Contents

§ 9.6 LICENSE TO USE PATENT5. The property may not be transferred by the donee in exchange for money,other property, or services, except for shipping, installation, and transfercosts 1096. The property must fit productively into the donee’s education plan 1107. The donee’s use and disposition of the property must be in accordancewith the fourth and fifth of these requirements 1118. The property involved must meet any standards that the IRS may promulgateto assure that the property meets minimum functionality andsuitability standards for educational purposes 112A qualifying contribution may be made to a private foundation if the gift satisfiesthe second and fifth of the above criteria, and, within 30 days of the gift, thefoundation grants the property to a qualified recipient that satisfies the fourththrough the seventh of the above criteria and notifies the donor of the grant. 113This deduction is computed in the same manner as is the case with respect tothe special rule concerning gifts of inventory. 114§ 9.6 LICENSE TO USE PATENTThe IRS addressed various aspects of contributions to qualified charitable organizationsof licenses to use patents. 115(a) Factual SituationsThis ruling posited three situations. In the first situation, a person contributes toa tax-exempt university a license to use a patent, but retains the right to licensethe patent to others.In the second situation, a person contributes a patent to an exempt universitysubject to the condition that a faculty member of the university who is anexpert in the technology covered by the patent continue to be a member of thefaculty of the institution during the remaining life of the patent. If this conditionis not satisfied, the patent is to revert to the donor. The patent will expire 15years after the date of gift. On the date of the contribution, the likelihood thatthis individual will cease to be a member of the faculty before the patent expireswas not so remote as to be negligible.In the third situation, a person contributes to an exempt university all of theperson’s interest in a patent. The transfer agreement provides that the universitymay not sell or license the patent for three years. This restriction does not result inany benefit to the donor; under no circumstances can the patent revert to the donor.109 IRC § 170(e)(6)(B)(v).110 IRC § 170(e)(6)(B)(vi).111 IRC § 170(e)(6)(B)(vii).112 IRC § 170(e)(6)(B)(viii).113 IRC § 170(e)(6)(C).114 IRC § 170(e)(6)(A). See § 9.3(f).115 Rev. Rul. 2003-28, 2003-11 I.R.B. 594. 283