Did your faculty member submit a written proposal to the industrial sponsor
outlining the scope of work?  In this situation I would review the proposal to
determine the breadth and depth of the undertaking.  I would then want to meet
with the faculty member to learn more about the project.  I would review
institutional policy with the faculty member advising him that the work will be
done within the framework of university policies and procedures.  Also, that
without an agreement with the company the faculty member has no obligation
whatsoever to share with the company the results of the work, or to disclose any
inventions which results from the work to the company.  If patentable inventions
are to result, encourage the faculty member to disclose them to you immediately
or to your Office of Technology Development.  Another way to deal with this
issue  is to acknowledge receipt of the award and indicate that it will be
undertaken in accordance with university policies and procedures.
Marjorie Forster

Marjorie Forster
Director, OSPA
University of Maryland at Baltimore