(A)
Policy
statement.
The board of trustees has determined
that the best interests of the university of Akron will be served if employees
who create new technology are afforded the opportunity to hold personal
financial interests in companies that are engaged in commercializing their
inventions. Employee participation with outside companies in technology
development activities will facilitate the university's goal of making its
research available for use in the private marketplace by giving researchers an
incentive to develop inventions with commercial applications. The opportunity
to participate in commercialization activities is also essential to the
university's efforts to attract and retain highly qualified researchers. The
procedures and guidelines set forth in this policy are intended to enable the
university to realize the benefits of such entrepreneurial activities while
protecting the integrity of its research and educational mission and to comply
with university policies and with applicable federal and state
laws.
(B)
Applicability.
(1)
Scope and
definitions.
(a)
This policy applies to any faculty, staff or student
employee who is the creator of a discovery, invention, work or trade secret
information that is owned by the university of Akron through the operation of
rule 3359-2-05 of the Administrative
code (university research, copyright and patent policy,)of the Administrative code (
"Inventor") and who desires to acquire an equity or other
financial interest ("Financial Interest") in a firm, corporation, or other
association ("Company") to which the university of Akron or the "University of
Akron Research Foundation" (collectively. "University") has assigned, licensed,
transferred or sold its interests in the discovery, invention, work or trade
secret information made or created by that employee or in a patent or copyright
issued to that employee ("Intellectual Property").
(b)
This policy deals
only with the acquisition by an inventor of a financial interest in an entity
that is developing and/or using technology based on intellectual property that
was created by that inventor: accordingly, the term "Company" refers only to
such an entity. For purposes of this policy. "Inventor" includes the inventor's
spouse and members of his or her immediate family and any firm, corporation or
other association controlled by the inventor: and "Financial Interest" includes
any stock, bond, warrant, option, loan or other equity or debt interest in a
company, or promise of the same, as well as paid consulting or employment with
a company.
(2)
Relation to the Ohio ethics laws.
(a)
This policy
creates an exception to chapter 102 and sections
2921.42 and
2921.43 of the Revised Code
(collectively, the "Ohio Ethics Laws"). Among other things, these laws prohibit
public officials from having an interest in the profits or benefits of a public
contract entered into by or for the use of the governmental unit with which
he/she is connected, or from soliciting or accepting anything of value that is
of such character as to manifest a substantial and improper influence upon
him/her with respect to the performance of his/her duties. Compliance with this
policy will provide an inventor who acquires a financial interest in a Company
with an exemption from these and other possibly applicable provisions of the
Ohio ethics laws. A failure to comply with this policy could result in a
violation of the Ohio ethics laws.
(b)
This policy
applies only to inventors, as defined. Consequently, employees other than
Inventors who acquire a financial interest in a company that is developing
university-owned intellectual property should consult their own legal advisers
to determine whether the transaction violates the Ohio ethics
laws.
(3)
Relation to other university rules.
Inventors seeking to comply with this
policy should also consult other rules of the Administrative Code on related
subjects. It is the intent of this policy that it be administered consistently
with all other university rules and policies that may apply to the same
circumstances.
(4)
Other matters not covered.
This policy does not deal with the
terms and conditions under which the university will assign, license, transfer
or sell intellectual property to an entity that will become a company upon
acquisition of rights in the intellectual property, or with the terms and
conditions upon which the university will require or accept an equity interest
in a licensee company. These and all other terms and conditions of licensing
agreement will be determined pursuant to other university policies. Generally,
such transfers and/or equity participations will not be made or entered into
unless it is determined both that the proposed company has the resources (or a
reasonable plan to obtain the resources) necessary for development of the
technology, and that it has a satisfactory business plan for such
development.
(5)
Effective date.
This policy shall apply only to
acquisitions of financial interests or licenses, assignments, transfers or
sales of intellectual property that occur on or after the date of this initial
adoption.
(C)
Policy
requirements.
(1)
An inventor may solicit or accept a financial interest
in a company if, but only if, he or she has first complied with the
requirements of this policy.
(2)
It should be
noted that an entity organized for the purpose of commercializing intellectual
property will not become a company until the university has assigned, licensed,
transferred or sold its interest in the intellectual property to the company.
Consequently, an inventor who is participating in the organization of a company
that expects to license intellectual property from the university should comply
with this policy before the intellectual property has been licensed to the
company, or before soliciting or accepting a financial interest in the company
if it already has acquired the license.
(3)
The university
will not knowingly license intellectual property to an entity in which an
inventor has financial interests until there has been compliance with this
policy. It may, however, grant an option to acquire the license conditioned on
compliance with the policy. This will protect the entity's interest in
obtaining the necessary license while the inventor seeks approval for the
proposed financial interest.
(4)
Employees who
wish to participate in a start-up company may discuss initial company formation
with the office of the vice president for research. However, negotiations
between the university and a company seeking to license its intellectual
property should, to the extent possible, be conducted by company
representatives other than the inventor.
