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34 REVENUE-SHARING >>> Case Study... In the end, the idea of establishing a new spin-out company is not successful and the University is able to do a deal to license the three patents to Diabetes International Inc. How is the revenue shared in these circumstances? The three patents are treated as a bundle of IP and the University does not have to deal with the issue of deciding how much it received for each individual patent. From the money it receives from Diabetes International Inc., the University first deducts its expenses (such as patent costs and legal fees) relating to the IP and its commercialisation. It retains 30% (15 + 15) of the balance and the rest is for the inventors to split between them as they see fit. … Dr Owens is a post-doctoral research assistant at the University. She has been employed to generate some pre clinical data to support one of the patents. Will she share in the money received from Diabetes International Inc.? Dr Owens is a contributor to the IP and not an originator of it even if the data she has generated is commercialised with the patents. This is because she has been employed specifically to generate supporting data in respect of such IP. So she has no right to share in in any of the money received. All or any of the inventors could agree that she can receive part of their share. If a payment is made for Tangible Research Materials, which is not for the IP in them, then such revenue will be shared in line with the above revenue sharing provisions, except that the creator's share goes into a research account in the inventor's/creator's School. Return on IP Calculation - The return on IP is calculated after the deduction of the expenses incurred by the University or UMIP in connection with the registration, maintenance, marketing and commercialisation of the relevant IP. In the case of commercialisation through licensing (other than to a spin-out company), these expenses are simply deducted from the revenue received by the University. Any PoP funding invested is also deducted by way of a graduated recovery once the return reaches £250,000 of income with £1,000 repayable for every £10,000 of return received above £250,000. Where commercialisation is through a spin-out company, the expenses are dealt with by an adjustment to the percentage of shares which the University receives. This takes account of the fact that the shares will be issued before some of the expenses have to be incurred. The PoP funding becomes a loan repayable by the spin-out company to the University when the company is sold or listed. The University may alter the revenue sharing arrangements to deal with major overarching initiatives.