Before we begin, I would like to acknowledge and thank Autumn's online professional development sponsor.

Marshall Gerstein, we appreciate your ongoing support. I would now like to introduce today's session moderator, Eric C.

Great, well, good morning, everybody, or afternoon, depending on where you are. I'm Eric C, I work at Cedars-Sinai Medical Center in Los Angeles.

Um, I'm Director of Operations there, and today I have two fantastic panelists.

Um, I will let them introduce themselves. Um, so I'll pass it to you, Kevin, because your last name came first in the alphabet, so if you can introduce yourself, um, that would be great.

Hi, my name is Kevin Johnson, I'm the accounting manager at the Innovation and New Ventures Office.

At Northwestern University, I have been the accounting manager. Um, a little over a year now prior to that, I was working as a financial administrator for the past, I want to say.

12 years now? Been at Northwestern for going on 14 years, so, um… Yes, that's pretty much my background, and again, I… I'm new in the position as the accounting manager, um, but I think we have a lot of information to share.

Amanda, thank you. Can you, uh, introduce yourself? Thank you.

You have to unmute. Absolutely. Um, I am Amanda Sorensen, the Director of Operations at Innovation Partnerships at the University of Michigan.

I have been here in this office for, gosh, it'll be 6 years in September, which is… oh, wow, we're in August, that's next month.

Um, and before that, I was, um, in another tech transfer office at, uh, North Carolina State University for almost 10 years, so I've been.

Doing tech transfer operations for almost 16 years.

Great, well, thanks. I didn't mention how long I've been doing this, it's about 11 and a half years, so, um, I started, um, in tech transfer then, and have.

Learned it as I went, so it's… it's all been an adventure. Um.

Before we get further, I do want to do a quick plug for Autumn U, which will be taking place in New Orleans.

In October, it's October 26th through 29th, um, at the Intercontinental. And in case you don't know, Autumn University is, um, several courses rolled into one. What I'm really, you know, kind of excited about is operations and compliance.

Which is 3 different tracks. Um, there's operations, which, um, if you've been around a long time, was formerly called Tools. It's sort of the high-level overview, really great for, um, folks who might be, you know, in their first 5 years in tech transfer, um, and haven't quite seen the whole picture.

I remember the first time I went, it was so exciting to kind of finally see these other pieces that I didn't quite understand how they connected and how it all works together. Um, there's the agreements and finance, um, track, um, which, uh, Amanda is part of the committee for, and that's really the deep dive on agreements and financing and, you know, everything that goes along with that, which is, as you can imagine.

Is infinite. And then, last but not least, um, is compliance, and so that's really a track focused on, you know, federal compliance, um, and, you know, other.

Compliance pieces for, like, American Heart Association, things like that, um, and really just best practices there, um, learning from all those amazing people in one room, um.

I always like to kind of message this to my boss and grandboss.

Of, you know, I don't really get to talk with a lot of, you know, professional peers every day. I have, you know, my little core group, and we do that. And I always tell my boss, you know, I know you don't want to get in the weeds with me on, for example, revenue distribution, but you always want to know I'm doing it correctly, or the people I have working with me are doing it correctly.

And so this is really a chance for me to… you know, work with a peer group to meet, kind of, colleagues that I can then connect with.

Over the years, um, make friends, and really feel like I am that professional. So if you… if you kind of want to talk about how to message this to your boss, feel free to send me an email. Um, we can chat about it, because, um.

We've all been there, and I want everyone to basically have the resources that I've had, um, that have helped me grow as a professional. So, if you're able to come, we would love to have you.

Um, so now we'll dig into our topic at hand, which is revenue distribution, tales from the trenches. Um, I'm going to run this more like, uh, kind of a talk show as a conversation, um, to kind of keep it fun and light, um, and not so much as a book report. So I'll be posing these questions to Amanda, Kevin, and then I'll be interjecting some stories.

As you have questions, please feel free to put them in the chat or the Q&A box. We'll be… I have it up, so I'll be kind of monitoring so we can come to the… answer those questions as we're going along.

If I see a question that I know we'll get to later, I'll kind of hold on that.

And keep that question for when it is most relevant, but please do put those questions in the chat.

Um, so with that, um, we'll get right into it. Um, so I put this kind of, like.

Wacky, um… like, meme thing in here about word problems, and… I really feel like revenue distribution feels like a word problem. Um… In that, you know, oftentimes the math behind a word problem isn't the most difficult math.

But it feels so complicated, and so… there's so many moving pieces that it feels so easy to get completely lost in the weeds and distracted and… you know, pulled in all sorts of different directions. So, hopefully this made you laugh, um, but also I want to kind of.

Make everyone feel supported and… Know that you can conquer revenue distribution and work through it. It is not as scary as it seems when you first, kind of.

Look at it. Um, and I still have that experience, I'll be honest. I still have moments where I, like.

Sit down to, like, do a distribution or start looking at it, and I just feel completely overwhelmed, and I have to kind of start with those baby steps.

Um, and so, we'll start with some general best practices. Um, so… Amanda, I'll start with you. How often do you distribute, and can you tell us a little about your royalty sharing policy?

Sure. We have gotten to the place where we distribute as.

Revenue comes in, with a caveat that, um. We try to… we will let revenue, um, kind of… build up to about $1,000 before we distribute, so that we're not distributing, you know, $20.

Um, to five inventors, because there's just, um, it's gonna cost us more to do that than the amount of revenue that we have.

Um, but we do try to distribute as money comes in now. Um, it's taken us a while.

