I feel a bit frustrated about that. From the other side, I can not create a company and manage it in my free time since my contract does not allow to do that, and all technology derived from my research belong to the company. This is a private university and very young (15 years) and there are not many cases like mine. So my plan is to go and talk directly with the main head and tell them I want to create this spin-off, since this will be good for the university, its reputation, and so on, but that I want to receive some part of the benefits in terms of personal (for me) income. For doing this I would like to give them concrete examples that this works in other universities, since I have heard this situation is typical in other academic contexts, etc. Therefore I wonder if you know of concrete and specific examples of spin-offs from universities, where the university allows the researchers to earn some money derived from the incomes.

  • I have workaround: Incorporate a company and appoint a CEO other than yourself, retain some of the shares yourself. – user2768 Mar 6 '17 at 12:42
  • that is very interesting but not what I was asking, thanks – Open the way Mar 6 '17 at 12:45
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+150

The policy at my university for managing patent licensing fees and the like, which is somewhat distinct from a spin-off but somewhat conjoined - for example, you could start a spin-off that then licenses the patent, or find a company interested, etc.

  1. Division of Patent Royalties

a) All monetary proceeds from the commercialization of University-owned inventions are the property of the University or its assignee. The University or its designee will collect and distribute royalties, fees, equity interests, or dividends to inventors and the University in accordance with the procedures established by the University.

(1) The University or its designee will deduct the costs of obtaining and maintaining legal protection, for each invention, to arrive at “adjusted income” unless other arrangements, agreed to by all parties that share in the income, are made by the relevant branch campus, research unit or program in advance of the expense and agreed to with the OC. Such arrangements may include contracted marketing, licensing and business development. In such cases, any agreed upon expenses will be deducted to arrive at adjusted income.

(2) The Office of Commercialization will deduct twenty percent (20%) from adjusted income and the remainder will be “net income.” This deduction is directed toward covering the expenses (excluding direct patent expenses) for administering the OC and provides initial funds for patent prosecution for other inventions without obvious commercial partners.

(3) Net income will be distributed according to the following schedule. University’s portion of the share will be distributed as follows: 30% to the University, 20% to the college and department (or relevant branch campus, research unit, or Program when appropriate) to be equally split between the two

Cumulative Net Income Inventor/Contributor University
$1-$10,000                    100%
Above $10,000                 50%              50%
  • thanks, can we know which university is this? (since I am looking for concrete examples). and in summary, which percentage of net income can then receive the researcher? – Open the way Mar 8 '17 at 11:54
  • Washington State University. What percentage of net income will depend on the amount in question, as in the bottom table. I believe the total amount is uncapped. – Fomite Mar 8 '17 at 16:40
  • ok, and this 50% for the inventor, goes directly to the personal bank account of the inventor and he/she can do whatever he/she wants with the money or can only be used for lab equipment ? – Open the way Mar 8 '17 at 21:37
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University spinoffs are quiet common, although setting them up can be quite complex. There seem to be reviews of the process and lists of successful ones. Some of the benefits are described in this Nature article. Spin offs are not just limited to the US, UK spinoffs have also been very successful.

As an example, Herbert Boyer progressed up the academic ranks at UCSF from 1966 to 1991. He also co-founded Genentech in 1976 and served as its vice president. While I cannot easily dig up anything that says he received a salary, royalties, or a stake in the company, he did donated $10,000,000 to Yale in 1990.

Michael Mauldin developed Lycos while at CMU. He left his faculty position to become the founder and chief scientist at Lycos, but maintained an adjunct position. Again I didn't find anything about his ownership stake or salary, but most adjunct professors do not retire to their own cattle ranch at age 50.

  • yes, that is a very interesting list, but can one there find information about whether researchers involved can earn part of the benefits? – Open the way Mar 8 '17 at 11:53
  • @flow yes, you just need to look a little. I provided two examples. – StrongBad Mar 8 '17 at 21:06
  • thanks, but I need solid examples that I can show to my employer – Open the way Mar 8 '17 at 21:38
  • @flow what do you want? I don't think you are going to find copies of contracts... – StrongBad Mar 8 '17 at 21:41
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Just to add another university to the list, Carnegie Mellon University has an entire department dedicated to managing spinoffs. The previous link (here again) lists a number of successful spinoff companies, as well as a brief blurb on each, with occasional links to more detail. They also have an extensive list of forms, policies, disclosures, and other resources that you may want to reference when speaking with your university. You may find that you can save a lot of time by simply using these forms and procedures rather than starting from scratch.

0

I think this one should count: It's called Ant-Optima and, as the description suggest, is a spin-off of a rather well known AI research lab affiliated with the University of Lugano, Switzerland.

  • but do you know if there the researchers earn part of the benefits? – Open the way Mar 8 '17 at 11:52
  • @flow Good point. I do not (and cannot) know for sure. My guess would be "yes" (where else the benefits would go?) But it's not more than a guess. – PsySp Mar 8 '17 at 11:55
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Here is the Duke Policy: https://provost.duke.edu/wp-content/uploads/FHB_App_P.pdf

Relevant exerpts:

Section IV, Part C: "Inventions resulting from research or other work conducted by University employees in whole or in part on University time or with significant use of University funds or facilities shall be considered the property of the University."

Section V, Part C: All income derived from inventions falling within Article IV, Section C shall be distributed in accordance with the following rules:

  1. ...

  2. The University will then pay and distribute the income remaining after payment of direct expenses in the following manner:
    a. income from $0 to $500,000:

(1) fifty percent (50 %) thereof to the inventor;

(2) ten percent (10 %) thereof to the inventor's laboratory until, in the discretion of the President after consultation with the Chancellor or the Provost, this distribution equals the maximum amount which can reasonably be expended in that laboratory, after which any excess shall be added to and distributed as a part of share in accordance with V.C.2.a.(4) below;

(3) ten percent (10 %) thereof to the inventor's department/organizational unit; and

(4) thirty percent (30%) thereof to be directed to the school of the inventor’s primary appointment.

  • thanks this is kind of what I was looking for. Last question is, this 50% for he inventor, goes directly to the personal bank account of the inventor and he/she can do whatever he/she wants with the money or can only be used for lab equipment ? – Open the way Mar 8 '17 at 21:36
  • I don't know personally, but the language suggests 50 percent personal bank account, 10 percent lab (only lab-related expenses). – Dawn Mar 8 '17 at 22:17

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