Innovation Services Fee
Office for Research & Innovation - Innovation Services Fee (updated 05/20/2014)
Background: The Office for Research & Innovation, as part of its responsibilities for the management of university intellectual property (ORS 351.220-250, and OARs 580-043-0006-0007,-0011,-0016) and technology transfer practice (IMD 6.205 et. seq., and UO Policy 09.00.06) provides a resource to the University community in intellectual asset creation, management and deployment. All research and outreach units depend on Innovation Partnership Services (IPS) support for the innovation-related technology transfer services that are vital to bring the tools, platforms, and their related services generated by projects into the marketplace.
In advance of any possibility for actual revenue generation, Innovation Partnership Services personnel assess technology and information assets, organize them for dissemination, acquire rights in them as needed, define strategies to promote their utilization as well as the reputation of University of Oregon researchers and the institution itself, and implement the strategies, partnerships and relationships that generate revenue to support the project.
Because of the uniqueness of the copyright and other spaces in which these activities occur, specialized expertise in Innovation Partnership Services is needed to accomplish these activities, which warrants a stable revenue source be determined.
The intent of this document is to clearly articulate the R&I Innovation Services Fee (ISF) structure to ensure predictability and fairness as faculty and staff continue on-going, approved innovation-related projects, develop new technologies and expand existing products, technology and services through Innovation Partnership Services at the University of Oregon.
What is the R&I Innovation Services Fee (ISF)? The R&I Innovation Services Fee on project revenue for specific R&I approved projects* represents a partial cost recovery mechanism designed to offset some costs of University resources (e.g., IPS personnel; legal fees; outside expert consultation as needed, etc.) used to support a portfolio of activities in which some projects may be revenue generating, some not, some projects may underperform while others excel. The R&I Innovation Services Fee does not apply when faculty and staff have entered, through Innovation Partnership Services (IPS), into a standard Royalty Sharing Agreement based on the royalty sharing provisions in the Oregon University System Internal Management Directives. **Because R&I receives a portion of revenue, the R&I Innovation Services Fee is considered to be contained within that portion. A project must have disclosed the relevant works to IPS and undertaken management of the intellectual property rights by UO in order to participate in the ISF program.
There are two separate components that comprise the R&I ISF (FY15 = 13.4%):
a) Royalty: A percentage on royalty revenue received from license agreements by approved UO projects. This component of the innovation services fee is akin to the percentage of royalty that is returned to the R&I as mandated by OUS IMDs, which currently funds traditional Innovation Partnership Services activities. The Innovation Services Fee component for this activity for FY15 is 8%.
b) Financial Administration: A percentage on revenue received from license agreements by Innovation Partnership Services for approved UO projects for R&I to manage associated financial transactions and accounts, additional risk elements (e.g., a reserve for legal liability associated with contracts or assets under Innovation Partnership Services management), and any other innovation project administrative needs. The Innovation Services Fee component for this activity for FY15 is 5.4%.
Waiver of Financial Administrative component of the Innovation Services Fee. Units may petition, on a project basis, the Vice President for Research & Innovation (VPRI) for permission for the unit to manage the financial transactions and accounts, and to assume all financial and legal risks and costs for the approved project. Prior to petition, the cognizant dean, director or other authorized official must approve the request. The petition will be considered in light of history, unit capacity, and institutional risk. With such VPRI approval, the administrative component of the fee is waived (FY15 = 5.4%) and the unit/organization structure assumes all financial and legal risks and costs for the approved project. Innovation Partnership Services will review these projects annually prior to close of the fiscal year to assure the conditions under which the waiver was granted have not changed and reconsideration is not warranted. Projects with Innovation Partnership Services-vetted licensing agreements and respective innovation services fee structure initiated and approved by the VPRI prior to July 1, 2012 are “grand-fathered” and do not need to seek VPRI permission.
*The VPRI approves certain projects to retain and manage revenue from license agreements, as well as managing all associated financial transactions therein (invoicing, accounts, etc. consistent with University of Oregon policies). These projects have been approved by the Vice President for Research & Innovation based on the understanding that they were created by many individuals working at the University of Oregon in their capacity as university employees that have either waived any personal share in royalty or where the Vice President for Research & Innovation has determined that given the circumstances, the most equitable solution is to recover all costs associated with the activity and reinvest the remainder in the project.
**Oregon University System Internal Management Directive 6.250(2) provides that: “In determining disposition of income, due consideration shall be given to the equity of all parties in the light of all circumstances surrounding the development of the invention or material.” IMD 6.250(3) provides for the recovery and support of technology transfer expenses and costs (R&I or the project itself) prior to distribution of net income.