A Study on Running Royalty-Like Assignment of Patent Rights in Academia

Abstract

A Study on Running Royalty-Like Assignment of Patent Rights in Academia

Universities tend to consider the possibility of assigning their patent rights in addition to licensing them to companies, since they themselves do not work their patented inventions for commercial purposes. However, universities and companies have a problem that it is difficult to determine the value of patent rights at the time of assignment. Therefore, a running royalty-like assignment agreement that can keep the upfront payment at the time of assignment of patent rights low and give universities a right to receive a running royalty-like consideration for assignment from the companies according to the sales by companies when companies work the patented invention in the future may be beneficial for universities.

However, the question arises whether it is legally valid for a university to demand a running royalty-like consideration for assignment to a company even after the assignment of a patent right. Therefore, we conducted a questionnaire survey in order to understand whether or not universities are actually making running royalty-like assignment agreements for patent rights and discuss the legal validity and issues of such assignment agreements.