We revised our intellectual property policy last year to eliminate a
prohibition on faculty doing further research in the university on
technologies that had been licensed to their companies or reassigned to them.
Often these continuation projects are funded with SBIR or STTR money. (Note
that the PHS and NIH conflict rules exclude an ownership interest in an
SBIR/applicant institution from the definition of "significant financial
interest". The NIH STTR program guidelines allow the PI for the applicant
company to be a university employee and require that there be a significant
connection between the university PI and the applicant company.)
 Conflict of interest policies for the university, the state, and additional
policies promulgated by individual schools and colleges require disclosure of
these situations. We view each one independently but have developed some
models that seem to work to make the situations you mentioned manageable. We
monitor these situations closely and require reports to the conflict of
interest committee on a semiannual basis. We avoid sweetheart deals, i.e., we
will give a faculty owned company terms no better than we would give other
sponsors under similar conditions. We allow faculty owned companies to use
university facilities on the same basis that we allow other companies to do so
(i.e., unique facilities which have established and uniformly applied recharge
rates) We avoid situations in which the work the faculty member does inside
the university cannot be distinguished from their work for the company. We try
not to have a single faculty member wearing multiple hats while dealing with
students or other employees for whom they are responsible i.e., a faculty
member cannot hire a student on a subcontract from their company and also be
their thesis chair.
 Times have changed. While I don't think paying attention to this stuff is
being overly fussy. I do think these situations can be dealt with and promote
the university's missions of education, research and service.
Elaine L. Brock
University of Michigan
P (313) 764-7250
F (313) 764-8510
xxxxxx@umich.edu

From: Research Administration Discussion Group on Wed, Jul 23, 1997 5:58 PM
>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
>
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>Subject:      SBIR and STTR AND Faculty Owned/Controlled Companies
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