So They Want to Start a Company COI Presentation to the Department Chairs of The Swanson School of Engineering

1. So They Want to Start a Company…COI Presentation to the Department Chairs of The Swanson School of Engineering by Jerome L. Rosenberg, PhD Chair/COI Committee Theresa J. Colecchia, JD Associate General Counsel David T. Wehrle, CPA, CFE, CIA Director/COI Office August 25, 2009

2. Definition of Conflict of Interest A potential COI may exist if an individual’s outside interests (especially financial) may affect, or perceive to affect, his/her research, teaching, or administrative activities at the University.

3. Requirements Department chair must review faculty member’s proposed involvement with company, e.g., ownership interest and/or position in company (e.g., CEO, CSO, chair of SAB) (Policy 02-06-01)

4. Requirements (cont’d) Department chair must determine whether proposed involvement gives rise to a Conflict of Interest (COI)… asking whether the company will sell services or equipment to the University; the company will conduct research with the University—either as a sub-grantee or as a research sponsor; the faculty member is doing research not supported by, but of commercial interest to, the company; the company will want to use any University resources; students may do work for the company. e.g., a fiduciary/legal obligation to act in company’s best interests (=COI) e.g., a fiduciary/legal obligation to act in company’s best interests (=COI)

5. Requirements (cont’d) … or a conflict of commitment Faculty member must provide chair with details describing exactly what commitment to the company will entail. Total time expenditures in all outside professional activities cannot exceed one day per week on the average.

6. Requirements (cont’d) In the Superform system, faculty member must update COI form describing approved relationship with the company (https://coi.hs.pitt.edu/) Question 1b: ownership interest Question 2: position in company Note: Positions held by members of the immediate family (e.g., spouses) also must be disclosed. Question 3: remunerative activities Question 5: technology transfer activities Question 7: conduct of federally sponsored research of commercial interest to the company Question 8: conduct of research sponsored by the company

7. Requirements (cont’d) Faculty member cannot use University facilities, funds, or resources (including e-mail addresses, fax, phone, computers) in performing work for the company. Such use is appropriate only as part of a corporate research agreement (CRA). The company must have its own business office and receive its correspondence at that address, NOT at the faculty member’s University office.

8. STTRs and SBIRs involving University & Company Notifications and approvals required for STTR or SBIR grant proposals Full-time and tenured or tenure-stream part-time faculty cannot serve as PI or perform any work (i.e., allocate any % effort) under the company’s portion of the grant. SBIRs require the PI to be a full-time (i.e., >50%) employee of the company. Alternatively, faculty member may request an unpaid entrepreneurial leave of absence. Letter of Intent from Office of ResearchLetter of Intent from Office of Research

9. STTRs and SBIRs involving University & Company (cont’d) STTRs require 40% of the work to be performed by the company The company must have employees and appropriate facilities to perform its portion of the work under the grant. Company may be able to subcontracted lab work to a third party. Company may be able to subcontracted lab work to a third party.

10. STTRs and SBIRs involving University & Company (cont’d) The Office of Technology Management also may need to assess whether any University intellectual property is being used in the proposed research project. Option or license agreement to evaluate University IP under STTR or SBIR grant must be in place before work begins. Faculty member must be excluded from negotiating agreement.

11. STTRs and SBIRs involving University & Company (cont’d) Faculty member must obtain appropriate prior approvals of department chair, Office of Research, COI Office, and Entrepreneurial Oversight Committee (EOC), as applicable.

12. EOC Oversight/Requirements The University and/or its faculty, staff, and students (and members of their immediate family) who wish to hold equity in a start-up company that has an option or license to University technology must request the EOC’s prospective approval by completing an Information Submission Form and the three additional forms embedded within, as applicable: http://www.coi.pitt.edu/Forms/revEOC%20Submission.doc Approval of Entrepreneurial Activities of Faculty Member by Chair/Dean Policy Compliance Statement Notification to Students/Staff of Investigator's Financial Interest This requirement applies, regardless of whether or not an STTR or SBIR grant is involved.

13. EOC Oversight/Requirements University faculty, staff, and students (and members of their immediate family) in the aggregate cannot hold more than a total of 20% of the company’s equity, including any subsequent awards of equity (e.g., to other faculty members) prospectively approved by the EOC.

14. EOC Oversight/Requirements University faculty, staff, and students (and members of their immediate family) cannot hold management positions in the company; cannot serve on the company’s board of directors; must seek the EOC’s prospective approval regarding consultancies

15. STTRs and SBIRs involving University & Company (cont’d) Corporate Research Agreement (aka, Sponsored Research Agreement) between the company and the University must be executed company must work with Office of Research faculty member must be excluded from negotiation process.

16. STTRs and SBIRs involving University & Company (cont’d) Corporate Research Agreement University’s portion of budget must provide for the full cost of conducting the research, including appropriate indirect cost rate the use of its laboratories, and percentage effort of all parties (including the non-conflicted PI).

17. STTRs and SBIRs involving University & Company (cont’d) The faculty member can perform work under the grant at the University, subject to the following conditions: The department chair and the EOC must prospectively approve the investigator’s role in the research The conflicted investigator cannot serve as PI (unless an exception is recommended by the EOC and approved by the provost).

18. STTRs and SBIRs involving University & Company (cont’d) The conflicted faculty member may serve as a co-investigator with a COI management plan that may include the following elements: disclosure of the COI in abstracts, publications, presentations, press releases, and in proposals and applications for research funding; prospective approval by the department chair regarding involvement of students in the research; notification to research staff of faculty member’s COI; appointment of a data steward; prohibition against being sole person analyzing data (PI has final say on appropriate interpretation and presentation of research results).

19. Contacts Jerome L. Rosenberg 412-624-3007; jrosenb@pitt.edu Theresa J. Colecchia 412-624-6281; tjc5@pitt.edu David T. Wehrle 412-383-1774; wehrledt@upmc.edu Khrys X. Myrddin Associate Director, COI Office 412-383-2828 myrddink@upmc.edu Hannelore N. Rogers, MA Coordinator, COI Office 412-383-1968 rogershn@upmc.edu COI Web site: www.coi.pitt.edu Superform Web site: https://coi.hs.pitt.edu/ Keep your COI disclosures current all year - it's University policy!