You can't do this normally. However, there is a patched version of notify-osd that supports it:

From Ubuntu 16.04 onwards:

You'll need to add two PPA's:

sudo add-apt-repository ppa:leolik/leolik
sudo add-apt-repository ppa:nilarimogard/webupd8
sudo apt update

Then install it like this:

sudo apt-get upgrade
sudo apt-get install notifyosdconfig

The configuration dialog should be in Applications->Accessories or notifyosdconf from the terminal. There's a setting for the standard notification duration as per screenshot above if you don't set it the --expire-time parameter.

Example:

notify-send --urgency=LOW --expire-time=1 --icon=face-laugh "test" "1 second"

Older versions: (9.10-14.10)

You'll need to add two PPA's:

sudo add-apt-repository ppa:leolik/leolik
sudo add-apt-repository ppa:amandeepgrewal/notifyosdconfig
sudo apt-get update

Then install it like this:

sudo apt-get upgrade
sudo apt-get install notifyosdconfig

The configuration dialog should be in Applications->Accessories or notifyosdconf from the terminal. There's a setting for notification duration as per screenshot above.

Example:

notify-send --urgency=LOW --expire-time=1 --icon=face-laugh "test" "1 second"

Unfortunately this is a bug, and the inability to configure the position of notify-osd to prevent it happening is a feature.

Luckily, in the spirit of open source, someone has created a patched version that can be configured and positioned manually:

http://www.webupd8.org/2011/05/configurable-notifyosd-bubbles-for.html