Introduction

Since the University is increasingly licensing inventions and other technology to for-profit companies and is receiving income from this activity, it must pay careful attention to and resolve potential conflicts of interest that may arise. The University has established guidelines and procedures for identifying, protecting and licensing innovations resulting from University activities.  However, every employee must strive to avoid conflicts of interest and the appearance of conflicts of interest.

A conflict of interest is a breach of an obligation to the University that has the effect or intention of advancing one's own interest or the interests of others in a way detrimental to the interests or potentially harmful to the integrity or fundamental mission of the University.

Types of Possible Conflicts

There are a variety of possible avenues from which UC can choose for licensing a discovery or invention, such as a new company established for the specific purpose of bringing the invention to market. Often the choice is directed to a company which can best market the invention/discovery and has the capability to commercialize the product with wide dissemination. The importance of transfer of a technology is recognized as essential to the success of the venture. In making these decisions, the issue of personal gain of the researcher must be addressed. This requires the complete disclosure on the part of the researcher about involvement with companies under consideration, as the royalties awarded through the license will be adjusted to take into consideration any company holdings of the researcher.

Business Involvement in Research Field

A member of the faculty or staff is considered to have a potential conflict of interest if, in dealings with the University, the best interests of the University could be compromised in the personal interest of the faculty or staff member or in the interests of an external company or agency in which the individual has a significant interest. "Significant interest" implies that, as a result of affiliation with an outside organization (formal or informal), the individual can influence that organization's decisions to the detriment of UC.

Conflicts of interest which may arise for all investigators filing NIH and NSF grant and contract applications are covered by University Rule No. 3361:10-17-08; Conduct and Ethics: Policy on Conflicts of Interest in the Conduct of Research at the University of Cincinnati.

All other conflicts are governed by Ohio Revised Code Sections RC 102.01; RC 102.03; RC 102.04; RC 102.99; RC 2921.42; and RC 2921.43; and by University Rules.
 

Examples of significant interest that could lead to this situation include but are not limited to:

  1. Directorship or Managerial position (paid or unpaid) or Consulting relationship

     Examples: A company in financial difficulty owes UC money for a cooperative research program; a UC employee with a significant interest in the company could take part in a decision to pay creditors other than UC.

A UC graduate student supervised by a UC faculty member who has a significant interest in a company works on a project of interest to the company is asked to assign his or her intellectual property to the company without disclosure to UC.

A UC faculty member has a significant interest in a company and through the activity utilizes intellectual property to which students, UC staff or other faculty members have made substantial contributions without recognition or compensation to the other individuals.

Supervising faculty or staff members use University students or staff on University time to carry out work on behalf of a company in which they have a significant interest.

University resources, space or facilities are used by a faculty or staff member to benefit a private concern in which the individual has a significant interest. To protect the University, full disclosure in advance of any potential conflict of interest and, where appropriate advance approval,  may be necessary.  See the University Rule No. 3361:30-21-02 Employment Policy on Collateral Emp1oyment for Faculty Members and Librarians. Faculty members and librarians may engage in collateral employment provided information regarding such employment is made known in advance to the appropriate dean of the college or division concerned or the appropriate library administrator and provided the appropriate dean or library administrator agrees to the collateral employment.

  2. Business Decisions

A conflict of interest appears to exist when faculty and staff members take part in decisions to transact UC business with a company in which they have a material interest. Therefore, the responsibility rests with individuals to disclose whenever they have influence over a decision about a proposed contract between UC and a company in which they have substantial holdings and to withdraw from the UC decision-making process.

  3. Insider Knowledge

Unless the individual has proprietary rights (usually enforceable through copyright or patent), it is deemed to be unprofessional conduct to make use of knowledge gained through employment at UC which is not generally available to the public for non-University purposes or investments. It is a conflict of interest and therefore not permitted to use for personal gain information not in the public domain acquired as a result of a faculty or staff member's University-supported activities.

  4. Purchasing/Selling Procedures

The University's approach to avoiding conflicts of interest in purchasing and selling is to deal at arm's length with suppliers and customers by appointing agents authorized to make decisions on purchasing and selling who are separate from units and individuals standing to benefit from the purchase/sale.

See also Ohio Revised Code Sections RC 102.01; RC 102.03; RC 102.04; RC 102.99; RC 2921.42; and RC 2921.43; and by University Rules.

  5. Purchasing

All faculty and staff members who have decision-making authority or who are in a position to influence a decision about a purchase or contract must disclose in writing any personal material interest in a prospective vendor to the Director of Purchasing and withdraw from the decision-making process, if that is deemed appropriate.

  6. Selling

A conflict is considered to exist whenever a personal consideration, benefit or material interest could potentially interfere with optimizing the dollar return to UC on its goods or services sold. For this reason, the establishment of prices at fair market value and the dissemination of information about the availability for sale of goods and services are critical.

All faculty and staff members who have decision-making authority or who are in a position to influence a decision about a sale must disclose any personal material interest in the transaction to the vice president to whom their department reports, copying administrative heads and/or deans, and withdraw from the sale process if deemed appropriate.

See also Ohio Revised Code Sections RC 102.01; RC 102.03; RC 102.04; RC 102.99; RC 2921.42; and RC 2921.43; and by University Rules.

  7. Licensing Faculty-Associated Companies

The UCIPO must be particularly sensitive to public perception when a potential licensee is a faculty-associated company. While faculty-inventor input is important in licensing decisions, we are aware of the faculty-inventor's potential conflicts of interest and must negotiate from an "arms-length" relationship license agreements with faculty associated companies must meet the highest standards with respect to financial terms and diligence requirements to ensure that UC is justified in granting rights to the technology.