Management of
Conflicts of Interest
Mission Critical in Entrepreneurial Universities
Dr. Bill Hunt, Professor
Bioengineering, and
Microelectronics/Microsystems in the
School of Electrical and Computer
Engineering
Compare and Contrast
Conflicts of Interest and Commitment
“Conflict of Interest”
• Whenever it reasonably
appears that a significant
financial or other interest
could affect the design,
conduct, or reporting of
activities funded or proposed
for funding by a sponsor a
conflict of interest exists.
• The personal interest of an
employee or his or her family
may prevent or appear to
prevent the employee from
making an unbiased decision
with respect to the employee’s
employment with the
institution.
“Conflict of Commitment”
• Whenever an individual's
outside activities interfere
with professional
obligations to the Institute a
conflict of commitment may
exist.
• The primary guide should
be the intention to promote
the interests of the Institute
as a place of education,
learning and research.
Legal and Policy Framework
GIT COI Policy
Activities which constitute a Conflict of Interest where there is Significant Financial Interest are
prohibited unless a plan to reduce, eliminate or manage the Conflict of Interest has been expressly
approved pursuant to the provisions of this policy.
Activities which constitute Conflicts of Interest where
an employee has a Substantial Interest are unlawful.
Full-time employees of the Board of Regents of the University System of Georgia may serve as members
of governing boards of private, nonprofit, educational, athletic, or research related foundations and
associations which are organized for the purpose of supporting institutions of higher education in
this state and which in furtherance of this purpose may Transact Business with such institutions or
with the Board of Regents of the University System of Georgia. However, full-time employees of the
Board of Regents of the University System of Georgia may not serve as a member of a governing
board of a for-profit company.
Employees shall submit a written disclose not less than annually and, they must re-disclose when it
changes, inform their Chair and the Office of Sponsored Programs Office when a submission poses
a conflict of interest in sponsored research and they must inform the Institutional Review Board.
•
Official Code of Georgia 45-10-23, 45-10-24
Legal and Policy Framework
Georgia Tech Research Corporation & CoI Policy
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GTRC is the owner of IP created at the Institute
GTRC is a 501(c)3, Type 3, Functionally Integrated
Supporting Organization of GIT
GTRC is responsible for Bayh-Dole and contract
compliance
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GTRC licenses technology at “fair market value” and is
mindful of:
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Obligations to all inventors
Obligations to get technology into the marketplace
Excess benefit transactions
Patent cost recovery
GTRC is also mindful of common conflicts
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Pre-existing rights
Reporting requirements
Enforceable milestones and diligence provisions
are a must
U.S. manufacture
Option Briar Patch
Other research agreements
GTRC has its own CoI policy
Institutional Conflicts of Interest
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GTRC does not vote in company shareholder actions
GTRC does not join LLCs
Situations That Give Rise to
Conflicts of Interest and Commitment
• Professional or scholarly
interest in the outcomes of
research
• Authorship of scholarly works
or teaching materials
• Family employment or
business relationships
• Consulting agreements
• Intellectual property licensing
• Outside financial interests
• Outside professional activities
Sometimes it seems as though the role of
Technology Transfer is to create
Conflicts of Interest
• Faculty Start-Ups
– License Technology from the Institution
– Sponsor Research at the Institution
– Involve students of the Institution
– Conduct human studies
• Institutional Conflict of Interest
– If the institution owns equity, its decisions may not be
viewed as unbiased
– If an institution accepts funding from a company its
research and decisions may not be viewed as unbiased
University Concerns
The university3 must protect itself and its faculty,
staff and students from any of the following
allegations:
• exploitation of students for private gain
• undue personal gain from public funds
• compromise of university priorities due to financial
considerations
• unfair access by a company to information or
technology
3. From the Stanford University Conflict of Interest Policy http://www.stanford.edu/dept/DoR/Resources/coi.html
University Concerns
The university3 must protect itself and its faculty, staff and
students from any of the following allegations:
• compromise of appropriate controls in the conduct of
research such that research subjects could be harmed
• use of university resources for private gain
• adverse effect by those in leadership roles on the professional
or academic advancement of colleagues, staff or students as a
result of outside interests.
3. From the Stanford University Conflict of Interest Policy http://www.stanford.edu/dept/DoR/Resources/coi.html
CoI Management Plans
• Limitations on who may serve as a PI on a sponsored project
• Distinction between activities appropriate for consulting and
for sponsored programs
• Limitations on ownership of stock or stock options
• Technology transfer or licensing provisions
• Designation of responsibility for control of donated funds
• Provisions for the use of university facilities
• Provision for the employment of university students
• Disclosure requirements
• Relationship to other funded projects &/or proposals
• Designation of parties responsible for review
Special Cases: GRA Funding and
Other External Funding for Translational Research
• Phase 0 through Phase II
GRA grants are Institute
funds and must be spent
for translational research!