To get to this point where we can. Um, our royalty sharing policy is super fun. We have a.

Banded or tiered policy. Um, we do share, uh, with inventors, the inventor's, uh, school or college, their department, and then a share also goes to what we call central administration.

And we are banded, um, up to 200,000 of net revenue on an agreement.

It is per license agreement. Um, and then between $200,000 and $2.

Um, is a second band, and then our third band is over $2 million. And the biggest difference is.

Over $2 million, um, the department no longer receives revenue, it only goes to the school and college and to central admin.

Um, but the inventor gets a share. And all three vans.

Okay. Interesting. Yeah, so the one thing I'll note about our distribution policy is that ours we don't share with schools or departments. We're an academic medical center, so it's basically just kind of going into the.

For lack of better words, general pot for research. Um, so Kevin, can you, uh, share how often you distribute and, uh.

Tell us a little about your royalty sharing policy. I know you said… I think you said you had 5? So, kind of high level about your royalty sharing policy.

Yes. So, uh, we're completely opposite of Amanda in the sense that we distribute.

Once a year. So… or once every fiscal year. So, um… like, right now, we are distributing revenue. We're in fiscal year 25, but we're distributing revenue from fiscal year.

24. So we kind of let it accumulate, um, all the way up from fiscal year to fiscal year.

Um, it's interesting that you do distribute on… Amanda revenue coming in as you get it. I… I was interested in that idea.

Um, so I think we might be visiting that in the long run. But, um… Yeah, so with our distribution, uh, sharing policy, yes, we have up to 5 different policies, and the reason why is because our policies begin back.

In, I want to say, with. Policy 1 kind of began back in, um, I want to say, let's see here, um… Back in, um, 74 to 1988, so… as effective years go by for each licensee, then the policies change. So right now, we are distributing on policy… well.

Depending on how the licensee or the license come in, or the agreement comes in, we're… distributing on, um, Policy 5 right now.

And up to Policy 5, just to talk about that a little bit, we do have a tiered system.

Where we distribute, um, up to $50 million, um. Within that $50 million.

Those shares do go to the schools and departments, and we.

Kind of, um, actually. Distribute to our share… our share to central administration.

So it is broken out from two school departments and central administration.

Um, but we do have a tiered system where when we reach over, um, $500 million.

Those shares go specifically to our central administration. And to the inventors.

So, it is a tiered system, and it's a tiered system.

Um, depending on how much revenue comes in.

Great. Um, so Kevin, do you use your database to do distributions, or are you doing something else?

No, so we use… actually, we're using Intium, and it is a great system.

For distribution, I really love it. I've seen… we've had a system before.

Um… that I was using for… as a… when I was a financial administrator.

And what I noticed is that the system now for NTM.

Is a great system for using, um… or distributing revenue.

So, um, I… I do love it, and… I highly recommend.

Great. So, Amanda, how about you? Are you using your database for distributions? Okay.

Ntm, plugged to NTM.

Okay.

We do. We distribute, um, we use Sophia. Um, we also… there's a question in the Q&A, because I distribute money as money comes in.

A specific question about that, and that is a nuance to the way that we do it.

Um, how do we calculate net, um, or account for patent expenses? That would be.

On reimbursed at the end of the year, which makes perfect sense.

Um, and we actually amended, um, our… policy, uh, back in 2021.

And so, what we do now is we distribute to the inventor immediately. They get paid as soon as we do the distribution.

We hold the university share. Um, we've calculated it, the database tells us how much the university is supposed to get.

And, um, we kind of keep an eye on what that percentage.

Um, should be to… be able to recoup those person… those expenses by the end of the year.

And at the end of the year, once we're sure that we have, um, withheld enough money to recover all of those expenses, we do a one-time transfer annually to the.

Departments and school. So, it's a little nuanced and a little more complicated, but it does mean that we actually, um, are not paying out of pocket for patent expenses anymore.

Great. Um, Kevin, a question came in, um, on your five policies, um.

How do you determine which policy applies? Is it the date of disclosure, the effective date of the license, or the data… the revenue was received, or even something else?

The actual license, okay.

Effective date of the license. So, yeah, so the actual license. So again, um… There are five, so obviously we are… we do have licenses, literally, from.

The period of, uh, Policy 1, which runs from 1974 to 1998.

And so, if there's, you know, as we're distributing on that IP that comes in, or the revenue that comes in between that effective date.

I will reply to that particular policy. And then it goes on from there. It's from… you know, Policy 2, 3.

And five, and 5 being anything… Policy 5. Being anything that has an effective date.

Uh, 2023 and over. So that's our latest policy right now.

Okay, that sounds like an adventure, because you could end up with one kind of technology spread over.

Spy.

All five policies, if you were really lucky.

Um, that's… that is very true, and that has actually happened, and I actually have.

A, um, particular agreement, or several agreements like that under one inventor, so… Yeah, and then what happens is that I have to break it all down to the different policies. You're… you're exactly right.

Right.

But those, I will say, is that that situation. Is more rare than common, but it does happen.

So…

Great. Okay. Um… I'm gonna kind of just skip around on my questions here. I wanted to ask, who checks your work? Uh, so Amanda, I'll put that one to you first.

Who do you look to to check your work? Is it you? Is it someone else? Is it your boss? Um, can you talk a little about that?

Sure. Um, we have two royalty distribution specialists, and they check each other's work.

Um, so whoever does the distribution is not the one who approves the distribution.

Um, and then if one of them is out on vacation, um, I would step in to be that approver if necessary.

