Distributions & Inventorship
Distribution is the up-front definition of how prosecution expenses and any net benefits (income) will be divided.
INVENTORSHIP DISTRIBUTION POLICY - èƵapp's Royalty Distribution Policy
Whether or not there is an IIA with a collaborating institution, the reimbursements and royalties are distributed according to èƵapp’s University Policy Manual, Section 10.16, article 21 Patents: Royalties, which is reproduced in the table below.
èƵapp's IP Policy States
All direct expenses associated with patenting, protecting and preserving Patent rights, maintaining the Patent, the licensing of Patent and related property rights, and such other costs, taxes or reimbursements as may be necessary by law will be covered before any distribution of royalties. [Please refer to the online Policy for the latest, accurate information about all èƵapp Policies.]
The remaining amount (net benefits) will be distributed as shown in the table:
Inventor(s) as Personal Property means 40% of the royalty is paid directly to the inventor(s).
Inventor(s) to apply to their research provides a 10% “payment” from èƵapp’s 60% share to the inventor(s) for lab equipment or research purposes.
Net-benefits distribution between èƵapp and Inventors
INTER-INSTITUTIONAL AGREEMENT - IIA's Impact on all Distributions
If research is collaborated between èƵapp and one or more universities, an IIA defines how expenses and net benefits are to be divided amongst the collaborating institutions, not the inventors.
The division between èƵapp and its faculty inventor(s) is set by èƵapp’s IP Policy (See University Policy Manual, Section 10.16, article 21 Patents: Royalties).
First Distribution is to the Institutions
The first consideration for distribution is between èƵapp and the other University (or Universities). The Inter-institutional Agreement documents the agreed-to division of expenses and net benefits (royalties) between the collaborating institutions, as illustrated in the figure below using arbitrary percentages between èƵapp and the collaborating institution.
Impact of IIA on Net-benefits distribution between èƵapp, the other institution, and èƵapp Inventors
NOTE: Royalties are distributed once all patent prosecution and licensing expenses are recouped by èƵapp and the collaborating institution, if any.
In this hypothetical case, èƵapp is limited to 55% of the royalties (and expenses). The 55% of the royalties are subsequently divided between èƵapp and its inventor(s) based on èƵapp’s IP Policy.
Each inventor’s share of the 40% Personal Property is based on the agreed-to distribution captured in Sophia, as illustrated in the figure. This division would also apply to the 10% for inventor(s)’ lab.
Although how net benefits are distributed amongst the inventors can be changed at any time, if the distribution is not defined prior to royalties coming in, disagreement may arise between the inventors.
The next section explains why external (non-èƵapp) inventors have 0% distribution in Sophia.
èƵapp DISTRIBUTIONS IN SOPHIA - How Distributions are Entered in Sophia
Sophia requires the distribution percentages among the inventors to sum to 100%. The example below shows a distribution table for two èƵapp inventors and two external inventors.
Table in Sophia showing the net-benefit distribution between èƵapp inventors
The two external co-inventors have 0% in the table because their university sets their distribution and, hence, do not show up in Sophia. Their actual percentages will appear on their Patent Management System.
INVENTORSHIP vs AUTHORSHIP - Why understanding the difference is important
Inventorship is a legal definition, refined through statutes and case law, and is limited to natural persons. It differs significantly from authorship. Inventorship depends only on the claims and not any other text included in the body of the patent application or issued patent. In summary, Inventorship is about who came up with the idea of the invention, while authorship is about who wrote or created the content related to the invention or research.
An inventor in the U.S. is someone who contributes to the conception of any part of an invention. A person who only works at the direction of others, merely identifies a problem to be solved, or executes instructions to perform experiments is not an inventor.
AI cannot be an inventor on a U.S. Patent and AI cannot be an author on a U.S. Copyright.
Two or more individuals may be co-inventors of an invention even though they did not work together on the invention at the same time or in the same place or make the same type or amount of contribution to the invention. However, they must contribute in a significant way to the invention as claimed.
Inventorship can change during the prosecution of a patent application as patent claims are changed. For example, if an individual adds new functionality to the invention which results in one or more additional Claims, that individual is added as a co-inventor. Conversely, if the Claims an individual contributed to the invention are rejected during prosecution, that individual is removed from the list of inventors.
Inaccurate Inventorship can invalidate the Patent or cause the Patent to lose value when licensing or selling the Patent.
Income distribution from an invention is not solely determined by inventorship but can apply to a wider group and involve other staff. An author can be included in the distribution of royalties for a patented invention, but it depends on the specific agreements and contracts in place. The best way to ensure that the author receives a royalty payment is to formally document this arrangement in a written agreement. This agreement should specify the percentage of royalties the author will receive, the payment terms, and any other relevant details.