Intellectual Property Royalties of Researchers

Universities typically have a policy that assigns all rights to new invention to the university and provides a certain percentage of the university's royalties from licensing those patents to the inventors. Sometimes the policies also provide a percentage of the royalties to the department or the specific research lab where the research was done.

There have been a lot of disputes all over the nation for decades now about royalties due to university faculty and graduate students.  Sometimes an institution will try to retroactively change policies in order to retain more of its income for the current year by not paying out royalties that are due. Sometimes a dispute arises because the faculty or graduate student was hired for research and not invention so they try to patent and license the invention themselves and avoid sharing the royalties with the university. Sometimes the employee or graduate student moves on, finishing their research or invention elsewhere and not crediting the university at all for previous research they did while being on the university's payroll. Sometimes the university will decline to pursue a certain invention and only after the inventor makes it profitable with another business partner the university will sue the inventor for its share.

These disputes are common and, regardless of who is the cheater or the victim in each one, they cost the nation in lost productivity. Sometimes a researcher or inventor is told by an attorney to cease working on something while the case is being fought. Sometimes the university will deny access to the laboratory during the dispute. 

Universities are supposed to be centers of study and it's disturbing to think of them as places that sometimes try to cheat their own faculty or students or be cheated by their own faculty or students. 

The university as an institution is a special place that fosters synergy among people who are studying, teaching, and advancing the state of many arts and sciences. Because of this special nature, and because an academic life is so different from corporate life, I think that whether a person is employed by the university to do research, or grade papers, or clean bathrooms, any invention made by a person while participating in a university can be said to have been at least partially inspired by the environment. Universities try purposefully to recruit bright students and they entice them with rewards. Therefore, when those bright students come to universities and make innovations there, even though the students may be paying for the privilege of attending the university, those students still owe a part of their innovation to the university environment. 

I think a reasonable arrangement would be for the university to pay the inventor a share of no less than 10% of the gross royalty payments it receives for licenses of that inventor's work.  Some universities pay as much as 25%, and that's great if they can afford it. I think that if the invention is made after the inventor leaves the university but it is made in the inventor's field of research while at the university, it likely owes some of its existence to learning or research that happened while the inventor was employed by the university, and therefore the university deserves a portion of the royalties.  I think that the percentage due to the university should decrease with time to reflect additional work that the inventor is doing while employed by someone else and the fact that the university itself has more time to make something out of what was left behind using other researchers.

A schedule of royalties to the inventor that increases each year after leaving the university may be fair. For example, the inventor receives 10% while employed at the university, 15% the first year after leaving the university, 25% the second year after leaving, 40% the third year after leaving, 60% the fifth year after leaving, 85% the sixth year after leaving, and 100% the seventh or any subsequent year after leaving the university.  Those royalty amounts would be fixed amounts based on the year the the invention was licensed. So a patent obtained during a year when the inventor would receive 40% royalties would continue to pay 40% royalties to the inventor for the life of the patent. 

If the inventor leaves the university to join another university, the inventor should either obtain a release from the university for any further work in the inventor's field, or the two universities can share equally in the university's share of the royalties, or an accelerated schedule of splitting royalties between universities can apply only while the inventor is still at the second university.

I think that, if the university declines to pursue a patent for an invention, and the inventor made a reasonable effort to convince the university committee of the merits of of the invention and its profitability, then the university forfeits all rights to royalties from any resulting patents that are pursued with outside assistance or with the inventor's own funds. The refusal must be in writing and either disclaim the merits or the feasibility of the invention. Universities should have an obligation to either honestly pursue patents or issue complete refusal letters in a timely manner in order to avoid impeding national progress. 

My thoughts may be applicable to corporations, but I don't expect that corporate rules would be the same. Corporations can demand non-compete agreements from their employees that universities shouldn't demand. Corporations are about profit whereas universities are about learning.