Internal Revenue Service Technical Advice Memorandum
Internal Revenue Service
TAM 2002 49002, 2002 WL 31736299 (2002)
- Written by Tammy Boggs, JD
Facts
[Editor’s Note: The factual background described in the technical advice memorandum presents a hypothetical case.] A state university professor, Professor X, receives a salary for performing teaching, research, and administrative tasks. Over half of the professor’s time is spent on research. Professor X develops an invention. Under state law, an employee-professor’s invention belongs to the university. The university may choose to patent and license any invention, in which case the university is guided by state law to obtain an assignment of rights in the patent from the professor. Professor X’s invention gets patented, and Professor X assigns his interest in the patent to the university and enters a royalty agreement with the university. Under the agreement, Professor X will receive a certain percentage of royalties that result from the university’s licensing of the patent. The university licenses the patent to a manufacturer, which develops and sells a product. The university treats the amounts subsequently received from the manufacturer and shared with Professor X as royalties, not salary.
Rule of Law
Issue
Holding and Reasoning ()
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