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2017 Annual Meeting of the Council of Sponsoring Institutions
Karen A. Mullin, JD, LLM
Chief General Counsel/Director of Technology Development
The Forsyth Institute

Published in: Government & Nonprofit
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  1. 1. FACULTY CONSULTING: CONFLICTS OF INTEREST AND BEYOND Karen A. Mullin, JD, LLM Chief General Counsel/Director of Technology Development The Forsyth Institute ORAU Annual Meeting March 8, 2017
  2. 2. 2 Overview of Presentation – What Will Be Covered • Establish what consulting relationships are appropriate; • The role of the institution (if any) in review of faculty consulting agreements; • Conflicts of interest arising from faculty consulting; and • Intellectual property issues arising from faculty consulting.
  3. 3. 3 What is Faculty Consulting? • Faculty consulting can generally be considered to be any activity that: – is not included within a faculty member’s employment responsibilities; – is performed for any entity other than the faculty member’s institution; – is undertaken for compensation; and – is based upon the professional knowledge, experience and expertise of the faculty member.
  4. 4. 4 Four Key Questions In order for an institution to effectively evaluate whether a consulting arrangement is appropriate, four key questions need to be answered: –What type of consulting is contemplated? –When will the consulting occur? –Where will the consulting occur? –Will it be paid, and if so, to whom?
  5. 5. Institutional Concerns with Faculty Consulting • Compliance with institutional policies (particularly IP policies and COI policies); • Potential liability of institution; • Use of institution’s name; • Publicity arising from faculty consulting work; and • Tax reporting consequences. 5
  6. 6. 6 Faculty Consulting Agreements: To Review or Not to Review Three strategies adopted by academic institutions: 1. Do not review at all (“Ostrich Approach”); 2. Review only to ensure compliance with institutional policies; and 3. Review and negotiate in full.
  7. 7. 7 No Review of Faculty Consulting Agreements by Institution PROS: • This approach clearly separates the academic institution from its faculty members’ consulting arrangements. • There can be no inference that the academic institution was involved in the consulting relationship. • Institutions do advise their faculty to retain personal counsel to review consulting agreements. CON: • Institution has absolutely no knowledge or control over what obligations have been agreed to by its employee.
  8. 8. Institutional Review of Faculty Consulting Agreements ONLY to Ensure Compliance with Policies 8 PROS: •This is a “compromise approach” focused on addressing institutional concern re. compliance with policies. •Focus of institution’s counsel is solely to ensure that faculty member is not violating any institutional policies. CONS: •Challenge for institutional counsel to refrain from advising on other issues; •Faculty member often less likely to retain personal counsel to review other provisions of the agreement.
  9. 9. PROS: •This approach provides maximum control & protection for the institution. CONS: •Creates potential risks for institution: (1) exposure to liability arising from the consulting work; (2) inference that faculty member is consulting in his capacity as an employee of institution; and (3) faculty member may hold institution responsible for any contractual issues arising between company and faculty member. •Cost to institution for compensating legal counsel for review of consulting agreements can be significant. 9 Full Review & Negotiation of Faculty Consulting Agreements by Institution’s Counsel
  10. 10. Faculty Consulting and Conflicts of Interest • Consulting does not necessarily create a financial conflict of interest. • Is there a secondary relationship as part of the faculty member’s institutional responsibilities? For example: – being a researcher studying the entity’s products, technology or services; – being funded by the entity to do research; – making purchasing decisions involving the entity’s products; or – being the recipient of a directed donation from the entity. 10
  11. 11. Evaluating Conflicts of Interest Arising From Faculty Consulting Who decides? Committee or Institutional Official Different Types of Conflicts: –Actual –Potential –Appearance 11
  12. 12. Faculty Conflict of Interest Management Key Principles: • Transparency; • Honoring the student/ trainee experience; • Avoiding inappropriate influence, even bias; and • Protecting the credibility of the faculty member’s institutional work. 12
  13. 13. • Management Plans –Public Disclosure –Independent Review of Data –Change in Roles –Monitoring Committee • Alternative Options for Trainees • Alternative Administrative Routing 13 Tools for Effective Conflict of Interest Management by Institutions
  14. 14. Intellectual Property Issues Arising from Faculty Consulting • Ownership of “deliverables” or “work product” generated by faculty member in the consulting work is critical to the company and always addressed in the consulting agreement. • Although the faculty member is performing the consulting work outside of his/her employment, he/she must still adhere to institution’s IP policies. • A faculty member cannot grant a company rights to inventions/discoveries that are covered by his/her institution’s IP policy and owned by the institution. 14
  15. 15. Bayh-Dole Act Considerations • Bayh-Dole Act applies to inventions conceived or first reduced to practice in the performance of work funded by the federal government. • Faculty members who conduct federally funded research and perform external consulting work need to be informed of the obligations owed to the federal government under the Bayh-Dole Act, and ensure that they are not using inventions developed with federal funding in their consulting work and that they are not granting the companies retaining them any rights to such inventions. 15
  16. 16. Use of Institution’s Intellectual Property in Faculty Consulting • Faculty members must ensure that they do not use in their consulting work any IP that they developed in their capacity as an employee of their institutions. • Neither academic institutions nor companies retaining consultants want faculty consultants using the institutions’ IP in consulting work. • Academic institutions need to ensure that their faculty are informed of such limitations as at times it can be challenging to segregate the IP, or if an institution’s IP is to be used, an appropriate agreement is in place with the institution. 16
  17. 17. Questions 17
  18. 18. Thank You! Karen A. Mullin, JD, LLM Chief General Counsel/Director of Technology Development The Forsyth Institute Cambridge, Massachusetts (617) 892-8223