Ohio Administrative Code
Title 3349 - Northeast Ohio Medical University
Chapter 3349-20 - Policy on Funds, Transfers, Unallowable Costs and Financial Conflict of Interest
Section 3349-20-175 - Participation in companies commercializing university research
Universal Citation: OH Admin Code 3349-20-175
Current through all regulations passed and filed through September 16, 2024
(A) Purpose
Northeast Ohio medical university has determined that the interests of the university will be served if faculty, staff and students are afforded an opportunity to hold a personal, financial interest in companies commercializing their university research. Participation in technology licensing transactions will facilitate the university's strategic plan by making its intellectual property available for use in the private marketplace. Activities permitted under this rule will enhance the university's ability to recruit and retain high quality faculty researchers. These procedures and guidelines are intended to protect the integrity of the educational, research and service missions of the university, through compliance with university rules and procedures, as well as federal and state laws and regulations while enabling the university to realize the benefits of entrepreneurial activities.
(B) Scope
This rule applies to all staff engaged in research at the university (as that term is defined in paragraph (C)(18) of this rule).
(C) Definitions
(1)
"Activity not related to research" refers to activities
which are unrelated to scientific or scholarly investigation are not subject to
this rule. However, they may be subject to other university
rules.
(2)
"Business activity" refers to activities directed
toward the commercialization of university intellectual
property.
(3)
"Business plan" refers to a written proposal explaining
a new business or business idea that usually includes financial, marketing and
operational plans.
(4)
"Conflict management plan" refers to a plan designed to
manage, reduce or eliminate conflicts of interest in accordance with the
university's conflict of interest rule.
(5)
"Conflict of
commitment" refers to external commitments which burden or interfere with the
individual's primary obligations and commitments to the
university.
(6)
"Conflict of interest" refers to the ability to
improperly influence the university's business, administrative, academic,
research or other decisions in ways that could lead to personal gain or
advantage of any kind.
(7)
"Conflict of interest administrator" refers to the
university official, appointed by the president, responsible for monitoring
compliance with conflict of interest plans as approved by the conflict of
interest committee.
(8)
"Conflict of interest committee" refers to the
committee appointed by the president that reviews disclosure statements
regarding significant financial interest in a technology commercialization
venture. This committee assists the faculty, staff and students in the
development of a plan to manage, reduce or eliminate conflicts of interests in
accordance with the university's conflict of interest rule.
(9)
"Equity" refers
to an interest or ownership in a commercial entity.
(10)
"Faculty" refer
to individuals appointed to that status by the board of
trustees.
(11)
"Intellectual property" refers to a category of
intangible rights protecting a commercially valuable product of the human
intellect. This category includes, but is not limited to, trademark, copyright,
patent rights and trade secrets.
(12)
"Intellectual
property committee" refers to the committee appointed by the president that
evaluates all discoveries and inventions disclosed to the university for patent
potential and marketability.
(13)
"Investigator"
refers to individuals responsible for the design, conduct or reporting of a
project whether in whole or part. This includes all personnel involved in a
research project.
(14)
"Milestones" refer to specific markers measured in
terms of events, time or both.
(15)
"Individuals"
refer to as used in this rule, individuals include faculty, staff and
students.
(16)
"Research" refers to scientific or scholarly
investigation.
(17)
"Significant financial interest" refers to anything of
monetary value including, but not limited to, salary or other payments for
services, equity interests and intellectual property rights.
(18)
"Staff" refers
to any individual who is a part time or full time employee at the university
whether paid or not qualified volunteers are included in this
definition.
(19)
"Start-up company" refers to a corporation,
association, partnership or other commercial enterprise which is in its
formative or developmental stage.
(20)
"Students" refer
to individuals who is enrolled full-time or part-time in approved university
educational programs and/or individuals enrolled in other joint instructional
programs who are under the direction of college of medicine faculty. This
includes medical students, graduate students, graduate assistants, postdoctoral
fellows and student employees.
(21)
"Technology
commercialization venture" refers to a commercial entity owned in whole or in
part by a university faculty, staff member or student that has as its purpose
the development and commercialization of university owned, assigned, licensed,
or transferred intellectual property.
(D) Body of the rule
(1)
Applicability
(a)
This rule applies to individuals that are engaged in
research and development activities or create intellectual property owned by
the university in accordance with section
3345.14 of the Revised Code and
desire to hold and own equity interest in a technology commercialization
venture generated by the aforementioned commercialization
activities.
(b)
The conflict of interest administrator is responsible
for ensuring that individuals within the university who participate in
technology commercialization activities comply with this rule and the
university's external and financial professional commitments, conflict of
interest and intellectual property rules.
(c)
The conflict of
interest administrator, in consultation with the individual's immediate
supervisor, is responsible for reviewing the conflict management plan and
making recommendations to the conflict of interest committee.
(d)
The conflict of
interest committee is responsible for notifying the faculty member and his or
her immediate supervisor upon approval of a conflict management
plan.
(e)
The supervisor is responsible for monitoring compliance
with the conflict management plan and reporting deviation to the conflict of
interest administrator.
(f)
The conflict management plan will be reviewed annually
by the conflict of interest administrator and the president or other university
official designated by the president to assure compliance with the plan and all
other university rules.
