Participation in Companies Commercializing University Research

May 03, 2018

Scope: Who is Covered by this Policy?

Employees

Policy

General Information

This policy applies to all employees who create intellectual property owned by Miami University and desire to hold an ownership interest in a firm, corporation, or other association to which the Board of Trustees has assigned, licensed, transferred, or sold the University’s interests in discoveries or inventions made or created by that employee or in patents issued to that employee commercializing his or her research.

This policy serves as exceptions to the Ohio Ethics Law and related statutes (Chapter 102 and Sections 2921.42 and 2921.43 of the Ohio Revised Code), which might otherwise apply. Matters outside the scope of this policy will be subject to such laws to the extent applicable.

Definitions

  1. A technology commercialization company is a private commercial entity that is owned in whole or in part by a University employee and that has as its purpose the development and commercialization of University-owned technology created by that employee.
  2. The Technology Transfer Oversight Committee is the University body responsible for the approval and oversight of technology commercialization companies pursuant to a delegation of authority from the University Board of Trustees. The Technology Transfer Oversight Committee shall be composed of a representative of each of the following offices: Office of the Provost, Office of the Vice President for Finance and Business Services, Office for the Advancement of Research and Scholarship, and Office of the General Counsel.
  3. The Office of the General Counsel is the University body responsible for assisting faculty and other University employees in identifying, managing, and eliminating conflicts of interest, and, in particular, for facilitating the development of conflict-of-interest management plans for faculty and staff participating in technology commercialization companies.

Applicability

  1. This policy applies to all faculty who create intellectual property owned by the University and desire to hold an ownership interest in a technology commercialization company.
  2. This policy applies to staff members holding unclassified administrative appointments, all graduate award holders, and student employees who
    1. are specifically assigned to engage in research and development activities,
    2. create intellectual property owned by the University, and
    3. desire to hold an ownership interest in a technology commercialization company.

Responsibilities of Department Chairs and Staff Supervisors

  1. Department chairs are responsible for ensuring that faculty who participate in technology commercialization companies comply with this policy. Department chairs are also responsible for ensuring compliance with the University policies on Conflicts of Interest and Outside Employment and for reviewing and making a recommendation as to the propriety of private business activities reported by their faculty in disclosure forms required by those policies.
  2. Staff supervisors are responsible for ensuring that employees who participate in technology commercialization companies comply with this policy. They are also responsible for ensuring compliance with the University policies on Conflicts of Interest and Outside Employment and for reviewing and making a recommendation as to the propriety of private business activities reported by staff in disclosure forms required by those policies.

Approval Process

  1. Faculty and staff members who wish to participate in a technology commercialization company must first obtain approval from their department chairs and deans or other appropriate supervisors. The Technology Transfer Oversight Committee will be responsible for establishing the business terms of the transaction between the company and the University, and the Office of General Counsel will facilitate the development of a conflict-of-interest management plan.
  2. The Technology Transfer Oversight Committee will review the sufficiency of business terms and conflict-of-interest management plans relating to technology commercialization companies. Written approval from the Technology Transfer Oversight Committee must be obtained before any business agreements relating to a technology commercialization company are finalized.
  3. Faculty or staff members who wish to participate in a technology commercialization company may discuss initial company formation with the Associate Provost for Research; however, they should not, as a general rule, participate in the ongoing negotiation of option and licensing terms between the company and University. As soon as possible, third parties, such as company management and/or legal counsel, should perform this function.
  4. As a prerequisite to the granting of an exclusive license to University technology, a technology commercialization company must provide the Technology Transfer Oversight Committee with a viable business plan including, at a minimum, the following:
    1. a capitalization plan demonstrating access to funds necessary for company growth,
    2. a proposed management team, and
    3. milestones for product development and commercial sale.
  5. In recognition of the University’s ownership of the technology, a technology commercialization company shall grant the University an equity interest in the company as negotiated by the Technology Transfer Oversight Committee.
  6. The faculty member’s department chair or the staff member’s supervisor must be an active participant in discussions with the Technology Transfer Oversight Committee and in the development of the conflict-of-interest management plan relating to a technology commercialization company.
  7. A department chair or staff supervisor who has a financial interest or is a co-participant with a faculty or staff member in a technology commercialization company is not in a position to provide effective oversight of that activity. In these situations, another disinterested administrator must be appointed to perform the responsibilities of the department chair or staff supervisor.
  8. If the Technology Transfer Oversight Committee determines that, for any reason, it is not possible for the department chair, the staff supervisor, or another disinterested administrator to provide effective oversight of a transaction involving a technology commercialization company, the transaction should not be approved.

