»Conflicts of Interest in Research

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For Researchers: Best Practices for Start-ups

This guidance was developed using policies from research institutions with long histories of successful technology transfer programs supporting researcher-led companies. 

Background

A researcher-associated new business venture (hereafter referred to as a “start-up”) is defined as a company where the original intellectual property originates with the researcher, where the researcher is a founder and has a significant equity position in the company, or where the researcher has an influential role in determining the direction of the company. Start-ups are both opportunities and challenges for Chapman University.

Chapman is an institution of public trust, with education and research as its mission and a requirement to maintain openness in research. Therefore, an entrepreneurial activity must be balanced by carefully reviewing the proposed relationships, which may or may not be allowed. These relationships may require active management to assure openness in research, academic freedom for trainees, and a clear understanding of how conflicts of interest are managed.

Chapman is committed to avoiding either perceived or actual conflict of interest issues concerning start-ups. Both Chapman and its researchers have responsibilities to optimize technology transfer and mitigate conflicts of interest when licensing Chapman IP to a start-up is considered.

University Responsibilities

The University makes licensing decisions based on its professional judgment about technology transfer to achieve the best possible benefit to the public without undue influence from internal or external parties.

The University undertakes several steps and considerations in transferring technology while managing conflict of interest effectively. First, the University markets all Chapman technology to ensure fair and open access to potential licensees – start-ups founded by or involving Chapman researchers should not receive or be perceived to receive preferential treatment. Second, Chapman researchers cannot represent the potential licensee and must not negotiate directly with the University. Third, Chapman licensing agreements may be exclusive or non-exclusive depending on what is most suitable for a given technology. Finally, the researcher’s Dean and the VP for Research must review any actions that present a potential conflict of interest, specifically:

• Under Chapman and federal policy, the researcher must disclose any interest (consulting fees or equity) in the start-up via a “Research disclosure” in the Cayuse Outside Interests system, which will be reviewed by the researcher’s Dean and the VP for Research.
• The researcher must agree to separate all University responsibilities from all company responsibilities according to the criteria listed under Researcher Responsibilities.
• Chapman may proceed with licensing only if the conflict is deemed manageable by the VP for Research.

Researcher Responsibilities

Researchers are urged to contact the Office of Industry Alliances and Commercialization early in the process when contemplating starting a new company to license Chapman IP.  The Office of Research will assist the researchers in developing a conflict management plan for the new company that complies with Chapman’s conflict of interest and conflict of commitment policies.

Researchers are responsible for separating all University duties (in research, teaching, and service) from personal financial interests in the company.

Researchers must:

• Separate and clearly distinguish ongoing University research from work being conducted at the company.
• Limit consulting for the company to a maximum of one day per workweek while on appointment at Chapman, per University policy (link).
• Serve only in advisory or consultative roles at the company
• Seek prior approval from the dean to accept a managerial role or title (e.g., CTO) that includes management responsibility. Such approval shall not be given automatically.  The terms of the approval will be documented in a management plan.  See 4.8 of the Institutional Conflict of Interest and Conflict of Commitment Policy for more information.
• If approval is not given to take on a leadership or management role concurrent with a full-time Chapman appointment, take a leave of absence to engage in a management role.

Researchers must not:

• Negotiate with the University on behalf of the company.
• Receive gifts or sponsored research from the company.
• Involve University research staff or other University staff in company activities.  Company personnel cannot be affiliated with the University.
• Involve company personnel in Chapman research.
• Involve current students in company activities. If a student asks to take a leave of absence to participate in the company, the student should be referred to the Dean and VP for Research to review the request and decide if it is allowable.
• Involve junior researchers that they supervise in company activities. Even if the researcher does not have a supervisory role, they should avoid situations in which junior researchers might feel expected to be involved in the company.
• Use University facilities for company purposes.
• Undertake human subject research related to the company at the University as PI or Co-PI.
• Supervise researchers who are PI/Co-PI for human subject research related to the company.

‘Pipelining’

The researcher often wishes to continue to do research at Chapman in the area of interest to their start-up. Chapman is particularly concerned about the use of University resources that benefit the company, especially new companies that do not have their own facilities or many employees (i.e., the “virtual” company). Chapman should not be the research or development arm of a start-up. If a new follow-on or improvement invention is developed after the original dominating technology has been licensed to the start-up, Chapman will still market that technology to all potentially interested parties. Exclusive licenses will not always be granted to the start-up, even if there is no other interest. In cases where the original technology dominates the subsequent developments, sometimes a nonexclusive license will suffice. If, in the interest of effective technology transfer, it is reasonable to grant an exclusive license to the follow-on technology, the exclusivity may be mitigated by a shorter term of exclusivity, limited field of use, increased diligence, etc. Any new license is subject to conflict of interest review and approval.

