The cost of inventing

Unfortunately, whenever money is involved, there will be disagreements. The money related issues that technology transfer offices argue about tend to fall into three categories.

• Patent expenses. It's often thought that the lead institution should bear 100% of the patent expenses. After all, it is 'in charge' and has direct contact with the patent attorneys. Paying 100% of expenses will likely inspire the institution to find a licensee quickly. Furthermore, it isn't doing anything it wouldn't do if the invention was 100% owned by them. Others suggest that because the two sides will share revenues, it isn't fair for one to cover 100% of the expense but get only a fraction of the return. And, those people argue, the institute is doing things it wouldn't do if it owned the invention outright—namely, exerting 100% of the effort to license the technology, but sharing revenues.
• Management fee. The customary request is 15% of revenue capped at a lifetime maximum of $50,000. Again, some feel the lead school isn't doing anything that it wouldn't be doing otherwise, so there is no reason for a management fee. Others say there are too many things the lead school has to do—copying the partner on patent correspondence, sending reports, answering questions from the trailing university's inventor, dealing with criticism for not finding a licensee, disbursing money to the other university—for there to be no fee. Keep in mind that the administrative tasks last for 20 years.
• Licensing revenues. Benevolent folk feel that revenues should be shared 50/50, or perhaps based on the number of inventors or the significance of the inventors. More aggressive people retch at this thought. They typically think that revenues should be shared in the same ratio that expenses are shared, although that perhaps lessens the potential return to an inventor with a poverty-stricken technology transfer office that cannot pay anything. DS