• Coulter Funds are the
result of a donation to the
Georgia Tech Foundation
and are spent as Institute
funds for translational
research.
Special Cases: GRA Funding and
Other External Funding for Translational Research
• Faculty members and employees of Georgia Tech must maintain a
strict separation between activities performed for GT and those
performed for the company in which they have or may have
interests as a result of commercialization of the subject technology.
• These funds cannot be used to compensate any founders or
employees of the subject companies or others with a financial
interest in the company.
• Normal Purchasing rules apply.
• Normal IRB, IACUC, biosafety, radioisotope rules, et cetera apply.
• IP that results from these projects will be assigned to GTRC and
must be licensed under a separate license or license amendment.
• Research projects undertaken with a goal of readying the
technology for commercialization in a start-up company must be
carefully firewalled from other research projects conducted by the
individuals involved.
Special Cases: STTRs & SBIRs
• Management Plan must Address
– PI for the company
• May not be a full time GT employee
• May not be a full time GT student
– PI for the award to Georgia Tech
– Students; students advised or supervised by an individual with a
conflict of interest involving a company funding not be involved in
projects funded by that company at Georgia Tech
– Level of ownership by Georgia Tech faculty, inventors, family
• Relationship to ongoing and proposed research – whether
federally or privately funded – in Georgia Tech
– Design of research projects – avoidance of “pipelining”
– Conduct – allocation of resources; data integrity
– Reporting of research results – objectivity in research; insider
information
• Time and Effort Reporting – A Special Concern
Case Studies
1. A faculty member makes a patentable invention during federally-funded
research. The invention is exclusively licensed to General Whatever. The
company sponsors research in the faculty member’s lab. GW will pay
royalties; inventor receives 30% of net.
2. A faculty member makes a patentable invention during federally-funded
research. The faculty member forms a company to license this very earlystage technology and seeks venture capital. GTRC owns equity in the
start-up; faculty member has equity and will receive 30% net royalty.
3. The faculty member in #2 submits a proposal to the National Science
Foundation to work in the same research area.
4. The company in #2 receives angel investment and wants to sponsor
development work in the faculty member’s lab. The faculty member plans
to employ a graduate student and two undergraduates who will work on
their Senior Design projects under this agreement.
5. The faculty member in #1 accepts a contract from American Whatever.
The research will make use of the invention licensed to General Whatever.
The contract with American Whatever offers an option for a NERF.
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
No
(potential)
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
No
(potential)
No
(potential)
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
No
(potential)
No
(potential)
Yes
(disclosure
required)
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
No
(potential)
No
(potential)
Yes
(disclosure
required)
Yes
FM equity >25%
FM equity <25%
Case Studies
Case
1. Federally-funded invention; licensed to General
Whatever which sponsors research in the inventor’s lab.
2. Federally-funded invention; faculty member forms a
company to license this very early-stage technology.
3. The faculty member in #2 submits a proposal to the
National Science Foundation.
4. The company in #2 wants to sponsor development work
in the faculty member’s lab; graduate student and two
undergraduates who will work on the projects under this
agreement.
5. Technology licensed to General Whatever becomes
background IP in a contract with American Whatever which
offers an option for a NERF.
COI?
No
(potential)
No
(potential)
Yes
(disclosure
required)
Yes
FM equity >25%
FM equity <25%
Yes
Other Common Conflicts of Interest Situations
Consulting Agreements
between faculty and research
sponsors
Consulting arrangements
between faculty and companies
based on their technologies.
Interests senior officials, those
whose jobs involve technology
transfer or commercialization,
and supervisors may have in
start-up companies or licensees.
Gifts or donations made by
start-up companies or other
licensees to the Georgia Tech
Foundation.
Other Common Conflicts of Interest Situations
Particularly associated with start-up companies
based on Georgia Tech technology.
These individuals are
generally recused from
financial, managerial
or compensated roles
in GT start-ups.
Gifts should not be
controlled by anyone
with a financial or other
interest in the donor.
Interests senior officials, those
whose jobs involve technology
transfer or commercialization,
and supervisors may have in
start-up companies or licensees.
Gifts or donations made by
start-up companies or other
licensees to the Georgia Tech
Foundation.
Roadmap for Start-Ups!
• Avoid substantial conflicts of interest & conflicts of commitment.
• Firewall ongoing research from translational
research and company formation.
• Do not involve students advised or taught by
faculty involved in the company
(unless they are also inventors).
• Faculty with a yen to run a
company may wish to consider
a leave of absence.
• Outside entities cannot use Georgia Tech
facilities without compensation and there are
formal mechanisms for doing that.
• Tip: don’t use GT e-mail, address, or phone
number for the company unless it’s in ATDC.
• DISCLOSURE, DISCLOSURE, DISCLOSURE!