Bill- You are uncovering a can of worms -- though most of them will grow up to become snakes!! Virginia's and this institution's experience may interest you. In VA we have a state COI law which prohibits an employee from having a "personal interest" -- over $10K/yr income from or over 3% ownership in, by employee, spouse, or members of household -- in a contract with employee's own agency. HOWEVER, we have an exception process for employees of higher ed which provides for 1) disclosure, and 2) approval by Univ. official, for each otherwise prohibited contract. The exception process was provided for in the law because the legislature was persuaded that without it, university inventors could not have any involvement in the development to commercialization of their inventions. Good idea, yes? Given the fundamental nature of most university inventions, the inventor may be far and away the best to lead the next steps of development, either inside or outside the institution, if non-institutional $ can be found. Here, this exception process has been used in a number of cases for exactly this reason. In fact, there have been two pushes related to this: 1) the state's Center for Innovative Technology has moved in the direction of economic development, so has taken steps to encourage state inventions be commercialized by in-state companies or facilities, which predisposes the involvement of inventors in commercializing companies, and 2) with the creation of a research park under the leadership of our president, there has been a concerted effort to create entrepreneurial companies around, amongst other things, our inventions, with occupancy of the research park and utilization of the start-up-company-support options it has as a carrot (and that provides renters for the space!). SBIR and STTR grants are often sought by these companies; in fact, CIT gives matching grants as inducements if the company is a VA entity. The exception has been used to facilitate a number of other entrepreneurial arrangements, too. There is the interesting point that the institution's Intellectual Properties Foundation (in the past, the University itself, but most of those agreements have been assigned to IPFndn) often takes an equity position in the company. The understood -- but seldom contracted for so it can easily be enforced -- premise is that the faculty members involved do not end up with conflict of commitment. The company is allowed -- in fact usually encouraged -- to have research agreements with the university. There are no written policies on the allowable nature of these relationships. Some other questions/problems which have occurred, but not been resolved by written policy (though some have been settled on a case-by-case basis, but not creating a precedent!), include: If the faculty mamber makes an invention, in what cases is it university property and in what cases is it company property? Under what conditions shall company personnel work in University spaces or with University special equipment (this opportunity is an incudement to companies to come to the research park, immediately next door); what insurance/indemnication provisions should apply, what about invention ownership, even what about graduate students and post-docs being involved? What about implied endorsement by the institution when activities are conducted in what is, or appears to be, University space? Even worse, what sanctions should/will be applkied when a company is using the University name explicitly, even in apparent defiance of contract language to the contrary? Should the University try to police the state COI law in regard to all faculty? Should chairs and deans, who set salaries, be given access to a faculty member's personal financial information describing outside sources of income? Bill, as usual, you see to the heart of a problem situation. Maybe some others on the net will have answers to share!! Chuck At 08:43 AM 7/23/97 -0400, you wrote: >Colleagues - > >I am begining to wonder if I am the only person that worries about faculty >owned/controlled companies and their participation in SBIR and STTR programs, >which include the employing university as the academic partner. > >As I recall the early days of the SBIR program, federal agencies were at the >very least cautious about the relationships and conflicts that could be >created and most institutions frowned on and/or prohibited the practice. As >our world has evolved, federal sponsors have been encouraging of the notion of >faculty establishing companies and competing for SBIR/STTR funds. > >My query to the group is, what are your institutional policies/positions on >this general issue and what has been your experience in instances where >faculty establish companies and seek SBIR/STTR funding? > >If this is a non-issue and I am just being too fussy, my apologies. Your >comments directly to me or through the list will be appreciated and if there is >response worthy of a summary report, I'll post same. > >Bill Reeves > >William W. Reeves, Director Phone 304/293-7398 >Office of Sponsored Programs Fax 304/293-7435 >West Virginia University E-mail xxxxxx@WVU.EDU > Herbert B. Chermside, CRA Director, Office of Sponsored Programs Admin. Virginia Commonwealth University PO BOX 980568 Richmond, VA 23298-0568 Voice: (804) 828-6772 Fax: (804) 828-2521 individual e-mail: xxxxxx@vcu.edu OFFICE e-mail: xxxxxx@vcu.edu OFFICE website: http://views.vcu.edu/views/ospa/