Great, thank you. How about you, Kevin? Who approves or kind of reviews the distributions before they go out?

So, I, um… distribute and calculate it, and then I… we have a system where my calculations and statements go to my direct report.

So my direct report actually reviews it. And kind of kept… kind of recalculate… recalculate it on his own, kind of, his own system.

Just to make sure that the numbers match up, so it does go to a direct report before I actually… before it's actually approved.

And before the statement goes out.

Great, great. Um, do either of you have, like, checklists? I'm looking at… Nope, it's just… you're trusting that they know what to do, because I've always wanted to kind of come up with a checklist, because… you know, for things as simple as trying to.

Make sure that the royalty came in, like, I… that's one of the things I always make sure to, like, check myself, is that the amount received… I open the wire transfer or check remittance, and actually make sure that my top line number is correct, because it's one of those things, like, with royalty reports.

I worry it got keyed in wrong on the database, and… Then the distribution's completely wrong. So it's… I've always kind of wanted to have a checklist of… that I could give to someone else.

Sure, yeah, yeah.

That was kind of my… wish list of things that would be checked, but I've never actually sat down and written it, so…

So… So that is an excellent question, and um… we do have a checklist. So, we have a checklist where we use activities in Intium, which is.

One of the reasons… another reasons why. Why I like NTM, because we use a feature in there which, um, allows us.

To have what they call subtasks, right? And these subtasks. Our checklist of how the revenue comes, you know, how the revenue came in, and matching the revenue to the, um… I want to say the technology and the patent percentages, and making sure the calculation of the patent percentages are correct.

In our system, and… Um, checking the inventorship, so we have… we… We devised this checklist, um, that we.

It's called, like, really an invention evaluation, or distribution… I'm sorry, distribution evaluation.

And we go through just a number of things. They're like.

I want to say 12 points. Before we actually do the calculation and start the process of.

Creating the actual distribution statement.

Great. And so, a question came in the chat. Um, so I'll pose it to you, Kevin.

First, um, what are some of the benefits or detriments. For distributing the agreement level, as opposed to the actual technology level.

So, we actually do both. Um, distributing on the agreement level.

For me, what is kind of an easier thing, because. That's… those would be considered more of a one-off, right? It's a one-to-one kind of ratio when you're just… you see it.

Agreement or license that you're distributing on a licensee, and you see the… agreement come in, and it's just one agreement, right?

So, that's a pretty easy thing. But what happens when you have a technology with, say, 10 agreements? So.

The duty, again, of Intium is that it allows. You to actually set it up in a way where you can calculate.

All of the agreements. On the district… on the actual technology, um, and it'll calculate it and.

Kind of do its thing and sum it up and break it all out, so… I think that is the, um… the better part of doing it on the technology, especially when you have multiple agreements.

Right, and it sounds like your policy's also kind of driving the way… or your multiple policies drive… drive what level you have to distribute. Amanda, do you have anything to add there?

Um, we distribute at the agreement level, um, largely because. Um, the revenue is tied to the agreement, and so we kind of want to start from the top and keep everything linked together.

Um, as best as we can. Um, now in our system, the revenue is not specifically tied to the distribution, but they can all be.

You know, like, you can reverse. Blow it back up to the agreement.

Um, we do a process, and I think you probably have a question about this later in the slides, we also do revenue sharing agreements.

For every license agreement, and within that. We do, um… if there are multiple inventions, multiple technologies on the agreement.

We specify and have the inventor sign off on how we are splitting the revenue between each, and so we wait.

How much revenue goes to each technology within the license agreement.

Okay, great. Yes, there are a few questions that I'm sort of holding here, because we'll get to those topics later.

So I'm gonna march forward, um… You know, I'm curious, what level of detail do you share with your inventors, um.

You know, I'll start with you, Amanda. Um… Do you share the full breakdown, where they see all the inventors? Do they get nothing? Um, do they just get a check? Um…

Um, everybody gets a distribution memo, and the inventor's memo, they all get the same memo, so all of the inventors on it are listed.

Um, for the Inventor Share. So we… we start at the top with what the gross revenue was.

Any deductions that were made, we do explain what they're for, if it's a co-owner share under an IIA.

Um, for example, if there was VA funding, and VA has asserted ownership, we put that amount on there.

Um, we also have, um, a 7% administration fee that comes off the top. That's listed on there.

Um, after the inventors share, we don't break it out anymore. We put a single line item for the total for the university share.

But we don't necessarily break it out to the independent. Level of where everything goes.

And then at the bottom, we total it up of how much the net revenue was for this distribution, but also how much net revenue we've had for the life of the license.

We try to be as transparent as possible with all of our procedures.

So it sounds like you include a lot of information. I love how transparent that is, um…

Yeah. And so, is that just a memo that you kind of type out, or is… or using a kind of a system for that report?

It's in Excel, so we generate a PDF out of an Excel template that we have, because we don't currently have a way to generate it out of our system.

Okay. Well, great. So, Kevin, I'll turn that question over to you. What level of detail do you share with your inventors?

So, very similar to Amanda's detail, um, we do run a report out of NTM where it generates a form letter, which is a distribution statement, and so in that statement.

You will have the, um… you will have details such as our fee, the info fee, the breakdown to the inventors, each inventor, um.

The breakdown to the school, the breakdown to the department, the line item for central administration.

And then, if we're distributing on, say, technology. The technology level will even.

Break down the different agreements that's involved in the technology. Um, on that letter, so you'll see, like, there's… there's been times where there's… again, 10, 12, maybe sometimes 15 different agreements on one distribution statement.