(D)
Approval
process.
(1)
Compliance with collateral employment requirements.
An inventor seeking approval to hold a
financial interest in an existing or proposed company shall first comply with
Rule 3359-11-17 of the Administrative
Code, as applicable, relating to consulting and collateral employment. This
requirement applies regardless of the nature of the financial interest
involved, and thus must be met even in cases where no consulting will occur and
the only financial interest is a passive equity interest in the company. In
addition to the conflict of interest and commitment reports that are required
by the applicable rule, the inventor shall submit a supplemental report
containing:
(a)
A complete disclosure of the inventor's proposed
financial interest in the company; and
(b)
A conflicts
management plan that addresses the following issues:
(i)
Management of
university obligations. The conflicts management plan shall describe the
inventor's university duties (e.g., teaching loads, committee assignments,
etc.) and explain how potential conflicts of commitment will be managed so that
these university duties can continue to be fully performed. Inventors who are
unable to perform the full range of their university duties must request a
reduction of appointment or other approved leave. Professional improvement
leave authorized under section
3345.26 of the Revised Code may
not be used for private business purposes.
(ii)
Proposed
participation in management of the company. Inventors may hold temporary
management positions in a company that is in the start-up phase. However, it is
expected that the company will obtain professional management as soon as this
is practical, and that the inventor's participation in the company's management
will decrease as the company develops. The conflicts management plan must
describe the contemplated participation in management and provide enforceable
milestones for the reduction of the participation. As a general rule, Inventors
should not hold management positions in established companies.
(iii)
Limitation of
equity ownership. Although an inventor may hold a significant equity interest
or debt position in a company in its initial stages of development, it is
expected that the inventor's percentage of ownership will decrease as the
company develops and attracts additional investment. The conflicts management
plan must describe the inventor's contemplated initial equity and/or debt
participation in the company and provide enforceable milestones for reduction
of that interest to not more than twenty-five percent of the company's total
equity or debt, as the case may be, or such other level of financial interest
as the inventor and university may mutually agree.
(iv)
Use of
university facilities. The conflicts management plan shall describe any
proposed use of university facilities, equipment or other resources to further
the business interest of the company. No such use will be permitted except
pursuant to a sponsored research agreement or a facilities use agreement with
the company that is approved by the office of research and processed in
accordance with the university's contracting procedures.
(v)
Student
employment. The conflicts management plan shall describe any proposed use of
university students to further the business interest of the company. The
inventor may not use university students for this purpose as part of a
student's assigned academic work, but the company may employ students pursuant
to an employment plan that has been approved by the chair of the student's
department and, if applicable, the chair of the graduate studies committee.
Students may perform research that benefits the company when the work is being
performed pursuant to a sponsored research agreement or a formal internship
agreement between the company and the university.
(2)
Approval by research office.
Upon compliance with the applicable
collateral employment procedures, the approved collateral employment form and
conflicts management plan that has been approved by the appropriate chair(s)
and dean(s) shall be forwarded to the office of research for final approval by
the vice president for research. In granting such approval, the vice president
may consult with the provost and the office of general counsel and may make
such additional conflict management requirements as are deemed necessary to
approval of the inventor's proposed financial interest in the
company.
(3)
Compliance.
Compliance with an approved conflicts
management plan shall be the responsibility of the inventor's academic unit
head/chair and dean or staff supervisors, as the case may be, in consultation
with the office of research. Violations of the conflicts management plan may
subject the inventor to university discipline, or deprive the inventor of the
exception to the Ohio ethics laws that would otherwise be applicable. In
addition, the university's license agreement, facilities use agreement,
sponsored research agreement or other agreement with the company may provide
for termination or other remedy if the inventor fails to comply with the
conflicts management plan.
(4)
Annual
review.
To assure continued compliance with the
plan, the office of research shall annually conduct an assessment of the
inventor's performance under the conflicts management plan. Such assessment
shall include a report from the inventor's academic unit head and dean or staff
supervisors respecting the adequacy of the inventor's performance of his or her
assigned university duties and a review by the office of research of the extent
to which the milestones that are contained in the conflicts management plan
have been met. Any deficiencies that are noted shall be discussed with the
Inventor with a view to achieving compliance or modifying the plan or the
related agreement with the company. A failure to reach agreement on compliance
can result in one or more of the consequences described in paragraph (D)(3) of
this policy.
(5)
Freedom from conflicts in the administration of this
policy.
University officers and employees shall
not participate in the approval process or in the administration or enforcement
of this policy with respect to a company in which they have a financial
interest.
Replaces: 3359-11-18
Notes
Ohio Admin. Code
3359-11-18
Effective:
1/31/2015
Promulgated Under:
111.15
Statutory
Authority: 3359.01
Rule
Amplifies: 3359.01
Prior
Effective Dates: 05/23/02, 06/25/07
