# Royalty sharing for faculty inventors in India: what share of licensing income do professors get?

URL: https://zernyxhub.com/blog/faculty-royalty-sharing
Author: Sahil Sheikh, Regd. Patent & Trademark Agent, cRTTP
Published: 2026-10-20
Category: Technology transfer

> How royalty sharing works for faculty inventors in India: splits in published university IP policies, net vs gross income, co-inventors, startups and tax.

**Short answer:** No national rule fixes how much a faculty inventor gets in India. Each institution's IP policy decides. Published policies commonly give the inventors 60% to 70% of net licensing income, after patent and transfer costs are recovered, and several IITs and IISc reduce the inventors' share once income crosses ₹50 lakh or ₹1 crore. Co-inventors divide the inventors' share among themselves by written agreement.

You disclosed an invention, the university filed a patent, and a company has licensed it. Now the money starts to come in. How much of it is yours? The honest answer is: it depends on your institution's IP policy, not on any national law. But published policies follow a clear pattern, and knowing it helps you read your own policy, ask the right questions and plan with your co-inventors.

This article is for faculty members. It covers what national guidance says, what real Indian university policies give inventors, how "net income" is worked out, how co-inventors split their share, the startup route and the tax angle.

## What national guidance says

There is no central rule that fixes the inventor's share.

- **NISP 2019**, the national innovation and startup policy for higher education institutions, says IP created with substantial institute resources is jointly owned by the inventors and the institute. It does not set a licensing split between them. Its widely quoted figure of "up to 4%" is a cap on the royalty an institute should charge its own incubated startup, not the inventor's share. We cover NISP in detail in [starting a company as a faculty member](https://zernyxhub.com/blog/faculty-startup-india).
- **DBT's IP Guidelines 2023** leave royalty sharing to institutional mechanisms.
- **The model guidelines on IPR policy for academic institutions**, released for consultation by DPIIT's CIPAM, leave the inventor's share to each institution's revenue-sharing arrangement, according to published summaries.

So your own institution's IP policy is the document that matters. If your university has none, or it is silent on sharing, that is the first thing to raise with your IPR cell. Our guide to [university IP policy](https://zernyxhub.com/blog/university-ip-policy) explains what a good one contains.

## What published university policies give inventors

These splits come from policies published on each institution's website. Policies change, so always read the current version of yours.

| Institution | Inventors' share | Institution's share | Notes |
|---|---|---|---|
| IISc Bengaluru | 70% | 30% | On income after IP protection and transfer costs. Above ₹50 lakh, 20% of the excess first goes to IISc as overheads. |
| IIT Kanpur | 65% of the first ₹1 crore, 45% of the next ₹1 crore, 25% above ₹2 crore | 25%, 45%, 65% | On net earnings; 10% of each tranche goes to a service account. |
| IIT (ISM) Dhanbad | 70% | 30% | With an industry partner: 50% inventors, 30% partner, 20% institute. |
| IIT Jodhpur | 60% | 40% | On earnings net of transaction costs; 80:20 if the creator files at own cost after the institute declines. |
| IIT Mandi | 60% | 40% | On net earnings; payments continue after the inventor leaves. |
| Central University of Rajasthan | 60% | 40% | On net earnings; "researcher" includes students and postdocs. |
| Anna University | 60% | 40% | On total revenue under its inventor agreement; 75:25 for inventions made outside duty without university resources. |

The pattern is clear: **60% to 70% to the inventors** is common, and some larger institutions taper the inventors' share as income grows. Older government statements mention lower figures, such as up to one third, so policies vary widely across the sector.

**IIT Kanpur's split of the first ₹1 crore of net earnings**
First ₹1 crore of net earnings:
- Inventors (65%): Shared among co-inventors by agreement
- IIT Kanpur (25%)
- Service account (10%)
From IIT Kanpur's published IPR policy. The inventors' share falls in later tranches.

## Net or gross: what is actually shared

Almost every policy shares **net** income. Before the split, the institution recovers what it spent on the patent and the deal: drafting and filing fees, prosecution, renewals, foreign filing and sometimes the cost of the licensing process.

This matters more than the percentage. A simple example: a technology earns ₹20 lakh in licence fees and royalties. The university has spent ₹5 lakh on Indian and foreign patent costs. Net income is ₹15 lakh. Under a 70:30 policy, the inventors share ₹10.5 lakh, not ₹14 lakh.