And then we'll list the agreements and the amounts, and actually the description of where the actual revenue.

Came in from. So, we share a pretty, uh, high detail of information, again.

Like Amanda said, just trying to be… as, uh, transparent as possible.

Yeah, we've kind of gone all over the map, where we've done it, where some inventors want absolutely nothing included because they don't want the other inventors to be able to.

Right.

Go backwards with the math. Um… And I personally don't like that, I think it… it… people ask more questions, they feel like things aren't clear, um, it's very important to be including, kind of, the full information, and… Just making sure that… oh, go ahead.

Yeah, and also, when… I'm sorry, and also when we send out the actual statement, we are… we do include each inventor.

Um, so they're seeing the same information. So it's kind of, like, not this sneaky thing, oh, we're gonna send this to each individual and BCC everything, so… everything's pretty transparent.

When we send them to, uh, each inventor all at the same time.

Great. And so, question now, um, Kevin, what stage of the process do you… put a royalty-sharing agreement with the inventors in place? Is it at the disclosure stage, patent stage, license stage?

Royalty Sharing Agreement.

Oh, actually, so I guess we'll back up there a few questions, we'll talk about royalty sharing agreements. So, uh… the way it works at my institution is, um, basically.

In the invention disclosure, they include percentages. We say we will distribute according to those. However.

As you can imagine, there are agreements and things like that that are more complicated and nuanced, where we can't simply just go off the percentages, maybe it's a combined technology, maybe there's equity involved.

At that point, we'd put in place kind of what we call a net income sharing agreement, um, which kind of governs the full.

Suite of everything, for lack of better words. Um, but generally, we try and tie it to the invention. We want to get that royalty-sharing agreement in place, get those inventor percentages.

Agreed as early as possible, um, and that was just kind of from a practical point of view, as we realized the later you put it in place.

The more phone calls you had about, where's my money, where's my royalty, and it just, it seemed healthier for the inventors and for us to do it early, when they kind of are disclosing the invention, they're thinking about it.

Um, Amanda, how about you?

We do them at the time of license, so when a new license is executed, but before we've received any money.

That way, um, there's lower stakes, and the inventors agreeing on what those percentages are going to be.

Um, and we have recently revamped our system so that we do require signatures.

From the inventors on those agreements, although if there's an inventor that we can't find, or that, um, is unresponsive.

You know, we will not hold up everybody else's money. We give, um, you know, we document that we tried and all of those things.

Um, and then we will distribute.

Okay, great.

Yeah, so I believe that that process happens, um. Probably at the disclosure level, um, as we have different teams that.

That is involved in that process. I'm not involved in that process, so it's either we're probably gonna do that on the… from our docketing team, or from our, um.

Plm, our planning, post-licensing manager. Um… position, um, so… But as far as me putting that agreement together, the royalty sharing agreement to… sent to the inventors. I'm not involved in that process.

Great. Um, so, question about distribution statements, um. Is that a standard report, or is it something that you had created by, like, an IT person?

So, the, um, it's created by our IT person, but it is generated out of NTM. So, um, just working with NTM and working with our business intelligence director.

I'm gonna say that he probably. Worked behind the scenes to probably have that process to generate the actual statement out of NTM.

Sure.

Okay, great. Um, I wanted to dig into expenses a little bit, because that's always sort of a thorny issue. Um… So, how do you deal with expenses? I… consciously made this question very broad, um, because… I feel like it's a very messy…

Thing. Um… You know, it's one of those things, like, in tech… in all of tech transfer, it's easy until it's not easy.

You know, it's very straightforward until it's suddenly not. Um, so, Kevin, can you talk about how you deal with expenses?

Sure. So, I mean, just looking at the back when I started the distribution process, I checked first to see if there are expenses associated with, um.

The… the licensee. Um, or with a distribution.

That I'm paying out, um… So if I see that there are expenses that are paid out, or that there is expense.

Reimbursements that have not been paid out yet. I would check with our, again, post-licensing manager.

To see, kind of, what's going on, like, what's the expenses invoice? So, for the… for, um, just let me say, for the most part, the only expenses.

That we, uh, deal with are the, uh, legal expenses. So, um, those are… the legal expenses, we asked for the legal expenses to be reimbursed.

Back, uh, to us from the licensee, depending on how the.

The agreement is set up, but I'll check for those first, and if I see that they haven't been paid.

Um, we will, depending on the status of the agreement, if it's terminated, or if it's, you know, usually if it's terminated and we have to pay out.

The revenue, um, we will then recover those expenses against the revenue, and then I will distribute then.

If that's not the situation, if it's an active license, um, active agreement.

We would then go in and try to recover the expenses by invoicing the actual.

Uh, licensee to make sure that we are recovering the expenses before we're actually distributed.

And are your legal expenses, um, living in your database, or…?

Yes, they are living in Intium, so then those are tied to the actual agreement and technologies associated with it.

And then it's all kind of set up in a way where, again, the post-licensing manager.

Can go in, and as she receives the check that was, uh, paid from the, like, from the expense reimbursement.

She'll go in and kind of mark those off, and then it'll kind of decrease.

The expenses, whether or not it's, you know, up to a certain point, I'll, you know, obviously we're trying to get it down to zero to have it paid.

But, um, she'll then go ahead and decrease the expenses, and then move on from there.

Okay, and you're using… you're basically using the reimbursement rules in your database to kind of… check off what's been paid.

Correct. Yep, yep. Exactly.