(2)
Approval
process
(a)
Individuals who plan to participate in a technology
commercialization venture must present a business plan to the general counsel
and the chief technology transfer officer who will consult with the vice
president for finance and administration. Such individuals must also submit a
conflict management plan to the conflict of interest committee after
consultation with the conflict of interest administrator and the immediate
supervisor.
(b)
The intellectual property committee is responsible for
ensuring that the interests of the university are served by the technology
commercialization venture through a review of all pertinent information
relating to the venture.
(c)
A technology commercialization venture requesting a
license to university owned technology must provide a viable business plan to
the general counsel and chief technology transfer officer including, at a
minimum, the following:
(i)
A capitalization plan demonstrating access to funds
necessary for venture growth;
(ii)
A proposed
management team; and
(iii)
Milestones for product development and commercial
sale.
(d)
The conflict of interest committee will be responsible
for reviewing and approving the conflict management plan.
(e)
The conflict of
interest administrator or an immediate supervisor who has a financial interest
or is a co-participant in a technology commercialization venture is not able to
provide effective oversight of that activity. In these situations, an objective
administrator will be appointed by the president to perform responsibilities of
the conflict of interest administrator or the immediate
supervisor
(3)
Faculty obligations to the university
(a)
Faculty are
encouraged to develop discoveries and inventions with commercial potential;
however, they shall not allow their interests in a financial opportunity to
interfere with or detract from the teaching, research and service missions of
the university.
(b)
Faculty advisors shall base research assignments for a
given student on the student's interest and academic
development.
(c)
Faculty shall respect and promote the cooperative
nature of the academic environment by sharing information and participating in
joint research efforts with their colleagues.
(d)
Authorized
private business activities must be undertaken in good faith, with due care and
must be consistent with the university's best interests. These activities must
not conflict with university rules and procedures or any federal and state
law.
(4)
Conflict of interest management standards
(a)
University
facilities, equipment and other resources shall be used for research benefiting
a technology commercialization venture only pursuant to an appropriate
contractual agreement.
(b)
Faculty or staff shall not hold management positions in
technology commercialization ventures without the express consent of the
conflict of interest committee and the university president. It is expected
that professional management shall be brought in at the earliest opportunity
and that faculty or staff management responsibilities will decrease as the
venture develops.
(c)
Agreements between the university and a technology
commercialization venture shall contain enforceable milestones for the
reduction of faculty and staff management responsibilities. Failure to comply
with these milestones will result in cessation of the faculty and staff
management activities permitted under this rule unless specifically authorized
by the conflict of interest committee.
(d)
Faculty engaged
in approved private 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. Faculty improvement leaves
may not be used for private business purposes and are subject to the faculty
improvement program rule.
(e)
A perceived failure to adhere to these guidelines shall
be reported to the conflict of interest administrator.
(f)
University
regulatory review boards including, for example, the institutional review board
and the institutional animal care and use committee, may be utilized for
research benefiting a technology commercialization venture only pursuant to a
written agreement with the university.
(g)
While significant
faculty or staff equity ownership may be inherent in a newly formed venture, it
is expected that their ownership interests, as a percentage of the total
outstanding shares or membership interests of the venture will decrease as the
venture develops and attracts additional equity. Agreements between the
university and technology commercialization companies shall contain enforceable
milestones for the dilution of these equity interests.
(h)
A faculty or
staff member, who is a principle investigator for a project involving human
subjects or live animals which is funded by a technology commercialization
venture, must comply with the rules and regulations of the institutional review
board or the institutional animal care and use committee.
(i)
Agreements for
sponsored research projects funded by technology commercialization ventures
must include, at a minimum, a requirement for appropriate university
publication rights and full cost recovery. The office of the vice president for
administration and finance and the office of the general counsel must approve
exceptions to these conditions.
(j)
Faculty and staff
participating in technology commercialization ventures approved pursuant to
this rule continue to be bound by the university rule on intellectual property.
New inventions and/or discoveries made as a result of a faculty or staff
member's research efforts for the venture, will be owned by the university
unless other arrangements are made in advance. New inventions and/or
discoveries developed by the faculty or staff member for the venture must be
disclosed to the dean for research and the general counsel as required by the
intellectual property rule.
(5)
Guidelines for
students participating in commercializing technology
(a)
Students may use
university facilities, equipment and other resources to perform research
benefiting a technology commercialization venture only pursuant to a
contractual agreement between the university and the technology
commercialization venture and approved by the conflict of interest
committee.
(b)
Research benefiting a technology commercialization
venture may not be used to satisfy the criteria for a thesis or dissertation if
the material is restricted from publication or public disclosure. Students
shall be informed by their NEOMED faculty advisor in writing of this
restriction prior to the start of their research.
(c)
A student shall
not be employed by a technology commercialization venture in which a faculty
member has an ownership interest if:
(i)
The student is enrolled in a course taught by the
faculty member, or
(ii)
The faculty member is a member of the student's thesis
or dissertation committee, or
(iii)
The faculty
member is the student's advisor or the director of his or her thesis or
dissertation research.
(d)
Students may
perform research benefiting a technology commercialization venture only
pursuant to a sponsored research agreement or other formal internship agreement
through the university.
(6)
Specific
guidelines on investments by faculty, staff and students 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.
(7)
Board authorization
The board of trustees authorized the administration to establish and implement the provisions related to the commercialization of university research as necessary to carry out this rule without further ratification or action required by the board of trustees.
Disclaimer: These regulations may not be the most recent version. Ohio may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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