New Guidelines In Place for Distribution of WARF Royalties

New guidelines for the distribution of royalty and licensing income from inventions held by the Wisconsin Alumni Research Foundation (WARF) have been put in place by the Graduate School.

The guidelines, which went into effect Oct. 1 and apply to any license issued after that date, direct a large percentage of the initial earnings from inventions directly to the research programs of inventors.

“The goal of this change is to provide support for inventors’ research programs and, thereby, the opportunity to create new concepts for future patents and licenses,” according to Graduate School Dean Virginia Hinshaw.

Distribution guidelines for the first $100,000 generated from royalty and licensing income call for 70 percent to be directed to the research programs of faculty and staff inventors, 20 percent to the inventor, and 10 percent to the Graduate School,

Previously, 65 percent was provided to the Graduate School, which distributed the money through an annual competition; 20 percent to the inventor; and 15 percent to the inventor’s home department or center. This distribution formula will continue to be used for income beyond $100,000.

Richard Leazer, managing director of WARF, said the revised distribution scheme is intended to both support the research of faculty inventors and encourage more faculty and staff to disclose their discoveries to WARF through the University-Industry Research Program, which is the designated university office for the disclosure of ideas, methods and technologies that may have commercial application.

“At WARF, our mission in life is to support research,” said Leazer. “This looks like an improved way to do that.”

In addition to the new plan, WARF will experiment with a quarterly transfer of funds to the university instead of an annual transfer as is the case now. The idea is to make money more accessible.

Earnings directed to inventors will be deposited by the Graduate School in separate accounts for each inventor. These will be non-lapsing, unrestricted research accounts, which inventors can use at their discretion.

Given a dynamic and fast-paced research environment, the need to provide additional and flexible support to faculty is critical, Hinshaw said. “The innovative ideas of our faculty, staff and students are key to UW–Madison being an outstanding research institution,” Hinshaw said, “and the goal of this change is to enable investigators to pursue their new ideas more quickly.”