Okay. Right, so Amanda, I'd like to turn it to you. How do you generally deal with expenses?

Um, so this is one of those areas where I'm gonna say there's a standard.

That everybody learns, that we have in place, processed, and documented, but everything is an exception, right, in tech transfer.

Right.

So, while we do distribute as money comes in, if we have invoiced the licensee.

For patent expenses, and they have outstanding invoices. We will hold the revenue until we either receive that payment or until we know for sure that we're going to receive it.

Um, if it's a, you know, a licensee, we have a really good relationship with, they always pay their invoices, even if maybe it takes them a little bit longer.

In those cases, we won't hold, we'll go ahead and distribute.

If it's unlicensed, we will recover. Um, from the revenue for, uh, any of the unreimbursed expenses that are tied to the license.

Um, we… we have what we call escrow, um, because we… we will hold, um, for example, option fees.

We will hold those until, um, we know whether or not.

The option is going to turn into a license with reimbursement.

And if it does, then we will go back and distribute that.

Option fee. If it doesn't, we use that option fee to recover expenses.

Great. I love that using that, uh, escrow, because that's a very, like.

Familiar term, so I really… I think I'm gonna start using that when we need to use that and make it more official.

How about non-patent expenses? We will… we have a fund that we set aside where we'll sometimes do, like, prototyping or proof of concept.

Things. We would not ask a licensee to reimburse that directly.

But when it comes to, basically, if there's license income, we are going to pay the institution back for that money that we spent on, say, a prototype, um, before we distribute to inventors. Um, do either of you.

Kind of run up against that, um, or have anything else to add on that topic?

So, the only non-patent expenses that we have, we do have a license, uh… out what we like to call click licenses, but basically what that means is that this particular IP.

Uh, it's set up as a credit card situation that people.

From other… into third parties would buy this test. That goes out. Then the test, when they buy it.

It is then kind of… it generates a… invoice or a PO number, and that the department that's involved with this test.

We'll send everything out to this third party, right? And there's shipping costs involved with that.

So then, when we are paid, we kind of break it down between admin, the license fee, and the shipping cost.

Um, so the shipping costs we then look at as non-patent expenses, and then we will.

Reimburse that shipping cost back to. The department that actually sent it out. So it works more like a pass-through.

So that's pretty much the only non-patent expenses that we deal with.

Okay. Okay. And a question came in, um, are you tracking.

Reimbursement versus recovered separately in your database.

Yes, so, um, that database, you can… go in and you can look at it and recover.

What's… not reimbursed, and then it shows also what is reimbursed.

Okay. Okay.

So we do a little bit of both.

We do, too. If it's… if it's reimbursed, it's gonna be tied to an agreement financial term on the agreement.

Right.

And if it's just recovered, it's just going to be linked to the expense. Um, and so we can break that out. We do break it out on our internal reporting.

Yep.

Okay, that's a great point, because. You really can only ask for reimbursement once. You can't reimburse multiple times.

Um, and I think that's an important distinction to make. Um, so I'd like to move, kind of, to non-inventor distributions. Um, we did have a question about IAAs come in, um, so I think we'll start there.

How do you deal with IIAs? Are they that much different than, say, another inventor? Um, I'll start with you, Amanda. Can you talk a little about how you've approached IIAs?

For us, they're very similar, because the IIAs do break down, um.

That, you know, the rates have been negotiated. Um, for who gets what and how much, and, um, even, hopefully, it's been negotiated well enough that it even tells us specifically where in the distribution we're supposed to take.

The percentage to the co-owner. Sometimes it's, um, off the top, sometimes it's not. Um, it depends on if it's gross revenue or net revenue. Um, and so we do have to pay careful attention to the language in the IIA to make sure that we're calculating correctly.

Um, but… for us, you know, all the calculations are the same for everybody, it's just a matter of when in the process we do it.

Yeah, Kevin, how about you?

Yeah, same kind of process, um, with the IAs, it's usually in the… in the… agreement itself, it's in the… the contract, um, so typically what I'll do is I'll look at the contract and see.

What the I percentage is, what. Northwestern's percentages, um, meaning Invo, um.

And how it's paid out, so it's usually broken down in that agreement that's done.

With the IA involved. And usually, again, I'll go in and out, actually pull the agreement and look at it, but… We have gotten really good at.

Putting in the percentages and the activity of the distribution that I'm working with, so I kind of see it.

All up front first, but I'm like, hey, wait a minute, let me make sure this information is updated.

And then I'll go into the, again, the agreement itself to make sure and look at the percentages.

And then start the calculation that way, from that perspective. So, um, but it is looked at as a regular.

Kind of… once I set up. The, uh, the profile of the calculation.

It's just distributed just the same as a regular distribution.

Yes.

Great, okay. Um, in the… we're kind of running up on 20 minutes left, this time is flying, uh, we're having so much fun talking about revenue distribution, um, that I want to kind of keep moving. Um, are there any other non-inventor distributions that you feel like.

Are worth talking about, um… I'll throw it to you, Amanda. Um, there's sort of this buffet list on… that I had pulled together of ones that I've seen. Um, are there any that are particularly a pain, or you've had trouble with?

I think for us, the biggest pain with non-inventor. Um… distributions are going to be when the license has multiple.

Inventions, and they don't all have the same co-owner. And so then you have to, um, you know, for us, we have to kind of manually calculate outside the system.

Because only some of it's going to apply to the inventors on one.

Invention, right? Because that's the only one that's gonna have the co-owner amount withheld.

