Policy#: OR-0004

Effective Date: April 4, 2019

Last Revision Date: April 4, 2019

Tangible Research Product Royalty Income Disposition

(Policy OR-0004)

I. Purpose of the Policy

The purpose of this Policy is to supplement the University of California (UC) Patent Policy as it concerns the University of California, Santa Cruz campus only (“UCSC” or “University”), by establishing a clear and uniform allocation of the royalty income arising from licensing intellectual property rights associated with tangible research products (as defined below).  If there is a conflict between the terms of this UCSC Policy and the UC Patent Policy or UC Policy on Copyright Ownership, the terms of the UC Patent Policy or UC Policy on Copyright shall prevail, respectively.

II. Definitions

Unless defined herein, terms used in this Policy shall have the meaning ascribed to them in the UC Patent Policy.  For the purposes of this Policy, the word “inventor” shall have the same meaning ascribed to it in the UC Patent Policy; namely, UCSC employees that created the Tangible Research Product (TRP) and assigned their rights to the Regents, or TRP that is owned by UC as a matter of law.

Additionally, the following terms have the definitions listed below:

Net Royalties: Gross royalties (total payments for a TRP License of a particular UCSC Case) and fees received by the Regents, less any administrative costs, un-reimbursed legal fees and costs of preserving and protecting the tangible research property, and such other costs, taxes, or reimbursements as may be deemed necessary or required by law.  Net Royalties may also include cash realized from the sale of stocks or shares accepted by the Regents as equity granted as partial consideration for the TRP License.  Net Royalties is not derived from research funds, expense reimbursement or from any other consideration of any kind received by the University, including UCSC.

TRP: Tangible Research Products that: (1) do not constitute copyrightable works under the UC Policy on Copyright Ownership, and (2) do not constitute an invention under the UC Patent Policy, or do constitute an invention for which the UC will not or has not yet pursued a patent.  Such TRP include but are not limited to cell lines, plasmids, reagents, technical schematics, physical models, and research data. 

TRP License: Legal contract that conveys a present commercial right to use specific intellectual property rights associated with specific TRP arising from one or more specific disclosures of UCSC Case(s) in return for consideration in the form of fees, royalties, and occasionally equity in the licensee.  An option agreement leading to a future license or bailment agreement is expressly excluded from this definition.

UCSC Case: A disclosure to UCSC office of Industry Alliances and Technology Commercialization (IATC) describing TRP.  For disclosures that are potentially patentable and/or copyrightable, the UC Patent Policy and/or UC Policy on Copyright Ownership shall apply, respectively.

III. Detailed Policy Statement

  1. Subject to restrictions arising from overriding obligations of the University, including but not limited to policy and obligations concerning gifts, grants, contracts, or other agreements with outside organizations, Net Royalties from TRP Licenses will be distributed, following the assignment of the respective TRP to the Regents, in a manner consistent with the distribution rules articulated in the UC Patent Policy and the UCSC Patent Royalty Income Disposition Policy.
  2. If the TRP is commercialized in a bundle together with inventions governed by the UC Patent Policy, then the Net Royalties shall be distributed pursuant to the UC Patent Policy and the UCSC Patent Royalty Income Disposition Policy on the bundle of rights throughout the term of the relevant agreement.
  3. Equity received by UCSC as part of a TRP License, whether in the form of stock or any other instrument conveying ownership interest in a corporation, shall be distributed in accordance with the UC Policy on Accepting Equity When Licensing University Technology.

IV. Getting Help

IATC provides training and assistance to campus units (including help with completing forms, carrying out procedures, or interpreting policy).  Contact IATC at innovation@ucsc.edu or (831) 459-5415 with questions or for help pertaining to this policy, invention disclosures (patents, copyrights, or TRP), patent policies, copyright policies, or other intellectual property management matters.

V. Applicability and Authority

This Policy applies to TRP that do not constitute an invention under the UC Patent Policy or copyrightable works under the UC Policy on Copyright Ownership and are owned by the Regents of the University of California, and prescribes the distribution of related royalties and other licensing income.

This Policy does not apply to patents and copyrightable works.  For any TRP that is a patent or patentable, the terms of the UC Patent Policy and UCSC Patent Royalty Income Disposition Policy shall apply.  For any TRP that is copyrightable works, the UC Policy on Copyright Ownership and UCSC Copyright Royalty Income Disposition Policy shall apply.

This policy on TRP Royalty Income Disposition applies to all UCSC departments.  It is a new policy and thus supersedes any campus practices in existence prior to its effective date.  

The Vice Chancellor for Research is the campus authority for matters pertaining to intellectual property, with implementation authority delegated to the Assistant Vice Chancellor for Research - IATC.

This policy was reviewed and approved by the Campus Provost and Executive Vice Chancellor, Marlene Tromp on [_______]. This policy will be reviewed every five years.

VI. Related Policies/References for More Information

Related Policies:

University of California Patent Policy (10/1/97)

University of California policy on Copyright Ownership (8/19/92)

University of California, Santa Cruz policy on Patent Royalty Income Disposition (TBD)

University of California, Santa Cruz policy on Copyright Royalty Income Disposition (TBD)

University of California Policy on Accepting Equity When Licensing University Technology (2/12/96)

Authority Delegation:

Delegation of Authority on Intellectual Property

Delegation of Authority on Copyright

VII. Revision History

April 9, 2019: New policy