How do universities share in the income from faculty and student inventions?

An article in the Duke Chronicle earlier this year reported on several schools and their patent-revenue sharing policies, starting with Duke.

At the time, the Duke University Policy on Inventions, Patents and Technology Transfer, found in the Appendix of the faculty handbook, requires all faculty inventions to be reported to the Office of Licensing and Ventures, where they are categorized: inventions created independent of university resources; inventions that resulted from the use of some university resources; and inventions that relied heavily on university resources.

Category 1 inventions see all proceeds go to the inventor. In category two and three, the university first gets reimbursed for the resources used, and then a royalty is paid to the school: “For the second, Duke has the right to collect a royalty of 10 percent of the gross income. The third category, which most University inventors usually fall under, gives Duke ownership of the invention and 50 percent of net earnings for inventions that earn anything less than $500,000, 67 percent for income between $500,000 and $2 million and 75 percent for anything over $2 million.”

At the University of Virginia, the university is entitled to 50 percent of royalties, regardless of the amount of patent income.

Stanford University and several others put proceeds into three buckets:  one-third for the inventor, one-third for the inventor’s department, and the final third to the university.

The article ascribed a different governing philosophy to the Massachusetts Institute of Technology, suggesting they take a much lower royalty on faculty inventions in order to stimulate innovation.