Um, and those can get really tricky. And that's… you know, a little… a little bit frustrating, but it can be done.

And we do it.

Yeah, that sounds like a nightmare. Getting a headache, just sort of thinking about it. How about you, Kevin?

Yeah.

Yeah. Yeah. Yeah, I think for me, um, the tricky ones will be when the policies are slightly different, and then, so, say, like.

I'm just throwing out one of our policies. I think it's Policy 2.

Where, um, the distributions would… the line item or the percentage would go to research accounts.

And research accounts are kind of tricky to look for in our system.

So, um… I would say, for me, that would be the… the biggest issue is that when you have these different policies and the different policies have to pay to.

You know, research. Accounts, and you have to kind of search.

For that, and… just kind of bring it all together and do a little bit more investigating than normal.

Yeah, and so I've noticed a few questions in the Q&A and the chat. Um, there's also.

Basically grants or other funding sources that have revenue-sharing provisions, which oftentimes.

Are just kind of forced on us. Um, as part of, basically, the… Researchers are taking the money, um, and that can be a big pain.

I would say a question came in about how often that's happening.

It's not happening… more than a couple times a year for me, but I imagine over the course of the next year, it's going to be more and more frequent as funding sources change and evolve, and… You know, I imagine…

You know, as things change in the world, I imagine. The… the eyes on what we are doing are only gonna get more interesting, um, if they think there is money at the end of the trail.

So I think it's something we should all be very aware of as professionals, that this is only going to be more looked at. Um, so I'll throw that to you, Kevin.

How often are you seeing, kind of, um, grants or funding sources that… that are just kind of coming in with this already baked-in percentage?

Okay, lucky you.

Wow.

I have not seen that yet. Um, and I… yeah, and again, yeah, and again, it's… But it's been my first year, and I feel like a lot of, kind of, the heavy lifting was done prior.

To the position when it comes to that, but… Right, exactly. Exactly.

Okay. So they're hiding and waiting for you. Yeah, how about you, Amanda?

Um, I'll say two things about it. One, um. We… if we had a checklist, like a physical checklist template, this would be on it.

Check the funding of the inventions that are in your license. That would be, like, number one or number two on that checklist.

Um, and then our office has worked really hard to, um, partner with sponsored research.

So that when there are intellectual property terms in that sponsored research agreement, our office is involved in it.

Um, so those revenue sharing terms aren't a surprise to us, um, which is really helpful, and I know that's.

That's difficult for some schools. Um… But when… when it does happen, um.

You know, we… we have to check, there's revenue sharing, we just have to do it.

Um, and it… for us, it's not any different than an IIA, because they're a co-owner, just like any other.

Joint invention that we would have.

Yeah. Well, thanks, and Hannah put a very thoughtful answer in the chat, um, of how… kind of complicated it can be if you're trying to figure out how much of that funding source was allocated to it, because oftentimes, I know on our disclosures.

They're just listing all the funding sources, not, oh, 10% was this, and it's not being called out. So, it can be, um… very complicated. Um.

I'm gonna quickly get into inventor percentages, I wanna get through everything, um, even if we're kind of flying through. Um.

Are either of you involved if inventors can't agree? Amanda's shaking her head. How about you, Kevin?

No, not really. So, when inventors can't agree, we usually… we have a, um, policy.

Which is a modification form if they're not agreeing on percentages.

And what we do is that we. Take that form, we give it to each inventor, right? And the inventors, then they kind of fight it out themselves, right?

They put in their percentages, you know, it all kind of happens behind the scenes, you know, where they… put in the percentages, what they think, they sign off on it, um… the… the thing that we… include in this actual form is that it has to be signed off by their dean, so then the dean kind of… he's…

That that person, he or she, is the one that kind of steps in to make sure that everyone agrees in that sense, but… We don't personally step in and, you know, try to arbitrate and try to figure out what percentages they could get, because that could get.

Probably real tricky, real fast, so…

Right. Our standard answer is, if they can't agree, is we will kind of send it to outside patent counsel.

And they will… they will basically determine what inventor percentage, and you're gonna have to agree to that, and we don't know what that's going to be. Um… So…

Right, so, yeah, we… kind of the same thing. We have a console where they, um… outside console, where they… well, they… it can be sent to arbitration.

And from there, that's how they kind of figure it out, and they come back, again, with the sheet.

And have it all signed. It's all nice for us, we all agree.

I look at the sheet and I say, okay, they agree, it's called modification form, by the way, and this modification form then goes into our.

Ntm database, and then we proceed with the calculation.

Great. Um, so what about when an inventor doesn't want to receive their.

Share. Um, Amanda, I'll start with you on that one. What have you done when they don't want… when they say, like, I don't want it donated, or something like that?

We have a form for the inventor to redirect their royalties.

And generally, it would be redirected to their department. Um, but the form does specify that it cannot go to any account that they would have control over.

So, it would have to be a general… fund or, um, an account for their department overall. It can't go directly to.

Their lab.

Yeah, so I've run across this situation a couple times so far within the.

Great. Kevin, do you have anything to add there?

Within the year, um… one individual wanted the… their share donated, and usually when we donate it, we donate it to the department.

And then that's pretty much it. So we kind of change it, and then after we do the calculation, we just kind of take it from the individual level.

Added to the department chair, and then just distribute it straight to the department.

So…

Great. Um, now I want to specifically ask, um. What if… there is a… we've had it with helpful grad students who are not an inventor.

But the inventor, you know, they were so helpful, they want to include them as an inventor or make sure they get a royalty.

