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Distribution of Income

Payments to Joint Holders

When an invention results from a collaboration between UC and non-UC researchers, multiple entities may become joint holders of the invention patents. When this occurs, interinstitutional agreements are negotiated to establish which entity will be responsible for the management of patent prosecution and licensing of the invention, including the collection and distribution of invention income; such collaborations are relatively common. In FY96, 99 of 661 new disclosures (15%) included non-UC inventors and 23 new interinstitutional agreements were issued.

In FY96, OTT and campus offices redistributed $6.0 million in income to other entities for inventions covered by interinstitutional agreements (Exhibit 18, below). These payments were deducted from royalties and fees to arrive at the adjusted gross income. The largest payment to a joint holder in FY96 was $5.41 million to the University of Washington for the Hepatitis-B Vaccine. Over the past five years, the growth in payments to joint holders (Exhibit 19, below) has been largely attributable to the portion of royalty income distributed for this invention.

Exhibit 18
Year Ended June 30, 1996

Payments to Joint Holders   $5,988 $36 $5 $0 $6,029

Exhibit 19

Inventor Shares

The University Patent Policy grants inventors the right to receive a portion of net income accruing to individual inventions. In FY96, 543 inventors received a total of $19.0 million in inventor share distributions based on the financial activity of their inventions through June 1995 (Exhibit 20, below). This represented an 11% increase in monies distributed to inventors over the prior year and continued the five-year upward trend evidenced in Exhibit 21, below.

Exhibit 20
Year Ended June 30, 1996

Inventor Shares   $18,425 $169 $394 $3 $18,991

Exhibit 21

State Share

The State of California portion of University technology transfer income totaled $6.8 million in FY96 (Exhibit 22, below). The State share is equal to 25% of the amount remaining after deducting net direct expenses for all cases and total inventor share payments from adjusted gross income.

Exhibit 22
Year Ended June 30, 1996

State Share*   $6,797 $62 ($33) ($51) $6,775

* When direct expenses and inventor shares exceed income, the State share is represented as a credit (negative amount).

Exhibit 23 (below) depicts the growth in the State share over the past five years.

Exhibit 23

Campus Distributions

The portion of technology transfer program income that is available to be redistributed to campuses to support ongoing research and education programs is net income. It is computed as total income less the sum of program expenses, payments to inventors, and the State share distribution. Net income for OTT and campus offices totaled $14.0 million in FY96. Exhibit 24 (below) shows the contribution each licensing office made to systemwide net income in FY96. Exhibit 25 (below) shows how net income has fluctuated over the past five years.

Exhibit 24
Year Ended June 30, 1996

  Net Income (Loss)   $15,761 ($280) ($801) ($673) $14,007

Exhibit 25

Net income generated by the campus licensing offices remains with the campus. At OTT, where inventions are managed for multiple sites, the amount of net income for each campus or Laboratory is determined by carrying out a separate income and expense analysis for each campus or Laboratory’s invention portfolio that includes assessing a pro rata share of OTT operating costs. At the end of each fiscal year, each site either receives its share of net income or pays for any net loss generated by its invention portfolio.

In FY96, seven campuses and one Laboratory received net income from OTT, while the other two campuses and two Laboratories incurred net losses. Exhibit 26 (below) shows a summary of the financial performance of campus invention portfolios managed by OTT.

Exhibit 26

(Invention, Campus, Year Disclosed)

UC Berkeley
UC Davis
UC Irvine
UC Los Angeles
UC Riverside
UC San Diego
UC San Francisco
UC Santa Barbara
UC Santa Cruz
DOE Labs and UCOP


$        61 

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