Simplified Technology Transfer Revenue Distribution

Frequently Asked Questions About Technology Transfer 

What is technology transfer?

Technology transfer (also known as “tech transfer”) is the process by which a university, laboratory, or research institution commercializes and monetizes the work of their faculty, research staff, or other employees. The department responsible for this activity is often called the tech transfer office (TTO).

The TTO will evaluate the research, discoveries, or inventions for market potential, and secure the appropriate patents or trademarks. They may then license the intellectual property (or IP) to an existing business, or become involved in creating a new start-up business or joint venture that will license the IP and bring it to market. As a part of these technology license agreements, the TTO will collect royalties, license fees, or other payments from the licensees, and distribute portions of those payments back to the original researchers or inventors.

What are the types of technology transfer?

The main types of technology transfer are licensing, assignment, collaborative research, and material transfer, each defined by how it allocates rights to the intellectual property. The intellectual property involved in tech transfer may be an invention, patent, process, or trademark with applications in biotechnology, pharmaceuticals, medical devices, agriculture, food processing, computer software and hardware, energy, transportation, or any other industry that depends on new innovations to drive business, save lives, and/or improve our quality of life.

Each type is covered in detail in our guide to technology transfer agreements, and our biotech technology transfer guide explains how these models work in the life sciences.

What is an example of technology transfer?

The development of COVID-19 vaccines is one significant example of technology transfer, driven by knowledge sharing across institutions. In 2020 and 2021, over 200 tech transfer agreements between universities, pharmaceutical companies, and vaccine manufacturers enabled the rapid global development and distribution of these life-saving vaccines. This unprecedented level of global medical collaboration allowed billions of people around the world to be vaccinated in just a few years.

What are the benefits of tech transfer?

Tech transfer benefits scientists, institutions, corporations, start-ups, students, and the general public.

• Scientists, inventors, and researchers receive remuneration for their work, and an added incentive for research that could have a significant commercial and/or societal value.
• Universities, laboratories and research institutions receive the funding needed to continue to pursue scientific, medical, and technological research and development, as well as education.
• Corporations benefit from extensive and wide-ranging research initiatives, without needing to spend as much time and money building their own research infrastructure.
• Start-up companies are often developed in response to new tech transfer opportunities, inspired by research innovations to build a new business and bring a new product to market.
• University students benefit from participation in sophisticated and impactful research projects led by their professors.
• The general public benefits from the innovations that are brought from the idea stage into commercial applications through the technology transfer process, and from the resulting economic development.

How does the technology transfer royalty process work?

The technology transfer royalty process moves licensee payments through five stages: collecting royalty statements, validating them against the license terms, calculating each recipient’s share, paying recipients, and reporting for audits.

The TTO first gathers statements from each licensee, which often arrive in different formats and currencies, and standardizes the data. It then checks reported sales against the agreement, calculates distributions under the institution’s policy, and pays inventors, labs, and departments. The office keeps a complete record of every step to support later audits.

How do tech transfer offices distribute royalty income?

Tech transfer offices distribute royalty income by applying the institution’s revenue-sharing policy, which sets each recipient’s percentage share. Most policies deduct licensing and patent costs first, then split the remainder by percentage, and the TTO pays each recipient on a set schedule.

Royalty Tracker® applies those rules to incoming royalty reports, so every share is calculated automatically.

What technology transfer software solutions do tech transfer offices use for royalties?

Technology transfer software solutions for royalties capture license terms, standardize licensee statements, calculate distributions, and report to recipients. MetaComet®’s Royalty Tracker®, Sales Aggregator, and Royalty Portal cover each of those steps and work alongside an office’s existing tech transfer platform, ERP, or financial software.

Spreadsheets can handle a small portfolio, but errors multiply as licensees, currencies, and recipients are added. Dedicated software applies each agreement’s rules automatically and keeps an audit-ready record of every payment.

How should a technology transfer office choose a payment system that connects to its royalty data?

A tech transfer office should choose a payment system that accepts royalty calculations directly, so every payment matches the distribution owed without re-keying data.

Start by confirming that the royalty software exports payment files in a format your finance system can import, and that it works with the ERP or accounts payable platform your institution already uses. Then check that each payment can be traced back to the licensee statement and the agreement terms behind it, since that trail supports audits.

Royalty Tracker® generates standardized payment files that upload to any ERP or payment platform, and it integrates with NetSuite, QuickBooks, and Tipalti.

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