Wind-Down of Licensed Intellectual Property:

Researcher inventors are expected to wind down ongoing research in the particular area that the start-up will commercialize. The inventor is required to stop initiating new work on the technology at Chapman (that is, using University resources) when their technology is licensed to the inventor start-up.  Since it may take several months to wind down ongoing research, the inventor needs to plan accordingly and begin the wind-down of the Chapman activities in accordance with the conflict management plan before the licensing takes place.

New research grant submissions must be to initiate new work, not develop the licensed technology further.  Any current and pending sponsored projects will be assessed for overlap with the start-up company’s activities and documented as part of the conflict management plan. 

It’s important for inventors to understand that this guidance is intended to enable them to succeed in translating their technologies into use without jeopardizing the mission or funding status of Chapman University.

Policy References:

• Sponsored Activity Disclosure Policy for Investigators and Directors
• Institutional Conflict of Interest and Conflict of Commitment Policy
• SBIR STTR conflict management strategies (bottom of the page)

Chapman University supports the efforts of its faculty to foster productive relationships with the world outside of Chapman, including acting as consultants and in other external engagements, where faculty offer subject matter expertise in exchange for a fee, collectively known as “external engagements.” Faculty should be attentive to and avoid situations where third parties wish to pay a fee to garner favor with the individual or with Chapman.

In undertaking external engagements, faculty must be attentive to their obligations to Chapman and take appropriate steps to ensure that such activities are separate and distinct from their Chapman activities, do not take precedence over their primary commitment to the University, and are of sufficient quality to be worthy of Chapman faculty. Several examples of how to keep external engagement separate and distinct are provided below to help ensure compliance with Chapman’s policies.

Reach out to Jen Donais in the Office of Research Integrity (donais@champan.edu) if your relationship with the outside entity changes, for example,

 - the outside entity wishes to fund a project at Chapman research

 - the outside entity wishes to employ students or post-docs under your supervision.

 - the outside entity seeks to license Chapman intellectual property or provide resources to your Chapman lab

Since no guidance can address every instance of external engagements, it is the faculty’s obligation to engage in only those outside professional activities that promote, support, and reflect Chapman’s commitment to pedagogy, research, and service. Full-time faculty must get guidance and prior approval from their dean before consulting with an outside entity.  Disclose using the “Research disclosure” in the Cayuse Outside Interests system.

• Employees named as “Investigators” on sponsored awards and Directors of research institutes and centers must disclose any new outside activity within 30 days of engaging in the activity or acquiring a new financial interest.
• Faculty may spend no more than one day per workweek on consulting during the period for which they are paid for service. This time allowance may be averaged over a semester but may not accumulate from semester to semester. 

Disclosure, Research Integrity, and Academic Freedom

• Faculty should clarify that opinions they express in work prepared during consulting or other external engagements are their own and are not Chapman University positions. Whenever a faculty member is listed as an author on a publication resulting from external engagements or engages in speaking activities related to consulting or other external engagements, this or a similar disclosure is recommended:

“Dr./Professor [NAME]’s contribution to this publication/speaking event was as a paid consultant/ representative of an external entity and is not related to his/her Chapman University duties or responsibilities.”

• When engaging in consulting or other external engagements, the use of Chapman's name is limited to identifying the individual by generic title (e.g., Associate Professor, Senior Lecturer) and place of work (Chapman University). The title may be used only during the term of the appointment at Chapman.

Contractual Agreements

• Individual faculty members are responsible for reviewing the business terms associated with their external engagements.
• If faculty intend to use information - including data, material, or other forms of intellectual property - gathered during external engagements for Chapman research or other creative works, the Chapman Office of Industry Alliances and Commercialization must review the terms or conditions for accepting such information for use in Chapman research or other creative works, even if the data are provided free of charge. The terms of any such agreement must not conflict with Chapman University policy.

Intellectual property concerns

• Intellectual property developed while at Chapman using University or sponsored funds is owned by Chapman. If such materials are needed as part of a consultancy, contact Chapman’s Office of Industry Alliances and Commercialization to arrange for a third party to license patented or copyrighted materials from Chapman.
• Researchers may not provide the outside organization with privileged access to pre-published information (i.e., share Chapman data, research results or other information). Only published information may be shared with the outside organization.
• Faculty must not sign consulting, employment, facility access, non-disclosure, or confidentiality agreements containing terms that conflict with the faculty’s obligation to confer rights to Chapman for certain inventions, specifically all those that result from activity conducted during an appointment with the University and all those produced using University resources.Similarly, intellectual property related to your Chapman work may not be promised to outside entities as part of an external engagement. 