I'll kind of ask in the same order. Amanda, what have you seen there, and how have you solved it, or… what was your policy?

Um, we try to say no. Um, but we have done this on a few occasions, but we make it clear that.

Um, it's… it's going to come out of the lead inventor's share, usually.

And there are tax implications. At that point, because, um… you know, and we can't give them advice on that. We recommend that they go see a tax advisor for those questions.

Um, and usually when we tell them that they're going to be tax considerations.

They change their mind and don't want to do it. Um, which is great, because it's less complicated for us.

Um, but I think I can… I can think of twice in the last 6 years where we have done that.

We've done kind of a similar thing, where we say, like.

If you want to share with them, you can write them a check, like… It can be a gift from you, which then… kind of answers that tax implication question. Um… Kevin, do you have anything to add there?

You know, I do not. I have not been faced with that situation yet, where that dispute has happened, so… I'm probably… it's probably waiting for me, but, um, I have not been able to present that as far as an issue so far.

Okay, so a few questions have come in, um, and this is a topic.

I've meant to get to, and so we'll touch on it now. Um, how about deceased inventors, um, where they can't… you know, redirect it somewhere. Um… Um, Kevin, do you have any plans for, kind of, deceased.

Inventors and how that plays out.

Wow, that's a great question, because I'm actually dealing with that right now.

We have a deceased inventor where, um… it's… Luckily, um, the… I've gotten the information.

From another inventor when we sent out the distribution statement. This is the reason why we kind of like to be transparent as well by sending out the distribution statement to each.

Each inventor. Um, one of the inventors came back to me, and they were like, oh.

The Inventor X. They passed away, but here's… the inventors.

Wife's information, right? I'm like, great, right? Makes my job a lot easier. So… From there, um, we usually… receive the information, and we turn it over to our general counsel.

And our general counsel will try to go through the legal aspects of trying to find out if they are the… or the person that I.

I'm sending to them if they are the correct execute… uh, not executioner, executorship.

Of the estate. So, um, then from there, we'll get a.

You know, confirmation, and then we'll go ahead and distribute to the person that's the executorship of the estate.

Great. Thanks. Um, there's a question, um, about donating shares to outside charities. I know our answer would be, kind of, as we laid out earlier, you can do that on your own, um, but.

We are going to, as tech transfer, facilitate that piece. Um, I wondered if either of you would have had a different answer to that question.

No.

No, probably the same as you. Like, once we donate… or not send it to them, then it… they would donate to whatever charity they would want to.

Yeah. Um, and so… How have you, this is a… this is a Pandora's box, um, so I'm glad it came up, um, but… We could probably do a whole webinar on this, is, uh, if there's a situation where it's later determined.

Where someone was an inventor on a patent, but they weren't earlier.

How have you dealt with that? Um…

We generally don't retroactively change anything, but they would receive revenue moving forward.

Kind of the same, yep.

Right.

Okay. Yeah, because I can't imagine trying to… kind of retroactively do it. And so that's where we, in our… when we do a more complicated royalty net income sharing agreement, um.

Mm-hmm.

We say, inventors, you can meet and re-evaluate. I think there's a certain time every 5 years or something. Um, and it will change from then on, once you re-agree, but we're not gonna look backwards, because that would just be…

Right.

A nightmare. Um… Quick question about, uh, monetizing companies' stocks and distributing that revenue. Uh, I'll jump in there, because we've done.

Kind of a lot with equity. We had an agreement where we received equity in lieu of a license fee.

Um, and so that was distributed under the Net Income Sharing Agreement.

Um, my institution also then made a cash investment in that company. That piece was not distributed, because that equity was received for… they… bought it. Um, and so we kept those very separate.

I… I can only imagine that's the kind of thing that's gonna come up more and more often, um, so, you know, we make it very clear that, you know, if there is equity in a company, it needs to come through the license agreement, um.

Basically in lieu of a cash payment. Um…

We are very similar. We, um… we actually break it out. We have a very detailed document on our website that explains how we.

Treat revenue when it comes in. And one of our categories of revenue is equity and equity-like revenue.

And we just want to make sure that it's clear. How we treat that, and for us, it is… It's just like any other revenue.

For the most part. Um, I think the biggest difference is that for us, equity, we assume that.

Every technology that is on the license agreement contributed to the value of the company.

And so, every invention. We would distribute to everything equally across.

Versus if it's, like, running royalties and there's a product, we distribute dust to the.

Inventions that are related to that product. So equity is very specifically across the license.

Yeah, just to add on, it's kind of the same way. We have a special policy in place on our website in reference to equity.

Um, we had the option to reinvest. Um, that money, if we… if we choose… into different stocks, so we could reinvest it, or we can pay it out if it's… we decide not to, or if it's, uh… Um, what do you want to call it? It's…

That equity is liquefied in the way where we. Liquidated, I'm sorry, liquidated in a way.

Where we would actually pay it out as normal royalty. Distribution.

Yeah, we've treated it, to answer your question, Matt, we've treated it like it's… no different than other money coming in. We don't actually pass the equity.

We do have rules that govern when it… can be sold, um, because the thought is, is we don't want to be sitting there holding.

The equity have a… you know, have this… price spike, and then a liquidation event later, um, and then the price has dropped, and then.

The inventors are looking at us like, why didn't you sell when it was at its peak? Um, so we try and have rules that govern that.

But it's sort of a gray area. Um, I want to get to kind of this last topic, um, because this is something that always comes up, and people have lots of questions about it, is finding lost inventors.