Responsibility for University Duties

  1. Faculty with research responsibilities are encouraged to develop discoveries and inventions with commercial potential; however, they should do so with due regard to the broader teaching and research mission of the University. Faculty should not allow their interest in a financial opportunity arising out of their research efforts to influence their teaching or advising of students, or to interfere with their relationships with other faculty. In particular, research assignments for students should be based on the students’ interests and academic development. Faculty should respect and promote the cooperative nature of the academic environment by sharing information and participating in joint research efforts with their colleagues.
  2. While faculty are permitted by the University policy on Outside Employment and this policy to engage in specified private business activities relating to their University positions, they continue to be responsible for the performance of all of their assigned University teaching, research, and service obligations. Authorized private business activities must be undertaken in accordance with the University policy on Outside Employment and pursuant to formal consulting and conflict-of-interest management agreements between the faculty, the technology commercialization company, and the University and approved by the department chair, the Office of the General Counsel, and the Technology Transfer Oversight Committee.
  3. Staff members may engage in activities relating to a technology commercialization company during regularly assigned working hours only if they take approved leave. When performed outside regularly assigned working hours, these activities must be undertaken in accordance with the University policies on Conflicts of Interest and Outside Employment and pursuant to a formal conflict-of-interest management agreement between the staff member, technology commercialization company, and the University and approved by the department chair and/or supervisor, the Office of the General Counsel, and the Technology Transfer Oversight Committee.
  4. Staff members and instructional staff without research responsibilities may pursue research projects as authorized by their supervisors. Supervisors should authorize only those research projects that will advance the missions of the University and the employing unit, without regard to the financial interests of individual employee.

Conflict-of-Interest Management Standards

  1. University facilities, equipment, and other resources may be used for research benefiting a technology commercialization company only pursuant to a sponsored-research agreement, facilities-use agreement, or other appropriate contractual arrangement.
  2. As a general rule, faculty or staff should not hold management positions in technology commercialization companies. While they may initially find it necessary to play a management role in a newly formed company, it is expected that their management responsibilities will decrease as the company develops. Professional management should be brought in at the earliest opportunity. In order to ensure the application of this principle, agreements between the University and a technology commercialization company should contain enforceable milestones for the reduction of these management responsibilities. Failure to comply with these agreed-upon milestones will result in the company’s inability to engage in sponsored research and to utilize student employees and the other commercialization agreements and/or activities permitted under this policy.
  3. Faculty should not allow their management activities with technology commercialization companies to consume a disproportionate amount of their professional attention. Faculty, engaged in approved private business activities, who are unable to perform all of their University responsibilities, must reduce those activities or request a reduction of appointment or other approved leave. Professional improvement leave authorized under Section 3345.28 of the Ohio Revised Code may not be used for private business purposes.
  4. Staff members who are unable to perform all of their University duties because of activities in connection with technology commercialization companies must reduce those activities or request a reduction of appointment or other approved leave.
  5. Graduate and undergraduate students may use University facilities, equipment, and other resources to perform research benefiting a technology commercialization company only pursuant to a sponsored-research agreement.  Such research may not be used to satisfy the criteria for a thesis or dissertation if the research material is restricted from publication. Students should be informed, in writing, of this restriction prior to the start of their research.
  6. Students may be employed by a technology commercialization company, subject to the limitation set forth in in this policy section “Conflicts of Interest Management Standards,” number 7.  Prior to such employment, the student, the faculty or staff member, the chair of the student’s department, and a company representative must sign an agreement disclosing the student’s rights and obligations. If the student is a graduate student, the agreement must also be signed by the director of graduate studies in the student’s department.
  7. A student may not be employed by a technology commercialization company in which a faculty member has an ownership interest if:
    1. The student is enrolled in a course taught by the faculty member;
    2. The faculty member is a member of the student’s thesis or dissertation committee;
    3. The faculty member is the student’s adviser or the director of his or her thesis or dissertation research.

