AVOIDING CONFLICT IN FACULTY CONSULTING

Judith L. CurryAssociate General Counsel

NC State University

December 2, 2011

Board of Governors Policy

Board of Governors Conflict of Interest/Commitment Policy:– “Participation of EPA employees

in….consulting, is an important characteristic of academic employment that often leads to significant societal benefits, including economic development through technology transfer.”

Board of Governors Policy

“However, such external professional activities for pay are to be undertaken only if they do not– Create a Conflict of commitment– Create a Conflict of interest– Involve inappropriate use or exploitation of

University resources…”

NCSU Regulations and Policies

NC State Conflicts of Interest and Commitment Regulation [REG01.25.01]

Patent and Tangible Research Policy [POL10.00.01]

Consulting Must be Reported and Approved In AdvanceMust be reported at least 10 days in

advance [NOI]Department Head ApprovalMay require update of COI report

Testing and Services AgreementProject Coordinator certifies:

– No research component– NOT WORKING AS CONSULTANT– WILL NOT IN FUTURE CONSULT FOR

PURPOSE OF ANALYZING DATA

Use of University Space and EquipmentGenerally not permittedInappropriate use or exploitation of

University resources means using any services, facilities, equipment, supplies or personnel which members of the general public may not freely use.

BOG Policy 300.2.2 Conflict of Interest and Commitment

TSA or Lab Use Agreement

TSA FORM ON SPARCS websiteLAB USE AGREEMENT

OGC website Contract Library

Conflicts of Commitment

Consulting which involves time commitment that interferes with employee’s accomplishing university duties

Conflicts of Interest

An employee has a conflict of interest when:Personal interestAffects or appears to affectObjectivity in conduct of University duties

Example:

Consulting for a company with regard to the same subject matter for which he/she acts as principal investigator under a research agreement sponsored by company

Also may violate N.C.G.S. 14-234(a)(1) which prohibits public employees from deriving a direct benefit from public contracts

Consulting and the Copyright PolicyCondition of EmploymentCopyright

– Only Directed Works Must be Assigned– University Shop Right

Consulting and the Patent Policy Article 6, Patent and Tangible Research

Policy Assignment to University

– University administered funds– Scope of Employment– Substantial Use of University resources

Scope of Employment

North Carolina Law:Employer may require assignment unless

the invention does not relate to the employer’s business or actual or demonstrably anticipated research or development N.C.G.S. 66-57.1

Inventions Made with Substantial Use of University Resources Resources that would not be available to

unaffiliated personExceptions

– Minimal office use– Library– Personal Computer

Key Terms in Industry Consulting AgreementsConfidential Information/Data ProtectionIntellectual Property Ownership (Roche

type language)LiabilityIndemnityChoice of Law/ForumNon-Compete

Stanford v Roche

Board of Trustees of the Leland Stanford Junior University v Roche Molecular Systems, Inc., 131 S.Ct. 2188, 180 L.Ed.2d 1 (June 6, 2011)

How Can I Avoid Conflict Between My Consulting and University Policies?Report NOI/COI Provide copy of University Patent Policy

to companyDefine narrowly and precisely the subject

matter of consultancy

What Are The Legal Risks To Me Personally In Engaging In Consulting?Damages for Breach of ContractLiability for misappropriation of state

property (intellectual property)

How Can I Minimize The Risk Of Liability For My Consulting?

Spell out clearly your responsibilities to the University

Consult personal legal counsel and obtain review of contract

Obtain errors and omissions insuranceSeek guidance from Office of General

Counsel if questions about University policies