HEADING GOES HERE IN RED
UNIVERS CONDENSED BOLD ALL
CAPS
AVOIDING CONFLICT IN FACULTY
CONSULTING
Judith L. Curry
Associate General Counsel
NC State University
December 2, 2011
Board of Governors Policy
• Board of Governors Conflict of
Interest/Commitment Policy:
– “Participation of EPA employees in….consulting, is
an important characteristic of academic employment
that often leads to significant societal benefits,
including economic development through technology
transfer.”
Board of Governors Policy
“However, such external professional activities
for pay are to be undertaken only if they do
not
– Create a conflict of commitment
– Create a conflict of interest
– Involve inappropriate use or exploitation of
University resources…”
NCSU Regulations and Policies
• NC State Conflicts of Interest and Commitment
Regulation [REG01.25.01]
• Patent and Tangible Research Policy
[POL10.00.01]
Consulting Must be Reported and
Approved In Advance
• Must be reported at least 10 days in advance
[NOI]
• Department Head Approval
• May require update of COI report
Conflicts of Interest
• An employee has a conflict of interest when:
– Significant Financial Interest
– Affects or appears to affect
– Objectivity in conduct of University duties
Example:
• Consulting for a company with regard to the
same subject matter for which he/she acts as
principal investigator under a research
agreement sponsored by company
• Also may violate N.C.G.S. 14-234(a)(1) which
prohibits public employees from deriving a
direct benefit from public contracts
Testing and Services Agreement
• Project Coordinator certifies:
– No research component
– NOT WORKING AS CONSULTANT
– WILL NOT IN FUTURE CONSULT FOR PURPOSE
OF ANALYZING DATA
Use of University Space and Equipment
• Generally not permitted in connection with
consulting
• Inappropriate use or exploitation of University
resources means using any services, facilities,
equipment, supplies or personnel which
members of the general public may not freely
use.
• BOG Policy 300.2.2 Conflict of Interest and
Commitment
Conflicts of Commitment
• Consulting which involves time commitment
that interferes with employee’s accomplishing
university duties
Consulting and the Patent Policy
• Article 6, Patent and Tangible Research Policy
• Assignment to University
– University administered funds
– Scope of Employment
– Substantial Use of University resources
Scope of Employment
• North Carolina Law:
Employer may require assignment unless
the invention does not relate to the employer’s
business or actual or demonstrably anticipated
research or development N.C.G.S. 66-57.1
Inventions Made with Substantial Use of
University Resources
• Resources that would not be available to
unaffiliated person
• Exceptions
– Minimal office use
– Library
– Personal Computer
Key Terms in Industry Consulting
Agreements
•
•
•
•
•
•
Confidential Information/Data Protection
Intellectual Property Ownership
Liability
Indemnity
Choice of Law/Forum
Non-Compete
Stanford v Roche
• Board of Trustees of the Leland Stanford Junior
University v Roche Molecular Systems, Inc.,
131 S.Ct. 2188, 180 L.Ed.2d 1 (June 6, 2011)
How Can I Avoid Conflict Between My
Consulting and University Policies?
• Report NOI/COI
• Provide copy of University Patent Policy to
company
• Include language establishing priority of
University obligation
(http://www.ncsu.edu/general_counsel/legal_topics/consultingfaqs.php)
• Define narrowly and precisely the subject
matter of consultancy
What Are The Legal Risks To Me
Personally In Engaging In Consulting?
• Damages for Breach of Contract
• Indemnification requirement
• Liability for misappropriation of state property
(intellectual property)
• Liability for non-disclosure of conflicts
– False Claims Act (31 U.S.C. 3729 et seq.)
How Can I Minimize The Risk Of Liability
For My Consulting?
• Consult personal legal counsel and obtain
review of contract
• Obtain errors and omissions insurance
• Seek guidance from Office of General Counsel
if questions about University policies
• Seek guidance from SPARCS/OTT
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Avoiding Conflict in Faculty Consulting