Um, and so, I think the first thing I'll say is, like, there is no right answer. There's no easy way to do this if you're looking for a Jane Smith or a John Doe.

There are only strategies. Um… So, I'd love to kind of turn it over, I'll start with you, Amanda. What are some strategies you used… you have used for finding inventors.

Um, we start with LinkedIn, usually. Well, actually, that's not true. We start with asking the inventors that we can get in touch with, do you know where this person is?

Um, but so many times, it's a grad student from, you know, 15 years ago.

And so they've, you know, we've lost contact. So, LinkedIn. Um, I'm a big fan of those sketchy websites that seem like scams, because they can actually be helpful.

Um, I… I haven't specifically tried this yet, but last year at Autumn University, someone said, I wish I could remember who it was, um, I think it might have been Tiara.

But she said she uses Microsoft Copilot to help her find.

Inventors that she can't find. Um, and I would love to know more about that, um, because I haven't tried.

Doing that yet, uh, using AI, but I think that could be really helpful.

But, um… Google is your friend.

Sorry, Google is your friend. Kevin, do you have any… any parting thoughts on finding those inventors who have left?

Showing pictures of that.

As you know, I… I start off with the inventors, that's the one good… again, that's the one good reason why I like, while we actually, like, send our distribution statements to every single inventor.

On… or that's associated with that statement, and then, say, like, if an email bounces back… I've had great success with just reaching out to another inventor and saying.

Hey, this person's email bounced back, have you. Been in touch with them, do you have an email or a phone number.

On this person, and… you know, surprisingly, 9 times out of 10.

They have information. Oh. Use this email, call this number.

And I'll call and… You know, I'm able to contact the inventor, um… Outside of that, if it gets really tricky and I can't.

Go the inventor route, I would then probably look at LinkedIn.

And, you know, see if LinkedIn has some information, or… Last but not least, again, Google, you know, being able to Google and look up the person and seeing what university that they're at, so just kind of going down those routes, and.

Usually, it's… it's a good… it's a good… I've had good success doing it that way, so, um, I would definitely try those methods.

Yeah. Um… Great answer, and uh… there's also a great question that came in, or a statement.

Is… you should always ask for email addresses that are outside your institutional emails.

Um, at the time of disclosure, that can kind of head off a bit of that plan.

I've even advocated for including two, um, because everyone has multiple personal email addresses, um, it makes life easier. Um…

Yes, that's very correct. I'm sorry, I forgot to add on to that, because we actually just implemented.

Implemented that into our actual distribution statement going out. Where we're asking for secondary emails outside.

Of the… a lot of the inventors, they're using Northwestern emails, so we're like, okay, well, if that email… if you decide to retire.

Or that email just becomes inactive. How else can we get in touch with you with a Gmail or whatever email that you use?

Of your choice, so we just started doing that, and. Adding that once we get those in.

We'll add those to our system to actually have as a backup email.

Yeah. Um, so… someone also had a tip, um, some smaller journals include current and new addresses for co-authors in older articles, um, so that could also be a resource, so thank you to whoever submitted that. Um, really quick, we're on time, pretty much, but I do want to touch on this, because it's very important.

Um, is how long do you hold, um. Money for inventors that are lost. Um, we follow the… I'm in California, so we follow the achievement rules in California of when we have to basically give it to the state, and the state will then hold it, um, which is its own kind of.

Adventure and can of worms, but uh… I'll turn this question over to, uh, Kevin and Amanda as a last question. Um, so, Amanda, can you start us out?

It's a complicated question for our office. Um, we are a state institution, and so… Um, you would expect that we would be a sheeting, but we have not been, um, due to some conflicting answers we've gotten from various.

Members of OGC, and also in, um, central accounting. Um, so in the past, we've just been holding onto that money in perpetuity.

Um, and we've had conversations about, you know, should we do something with it at some point in time.

Um, but I do think that we are now in the process where we are going to move forward with a sheeting.

Um, so we are… we are trying to put into place, um, all of the information that we need to be able to do that moving forward.

Great. Kevin?

So this is something that… so this is something that we have on our platter right now, as far as the sheeting. We are not, uh, actively a sheeting.

Um, we are talking with our general counsel on how to.

Come up with a procedure to… and a policy to correctly achieve. Um, so for right now, we're just… holding on to the money until we kind of find, you know, we're still looking for.

Inventors, because the money technically is not… distributed and into… check form where we sent it out, so it's just kind of sitting.

On our books right now in NTM. So, um… But we… we are, we're just kind of holding on.

To what we have, and with hopes. Of finding people, and, you know, surprisingly enough.

Two, three years later down the line, I found some people that… older… Uh, from older fiscal years, where they just magically pop up. So, um… That's pretty much our… our process at the moment.

Yeah.

But we are actively searching other ways to kinda… if we have to, is she, so… Yeah.

Very similar.

Yes.

Yep, it's always an adventure, and so that actually brings us up on time. Um… There's so much more we could have got into. I feel like we could have part two and part three. Um, so again, I'll end with a plug for Autumn University. Um…

We'd love to see you there. Um, I'll turn it back over to Ashley for a… final statement.

Thank you, Eric. On behalf of Autumn, I would like to thank our panelists for the informative presentation today, and thank you again to our sponsor, Marshall Gerstein. A recording of this webinar will be available for viewing in the Autumn Learning Center within a week of this event.

It is included in your registration. Please complete the webinar evaluation, which will open immediately when you sign off the session, and thank you for being part of today's presentation.

Have a great afternoon, everyone.