(B)
Eligibility. This policy applies only to faculty
who:
(1)
create
intellectual property owned by the university; and
(2)
desire to hold an
interest, whether vested or not, in a firm, corporation, or other association
(hereinafter "company") 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 faculty or in patents issued to that faculty
commercializing their 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 Revised Code),
which might otherwise apply. Matters outside the scope of these rules will be
subject to such laws to the extent applicable.
(C)
Procedures and
guidelines.
(1)
Faculty responsibilities. While faculty are permitted by
these rules to engage in specified private business activities relating to
their institutional positions, they continue to be responsible for the
performance of all their teaching, research and service obligations. Authorized
private business activities must not be allowed to interfere with the
performance of any of their institutional responsibilities and must be
undertaken in accordance with university rule
3342-6-23
of the Administrative Code and pursuant to formal consulting and conflict of
interest management plans between the faculty, company and Kent state
university, which plan must be approved by the vice president for research and
sponsored programs.
(2)
Reporting business activities. Prior to requesting
participation in the commercialization of university technology, private
business activities that may relate to a faculty member's scope of employment
shall be reported in writing to the vice president for research and sponsored
programs.
(3)
Determining applicability of guidelines. Decisions
concerning the relationship between a faculty member's private business
activities and his or her scope of employment shall be made by the vice
president for research and sponsored programs. The faculty member may appeal
the decision of the vice president for research and sponsored programs to the
provost. The decision of the provost will be final.
(4)
Activities not
related to research. Private business activities that are not subject to these
rules because they are unrelated to the faculty member's scope of employment
may be subject to other institutional policies on outside enterprises (rule
3342-6-24
of the Administrative Code), conflicts of interest and commitment (rules
3342-3-01.6 and 3342-6-23 of the Administrative Code), and patents and
copyrights (rule 3342-5-09.1 of the Administrative Code).
(5)
Approval process.
A faculty member who wishes to participate in the commercialization of
technology must first obtain approval from his or her department chair or
school director and academic dean as appropriate. The faculty member, in
consultation with his/her academic dean, chair or director, shall develop and
present to the vice president for research and sponsored programs, a plan to
manage, reduce or eliminate conflict of interest or commitment arising out of
the faculty member's business activity. The vice president for research and
sponsored programs shall refer the proposed plan to the university patent and
copyright board, which will advise the vice president for research and
sponsored programs as to the acceptability of the plan. Faculty may not enter
into any agreements relating to their proposed business activities until the
plan has received final written approval from the vice president of research
and sponsored programs.
(6)
Responsibilities of academic deans, chairs and/or
directors. Academic deans, department chairs and directors have the
responsibility of ensuring that faculty participating in approved business
activities continue to perform all of their teaching, research and service
obligations. Academic deans, department chairs and directors are also
responsible for enforcing the university rules 3342-3-07.1 and 3342-6-23 of the
Administrative Code and for reviewing and making a recommendation as to the
propriety of business activities reported by their faculty in written
disclosures required by those policies.
(7)
Annual review.
Prior to the start of each academic year, the vice president for research and
sponsored programs, in consultation with the academic dean, department chair or
director will conduct an assessment of the employee performance under conflict
of interest management plan.
(a)
The academic dean, department chair or director will
provide a written assessment of the employee's performance of their teaching,
research and service obligations as outlined in the conflict of interest
management plan.
(b)
A review of the company's performance focused on the
achievement of milestones set forth in the plan including but not limited to
the reduction of management responsibilities for the employee, the dilution of
employee equity interests, patents filed, etc., will be a part of the annual
assessment.
(c)
The vice president for research and sponsored programs
shall consult with the patent and copyright board at its next regularly
scheduled meeting for advice and counsel in the assessment of the performance
of the faculty member to meet his/her obligations under the conflict of
interest management plan.
(d)
Failure to meet the goals outlined in the conflict of
interest management plan will result in defined actions prescribed by the vice
president for research and sponsored programs in consultation with the academic
dean, department chair or director that may include but are not limited to
revisions in the management plan, changes in the sponsored research or
licensing agreements, or other remedies to ensure that faculty meet commitments
to Kent state university.
(8)
Agreements with
start-up companies. A "start up" company is defined as a legal entity in the
early stages of commercializing intellectual property or technology licensed by
the university.
(a)
Companies may not enter into any agreements with the
university relating to the commercialization of a faculty member's research
until final written approval from the vice president for research and sponsored
programs is obtained.
(b)
Faculty who wish to participate in a start-up company
may discuss initial company formation matters with the vice president for
research and sponsored programs; however, they should not participate in the
ongoing negotiation of option and licensing terms between the company and vice
president for research and sponsored programs.
