OF RECORD: Penn Center for Innovation Announces Changes in Income Distributions to Faculty Inventors

The University periodically revises and updates its policies and procedures regarding patents and tangible research property, to help ensure that such policies and procedures keep pace with best practices and national trends in this highly significant area. In accordance with the Patent and Tangible Research Property Policies and Procedures of the University of Pennsylvania originally published on April 21, 2015 and revisions published July 12, 2016, the proposed changes were approved by the Penn Center for Innovation Steering Committee and President Amy Gutmann.

—Dawn Bonnell, Vice Provost for Research

The Penn Center for Innovation (PCI) announces two adjustments to Penn’s license income distribution practices, which will provide immediate and tangible benefits to faculty inventors and their research activities.

First, in recognition of the strong and consistent growth of Penn’s licensing income over the last decade, the University has authorized a reduction in the current Initial Deduction under the distribution formula of the Penn Patent Policy from the current rate of 14.5% to a new lower rate of 10.0%, effective as of July 1, 2017 for fiscal year 2018.  The result of this change is that all distributees will receive a greater portion of licensing proceeds from the commercialization of their inventions.  

Second, in parallel with this reduction, PCI will now make certain distributions on a quarterly rather than annual basis. During the first quarter of fiscal year 2018, the following changes will be implemented:

Quarterly DistributionsLicensing income received by PCI will be processed on an agreement by agreement basis, within 45 days after the end of each quarter in which distributable funds were received. Currently this is done only once at the end of the applicable fiscal year.  Here’s how it will work for the distribution recipients:

Inventor’s Personal Share1If an individual inventor’s share of distributable funds for an agreement is greater than or equal to $5,000 during any quarter of the fiscal year, the inventor will receive a distribution within 45 days after the end of that quarter. If an individual inventor’s share of distributable funds is calculated as being less than $5,000 during any quarter of the fiscal year, the inventor will receive a distribution at the end of the quarter in which the fiscal year-to-date cumulative amount due to the inventor (for that agreement) equals or exceeds $5,000 or at the end of that current fiscal year, whichever occurs sooner. 

Inventor’s Research Activity Share1All research activity shares will be distributed quarterly.

School, University, and Department SharesThese shares will continue to be distributed annually within 45 days after the end of the fiscal year in which the distributable funds were actually received.

We hope that these changes further spur the great work of our Penn inventors as they advance research innovation around the world. 

Please feel free to direct any questions or concerns to PCIinfo@pci.upenn.edu or (215) 898-9591. 


1 Executed Participation Agreements and Income Allocation Agreements (and Direct Generation Cost Forms, if applicable) must be in place prior to the receipt of all distributions to inventors and inventor labs.