**How ₹20 lakh of licence income becomes the inventors' share**
₹20 lakh licence income:
1. Costs recovered: ₹5 lakh of patent costs deducted
2. Net income: ₹15 lakh left to share
3. 70:30 split applied: ₹10.5 lakh to the inventors' pool
4. Co-inventor agreement: Pool divided as agreed in writing
Result: Your share
Illustrative example under a 70:30 policy that shares net income.

Most policies do not define "net" precisely, so ask your IPR cell three questions:

1. Which costs are deducted? Only patent costs, or also staff time and overheads?
2. Are costs deducted once, from the first income, or from every payment?
3. Are foreign filing costs deducted even if the licensee did not need those countries?

## How co-inventors split their share

The inventors' share is a pool. Most policies, including those of IISc, IIT Kanpur, IIT Mandi, IIT Jodhpur and the Central University of Rajasthan, ask co-inventors to agree in writing how they divide it, often at the time of disclosure. No policy we reviewed sets an equal split as the default.

Settle it early, while everyone agrees on who contributed what. Base it on inventive contribution to the claims, not on seniority or authorship order. Inventorship is a legal question, and adding or leaving out a person can cause disputes later. Our guide on [how to write an invention disclosure](https://zernyxhub.com/blog/invention-disclosure) explains the difference between inventorship and authorship.

## Students and external collaborators

Students are usually treated as inventors on the same terms when they contribute to the invention, and some policies say so explicitly. If you are supervising PhD students, read [who owns a PhD student's invention](https://zernyxhub.com/blog/phd-who-owns).

Collaborators from industry or other institutions are usually covered by the sponsored research agreement or MoU, not by the default split. Read that agreement before you assume anything about your share.

## What happens if you start a company instead

If the technology goes to your own startup, the deal changes. Institutions often take equity in the startup, and some charge a modest royalty. Under IISc's policy, for example, equity in an inventor-linked startup goes to IISc while royalties are still shared with the inventors. Your return then comes mainly from your own shareholding as a founder, not from the royalty split. Ask early whether the institution expects equity, a royalty or both.

## Tax on your royalty share

Under the Income-tax Act, 1961, Section 80RRB allowed a resident individual who is a patentee, meaning a true and first inventor named on a patent registered under the Patents Act, to deduct royalty income up to ₹3 lakh a year. The Income-tax Act, 2025, in force from 1 April 2026, carries a similar deduction for royalty on patents in Section 152, with the same ₹3 lakh limit. It is generally not available under the new default tax regime.

How your share is taxed depends on how the institution pays it and whether you are a named patentee. Confirm the treatment with a chartered accountant before you file.

## Practical checklist for faculty inventors

- **Read the current IP policy** and note the split, the definition of net income and any tapering.
- **Sign a co-inventor agreement** at disclosure.
- **Ask how costs are recovered** and request a statement of income and costs each year.
- **Check what happens if you leave.** Some policies continue payments to inventors after they leave the institution.
- **Discuss the startup route** before a licence is signed if you may want to found a company.
- **Keep your own records** of disclosure, filing and licence dates.

When you are preparing to pitch a technology or working out who in industry might license it, TT Co-Pilot, Zernyx's AI assistant for technology transfer, built for TTO teams and university faculty on Zernyx's proprietary technology licensing dataset, is a useful sounding board. For how licence income is set in the first place, read [how much royalty is fair](https://zernyxhub.com/blog/royalty-rates).

## FAQ

### What percentage of royalty do faculty inventors get in India?

It depends on the institution's IP policy. Published policies commonly give inventors 60% to 70% of net licensing income, and some reduce the share as income grows past ₹50 lakh or ₹1 crore.

### Is the inventor's share calculated on gross or net income?

Usually on net income, after the institution recovers patent filing, prosecution and transfer costs. A few policies use total revenue. Check your policy's definition.

### How is the inventors' share divided among co-inventors?

By a written agreement among the co-inventors, often signed at disclosure. Most policies do not set a default equal split.

### Do I still get royalties if I leave the university?

Some policies, such as IIT Mandi's, continue payments to inventors after they leave. Check what your policy says.

### Is royalty income from a patent tax-free in India?

Not fully. A resident individual patentee may claim a deduction of up to ₹3 lakh a year under Section 152 of the Income-tax Act, 2025 (formerly Section 80RRB), generally only under the old regime. Ask a chartered accountant.

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