Such students may perform research benefiting a technology commercialization company only pursuant to a sponsored-research agreement or other formal internship agreement through the University.

  1. Technology commercialization companies may not enter into any agreements with the University for the purchase, sale, or rental of equipment, supplies, or services other than those explicitly authorized by the Technology Transfer Oversight Committee.
  2. As a general rule, faculty and staff members who are not directly involved with research and development of technology licensed to a technology commercialization company may not hold equity interests in that company. Equity ownership in these situations is permissible only to the extent allowed by Section 2921.42 of the Ohio Revised Code.
  3. University regulatory review boards including, for example, the Institutional Review Board for Human Subjects Research and the Institutional Laboratory Animal Care and Use Committee, may be utilized for research benefiting a technology commercialization company only pursuant to a sponsored-research agreement.
  4. As a general rule, an individual faculty or staff member should not hold more than twenty-five percent of the outstanding equity in a technology commercialization company. While significant faculty or staff equity ownership may be inherent in a newly formed company, it is expected that their ownership interests, as a percentage of the total outstanding shares or membership interests of the company, will decrease as the company develops and attracts additional equity. In order to ensure the observance of this principle, agreements between the University and technology commercialization companies should contain enforceable milestones for the dilution of these equity interests. Failure to comply with these agreed-upon milestones will result in the company’s inability to engage in sponsored research and to utilize student employees and the other commercialization agreements and/or activities permitted under this policy.
  5. Faculty or staff members may not assume the role of principal investigator in sponsored-research projects funded by technology commercialization companies in which they have an interest if the projects involve the use of human subjects. In other cases, faculty or staff may assume the role of principal investigator if a formal research-integrity plan has been approved by the Office of the General Counsel and the Associate Provost for Research.
  6. Agreements for sponsored-research projects funded by technology commercialization companies must include, at a minimum, a requirement for full University publication rights and fully negotiated cost recoveries. The Associate Provost for Research must approve exceptions to these conditions.
  7. Faculty and staff participating in technology commercialization companies approved pursuant to this policy continue to be bound by the University policy on intellectual property. New inventions and/or discoveries made as a result of a faculty or staff member’s research efforts for the company, including those made under formal consulting agreements, will be owned by the University and the company will be offered an exclusive option to the technology. New inventions and/or discoveries developed by the faculty or staff member for the company must be disclosed to the Office for the Advancement of Research and Scholarship.

Related Form(s)

Not Applicable.

Additional Resources and Procedures

Not Applicable.

FAQ

Not Applicable.

Policy Administration

Next Review Date

7/1/2023

Responsible Officer  

  • Vice President for Research and Innovation
  • Office of the Provost
  • General Counsel

Legal Reference

  • This policy serves as exceptions to the Ohio Ethics Law and related statutes (Chapter 102 and Sections 2921.42 and 2921.43 of the Ohio Revised Code)
  • ORC 3345.36
  • Higher Education Opportunity Act

Compliance Policy

Yes

Revision History

 

Reference ID(s)

  • MUPIM 3.10
  • OAC 3339-3-10

Reviewers

  • Vice President for Research and Innovation
  • Office of the Provost