(c)
As soon as
possible, third parties, such as company management and/or legal counsel should
perform this function. A company wishing to obtain an exclusive license to the
university technology may be required to provide the vice president for
research and sponsored programs with a viable business plan including, at a
minimum, the following:
(i)
A capitalization plan addressing the acquisition of
additional capital and the equity dilution of the faculty member's ownership
interests;
(ii)
A proposed management team; and
(iii)
Milestones for
capitalization, product development, and commercial sale.
(9)
Use of university facilities. Institutional facilities,
equipment and other resources may be used for research benefiting a company in
which a faculty member has an interest only pursuant to a sponsored research
agreement, facilities use agreement or other appropriate contractual
arrangement in accordance with institutional policies.
(10)
Management of
start-up companies. Faculty for a limited period of time may hold management
positions in start-up companies commercializing their research. 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. Agreements between the university and faculty owned
start-up companies will specify milestones for the reduction of these
management responsibilities.
(11)
Management
positions in existing companies. A faculty member who acquires interest in a
previously established company that contracts with the university to
commercialize his or her research should not serve as a director, officer or
employee of that company.
(12)
Leave to pursue
private business activities. Faculty should not allow their management
activities with newly formed companies commercializing their research to
consume a disproportionate amount of their professional attention. Faculty
engaged in approved private business activities who are unable to perform all
of their institutional responsibilities are encouraged to consider a full or
partial leave of absence without pay. Professional improvement leave available
under section 3345.28 of the Revised Code
shall not be used for private business purposes.
(13)
Student research
within the university. Graduate and undergraduate students may use
institutional facilities, equipment and other resources to perform research
benefiting a company in which a faculty member has an interest only pursuant to
a sponsored research agreement.
(14)
Student
employment with the company. Except as provided in paragraph (C)(15) of this
rule, students may be employed by companies in which faculty members hold an
interest. Prior to such employment, the student, the faculty member, the chair
of the student's department, the chair of the graduate studies committee and a
company representative must sign an agreement that clearly sets forth the
roles, rights, and responsibilities of the respective
relationships.
(15)
Employment of students academically involved with
faculty owners of the company. A student may not be employed by a company in
which a faculty member has an interest if:
(a)
The student is
enrolled in a course taught by the faculty member;
(b)
The faculty
member is a member of the student's thesis or dissertation committee;
or
(c)
The faculty member is the student's advisor or the
director of his or her thesis or dissertation research. Such students may
perform research benefiting a faculty owned company only pursuant to a
sponsored research agreement or formal internship agreement through the
university.
(16)
Contracts unrelated to technology development.
Companies in which faculty hold an interest may enter into agreements with the
university unrelated to research or technology development for the purchase,
sale or rental of equipment, supplies, or services only to the extent not
prohibited by Chapter 102. and sections
2921.42 and
2921.43 of the Revised
Code.
(17)
Investments by faculty not involved with development of
the technology. Faculty who are not directly involved with research and
development of technology licensed to a faculty owned start-up company may hold
equity interests in that company only to the extent not prohibited by Chapter
102. and sections 2921.42 and
2921.43 of the Revised
Code.
(18)
Regulatory review boards. Institutional regulatory
review boards, including for example, institutional review board and animal
care and use committee, may be utilized for research benefiting a company in
which a faculty or staff member has an interest only pursuant to institutional
policies.
(19)
Limitation of equity ownership. While significant
faculty equity ownership may be inherent in a newly formed company, it is
expected that faculty 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.
(a)
Agreements
between the university and faculty owned start-up companies shall specify
milestones for the dilution of these equity interests. In most cases, the
faculty's ownership interest should decrease to no more than twenty-five per
cent of the total equity in the company.
(b)
Failure to comply
with or renegotiate these agreed-upon milestones may result in a renegotiation
or in the company's inability to engage in sponsored research, employ students
and the other commercialization agreements and/or activities allowed for under
this policy.
(20)
Principal investigators. Faculty may assume the role of
principal investigator in sponsored research projects funded by companies in
which they have an interest only pursuant to rules
3342-3-07
and 3342-3-07.1 of the Administrative Code.
(21)
Intellectual
property. Faculty participating in start-up companies approved pursuant to
these guidelines continue to be bound by all institutional policies on patents
and copyrights. New inventions and/or discoveries made as a result of a faculty
member's research efforts for the company must be disclosed in writing to the
vice president for research and sponsored programs. New inventions and/or
discoveries developed by the faculty for the company will be owned by the
university, unless the patent and copyright board determines that the invention
or discovery is wholly unrelated to the research and teaching responsibilities
of the faculty member.
Replaces: 3342-3-08