The MoES has provisions on start-ups’ ownership proportions for the university/RDI, the research team, and (as the case may be) private investors. Most universities are affiliated with the MoES, and spinoff companies from universities adhere to MoES rules. Those rules state that a third of the ownership can be private; the university may own the above minimums (either 25 percent or 33.3 percent depending on the start-up legal status) and the rest of the new company can be the property of the research team.

A spinoff finds it difficult to sublicense the IP since the company does not own the patent that supports the company, and the universities do not grant licenses of IP to the companies on an exclusivity basis. In consequence, the IP may not be resold (sublicensed) to third parties by the spinoffs unless this is stipulated by Federal Law. However, according to the MoES, a planned amendment to Federal Law 217 would change this situation (Kolesnikov 2011). As a matter of fact less than 10 percent of patents granted are contracted away either in patent assignments or licenses (Tables 7 and 9) and exclusive-license contracts represent less than one fifth of patent assignments or nonexclusive license contracts (Table 9).

|**Table 9: Registration of license contracts and patent assignment contracts**|
|---|

||**2005**|**2006**|**2007**|**2008**|**2009**|
|---|---|---|---|---|---|
|**Patent assignment contracts**|**1,281**|**1,451**|**1,674**|**1,524**|**1,054**|
|**Exclusive license contracts**|**167**|**212**|**2**76|215|228|
|Nonexclusive license contracts|674|751|902|1,005|1,083|
|**Total**|**2,122**|**2,414**|**2,852**|**2,744**|**2,365**|

Source: ROSPATENT Annual Report 2009.

Besides the right to transfer the IP, the distribution of royalties is a key aspect to guarantee greater efficiency in technology transfer. However, further improvements in Russian legislation are needed to define royalty distribution. The evidence implies that shifting the royalty distribution formula in favor of faculty members (e.g., allowing faculty members to retain 75 percent of the revenue, instead of 33 percent) would elicit more invention disclosures and greater efficiency in technology transfer (Phan and Siegel 2006). Indeed, Markman et al. (2005), using data on 113 U.S. technology transfer offices, found that universities allocating a higher share of royalty payments to faculty members tend to be more efficient in technology transfer activities.

The inclusion of intangibles such as IPR as an asset of the start-up is a welcome development, but skilled independent valuation of high-value IP is nonexistent. According to Federal Law 217, items like equipment and facilities can be considered assets of the new company. The IP can be considered an intangible asset and its value can be decided by the start-up founders up to about US$ 17,000 (Rub 500,000) but would need an independent evaluator if the IP value is higher. This requires skilled valuation of high-value IP, but expert opinions consider that the Russian market does not provide this service.

As IP is an intangible asset in the start-up’s balance sheet, it could be considered part of the start-up capital for financing entities like Rusnano and the Russian Venture Company’s venture capital funds. Federal Law 217 also states that IP may not only reach the marketplace through spinoffs but also through license sales. IP belongs to the university, not to the department where the inventor or research team is hosted, but the latter gets the larger part of the royalties. Usually, the contract is between the professor (inventor) or the research team and the university, and they then sell the IP. Registration of license agreements is mandatory by law.

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