Separation of external engagements and Chapman activities

• Faculty may not enter into external agreements that impose obligations or liability on Chapman.
• In any external engagement, faculty may not involve Chapman staff or students for whom they have direct supervisory or academic responsibilities, as it may create a conflict of interest between the faculty member’s academic or supervisory responsibilities towards their student or staff and their personal interest in the outside engagement.
• Chapman letterhead, name, or other identification must not be used to imply University support for a personal viewpoint or external engagement.
• Faculty may not use University resources to conduct or support their external engagements. The only exception is the use of Chapman facilities and services that are openly available to outside commercial entities, or the use of an assigned office, office computer, or software routinely provided to all faculty.
• Faculty may not seek to provide access to University resources to individuals from entities with which they have an external engagement by sponsoring visiting or affiliate appointments unless it supports Chapman’s mission as an academic research institution.

Policy References

• Sponsored Activity Disclosure Policy for Investigators and Directors
• Institutional Conflict of Interest and Conflict of Commitment Policy
• SBIR STTR conflict management strategies (bottom of the page) 

All conflicts in research, teaching or other Chapman responsibilities related to sponsored programs must be managed, reduced, or eliminated.

When Chapman determines that a conflict of interest exists, the research integrity officer will work with the individual with the conflict, the dean, and the VPR as needed to determine what conditions or restrictions, if any, should be imposed by the University to manage, reduce, or eliminate such conflict of interest. If a FCOI cannot be managed, it must be eliminated by either divesting equity interest, termination of the relationship that gives rise to the Significant Financial Interest, terminating the sponsored award or human subject research, or other similar measures.

The management plan conditions may include but are not limited to: (i) monitoring of research by independent reviewers; (ii) modification of the research plan; (iii) disqualification from participation in the portion of the externally sponsored activity or human participant project overlapping with Significant Financial Interests; (iv) divestiture of Significant Financial Interests; (v) severance of relationships that create conflicts; or (vi) public disclosure of Financial Conflicts of Interest. 

The final plan must be agreed to before external engagement activity commences. The management plan is subject to final approval by the Vice President for Research. All management plans require regular monitoring for as long as the conflict exists—sample management plan.

The following management strategies will apply to projects where a Chapman researcher (typically a faculty member) wishes to work with a company on an SBIR or STTR project funded by the federal government where the researcher has a Significant Financial Interest in the company.

These management strategies apply to Phase 1 studies only. Chapman faculty may not be involved in later phase SBIR or STTR studies at Chapman when the researcher holds a Significant Financial Interest in the company.

1. The company must have access to research facilities and personnel appropriate to carry out its portion of the work, separate from Chapman. 
2. The proposal must include a complete description of the Chapman researcher’s relationship with the company (equity, consulting, etc.) and how the conflict will be managed. 
3. A non-conflicted CEO or another company representative must act as the PI and intellectual leader of the proposal submitted to the sponsor. 

1. If the Chapman PI is on unpaid leave and can act as the company's PI, they may not simultaneously act as the Chapman PI. Note that Chapman personnel may only hold management or C-suite positions at companies with the approval of the provost.

1. The Chapman PI may not consult with the company on the SBIR/STTR project while they are performing work on the project for Chapman. 
2. The Chapman researcher may not participate in negotiating with Chapman regarding the sponsored research agreement or any licensing arrangements.   The terms of such SBIR/STTR subawards to Chapman will follow standard university terms and conditions (e.g., Chapman ownership of new intellectual property, and the ability to publish research results).
3. Undergraduate and graduate students may not participate in the study for the company where their advisor holds a Significant Financial Interest. Postdocs may participate in the study at Chapman with the dean's approval.
4. If the project involves human subject research, these terms may be amended to protect the participants' interests. 
5. The dean must agree to these project stipulations before the proposal is submitted to the federal sponsor.  If awarded, the dean must agree to review Chapman’s expenditures on the SBIR/STTR award at least every six months.
6. If the project is awarded to the company and Chapman, a COI management plan with the standard management terms regarding disclosure of the conflict to team members, publication disclosure, disposition of intellectual property from the research in the lab, open publication/freedom from publication restriction, identification of who staff/students can go to if there are concerns, and any other management requirements will be implemented.

References:

Institutional Conflict of Interest and Conflict of Commitment Policy

Sponsored Activity Disclosure Policy for Investigators and Directors