Oxford case (6): understanding university revenue sharing policies

shareIP Draughts hadn’t planned to write this article. He thought five detailed articles on the case of Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200 (Pat) would be enough.

But the case keeps provoking thoughts about IP and universities. One that has caught IP Draughts’ attention is the purpose of a university’s revenue sharing policy.

To recap, most UK universities have an IP policy that claims ownership of certain IP generated by its researchers, whether they are employees or students. Irrespective of the poicy, most universities will get a formal assignment from the inventors at the time an initial patent application is filed. An incentive for executing the assignment is that the inventors are typically entitled to benefit from the university’s revenue sharing policy. Universities have similar revenue sharing policies, and they are thought to be generous to the inventors, at least compared with what an employee inventor might receive for making an invention when working in industry. For example, this is Oxford’s:

Total net revenue Inventor(s) total General fund Department Oxford University Innovation
to £50k 85.7% 14.3% 0% 30%
£50k to £500k 45% 30% 25% 30%
over £500k 22.5% 40% 37.5% 30%

Some university policies don’t have the fourth column, which is the top slice taken by Oxford’s technology transfer company before revenues are allocated three ways: to inventors, department and university.

Where there is more than one inventor, they are typically asked to agree among themselves what proportions of the inventors’ share each of them will have.

As was discussed in the previous article, in the above-named case, ONI argued that the allocation to Mr Jing, a DPhil student, was an unfairly low percentage, 45% of the inventors’ share. The judge rejected this argument for several reasons.

What is troubling IP Draughts is the following comment from the judge on this subject:

169. In particular, without Professor Kapanidis’ work and leadership, there would have been no Nanoimager project at Oxford. Without Mr Jing’s work, the detailed development is unlikely to have proceeded as quickly or possibly in the specific direction it did. Dr Crawford also helped the project to a material extent. That situation seems to me a clear one for the two researchers most involved respectively (i) at a higher level on overall design over a long period and (ii) a shorter period of detailed design contributing more to the patents to share equally the larger portion of benefits with the individual making the lesser contribution throughout entitled to a lower share which is ultimately what was agreed.
170. I find that there was nothing unfair to Mr Jing about the process whereby that was the position reached. In making that evaluation I do not say that it is always appropriate (or fair) for a head of a project or department to share equally with some of those more junior who undertake more of the work and, sometimes, it can be appropriate to provide for independent review processes by those not involved (as are provided under the IP Provisions discussed below). It was however appropriate in this case.

These quoted paragraphs form part of a larger discussion by the judge about fairness in the negotiation of revenue shares between the three “inventors”. The discussion appears to indicate that the judge thinks that someone who was not actually an inventor of the assigned invention, but participated in related work or leadership, can fairly be allocated part of the inventors’ share under a university revenue sharing policy.

This doesn’t sound right to IP Draughts. The key word in the revenue sharing policy is “inventors” not “team members and leaders”. He would also point out that a slice of the revenue goes to the department, and this may be the appropriate route for rewarding (albeit indirectly) other team members and leaders.

Ultimately, if it is left to the individuals to agree, the true inventors can presumably agree to share with non-inventors. But where the inventor is a student, and the non-inventor is his professor, doesn’t this raise the very point that Mr Jing raised in the above case, ie that the power dynamic between junior and senior staff risks unfairness to the student?

IP Draughts is persuaded by the judge’s view that, on the facts of this case, Mr Jing was not treated unfairly. But he is troubled by the apparent endorsement of professors sometimes getting part of the inventors’ share when they are not true inventors. The judge tries to make clear in paragraph 170 above that this will always be appropriate. But the suggestion that it might be appropriate is not one that IP Draughts thinks should be encouraged.

As part of the fall-out from this important case, IP Draughts recommends that universities should think about what their revenue sharing policies are trying to achieve, and consider whether to revise them to make their intentions clear, particularly with regard to the rewarding of team members and leaders.


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4 responses to “Oxford case (6): understanding university revenue sharing policies

  1. Hi Phil
    I’ve had a look at Regulation 7, which defines researcher as the people caught by Part B of Statute XVI. Paragraphs 7 and 8 of that Regulation refer to revenue sharing with “researchers”. My reading is that Part B is focused on different types of IP creator, eg employees or students, and I don’t see anything there to suggest a wider category of team member contributors who are not, in legal terms, creators of the IP. But I may well be missing something from a quick look. And, of course, I accept that you know how it works in practice.

  2. drphilclare

    Thank you for an excellent and stimulating series of commentaries on this case. In this episode, though, I feel you place too much emphasis on the inventor, as legally defined. Research in universities really is a team effort, and often requires many hours of input from people who are not inventors but without whose contribution progress would not be made. You rightly observe that universities are more generous than other employers, and so let’s not propose to limit that generosity only to some members of the team.

    • Thanks, Phil. If that’s the intention of the revenue sharing policy, fine. My understanding was that it was intended to reward the inventor, as legally defined. If it’s not limited in that way, I suggest this should be made clear in the policy.

      • drphilclare

        Hi Mark,
        The Oxford regulations refer to the creation of IP, not just inventors of patents, and the rewarding of researchers, not solely “creators”. The policies refer to both inventors/authors (very important to be clear as part of your due diligence) and contributors (necessary for fair reward). The policy does express this, and practise reflects it. I believe there are similar policies, and certainly similar intentions, across the sector.

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