Scope of Advisory Group #6:
Conflicts of Interest and Commitment
Members of the UC faculty must increasingly balance their primary professional allegiance to the University with responsibilities and commitments that arise from their external activities, such as consulting, participating in a private commercial enterprise, or performing pro bono public service work. Conflicts of commitment may result when the time and intellectual energies devoted by the faculty member to outside activities exceed the limits permitted by University policy, or when a fulltime faculty member's primary professional loyalty is not to UC. A conflict of interest occurs when there is an entanglement of an individual's private interests and his or her professional UC obligations such that an independent observer might reasonably question whether the individual's professional actions or decisions are determined by considerations of personal gain, financial or otherwise. Such conflicts are of increasing concern, and perhaps, are unavoidable, as the University aggressively pursues a technology transfer mission. Two important means of accomplishing this mission are faculty consulting and the commercialization of technologies derived from University research. It is generally agreed that it is appropriate that faculty be rewarded for their participation in these types of activities, but that it is inappropriate for one's University actions or decisions to be determined by considerations of personal financial gain. The University has several policies to provide means for faculty and the University to manage conflicts of interest and to promote the best interests of students and others whose work depends on faculty direction.
Advisory Group #6 will review current UC policies and guidelines pertaining to the identification, prevention or management of faculty conflicts of interest and commitment. The Group will consider whether these policies and the approach to implementing them support the University's interest in expanding its relationships with industry while simultaneously protecting the integrity of the University as an institution of public trust.
Participants in Advisory Group #6:
Conflicts of Interest and Commitment
Jay Stowsky (Chair)
Director of Research Policy
and Development
UCOP
Dorothy Greene Crocker (Specialist)
Director of Sponsored Programs
UCD
David Aston
Associate Director, Office of
Technology Transfer
UCOP
Charryl Berger
Acting Program Director, Industrial
Partnership Office
LANL
Haile Debas
Dean, School of Medicine
UCSF
W.R Gomes
Vice President, Agriculture and
Natural Resources
UCOP
Marion Lentz
Manager, University/Industry Research
UCB
Martin Rachmeler
Director, Technology Transfer Office
UCSD
Niels Reimers
Director, Office of Technology
Management
UCSF
David G. Schetter
Director, University/Industry Research &
Technology Office
UCI
Robert N. Shelton
Vice Provost for Research
UCOP
P. Martin Simpson
Resident Counsel, Office of
Technology Transfer
UCOP
Delia H. Talamantez
Director, Conflict of Interest,
Environmental Health & Safety
UCSD
Robert T. Tjian
Professor, Molecular and cell Biology
UCB
Harry W.K. Tom
Professor, Physics
UCR
Stephen White
Professor, Physiology and Biophysics
UCI
Report of Advisory Group #6:
Conflicts of Interest and Commitment
On the first day, group members were asked to identify the major opportunities and concerns associated with the University's approach to dealing with conflicts of interest and commitment. On the second day, group members were asked to derive a set of guiding principles and a set of recommended actions. The two-day discussion is summarized at the end of this report.
Opportunities:
1. To encourage University and Laboratory faculty and staff relationships with industry.
2. To educate the faculty and staff about sources of conflict or potential conflict between a faculty member's private interests and his or her professional obligations.
3. To acknowledge that such conflicts arise often in the normal course of university/industry relationships, that they are sometimes unavoidable, and that they do not necessarily reflect bad faith on the part of any individual or the intent of the institution.
4. To create an environment in which faculty and staff willingly disclose any personal financial interests related to their research because they know that the University values and encourages their relationships with industry and their involvement in efforts to promote the commercialization of inventions resulting from their own research.
5. To create a single, clear policy that reflects UC values and concerns, that clearly links any financial disclosure obligations to those values and concerns, and that articulates that when a faculty investigator has a relationship with a private company, he/she is not necessarily engaging in any unethical activity.
6. To be prepared, by having a comprehensive and clear policy in place and by having the data necessary to demonstrate the University's commitment to manage conflicts of interest, to work with the California Fair Political Practices Commission (FPPC) and/or the California State Legislature, to make State-mandated financial reporting requirements for UC PI's more consistent with federal reporting requirements.
7. To reduce the paperwork burden on faculty and staff by, among other methods, using more automation in processing information. There is also an opportunity to approach the California State Legislature and the FPPC regarding permission for the use of electronic mail and electronic signatures in processing State disclosure documents.
8. To enable the University to address legitimate conflict of interest and commitment concerns while also nurturing a spirit of creative entrepreneurship and continuing to promote the University's primary missions of teaching, research and public service. This can be done, in part, by writing a clear policy and creating clear, concise educational materials for use by faculty, administrators and staff.
Concerns/Challenges:
Financial attachments between a faculty member and a company can give rise to concerns, on the part of independent observers, about potential conflicts between that faculty member's private interests and his or her professional obligations. A partial list of such concerns includes:
1. Protecting students. This can take the form of protecting students from being used to do product development for a company in which the faculty member has a personal financial interest or pressure on the student to shift thesis topics to reflect the objectives of the commercial sponsor. It may also include concerns related to the general issue of whether or not it is appropriate for a PI to hire his/her students to work for his/her own company.
2. Pipelining of information. This can take the form of reduced openness about research findings among faculty colleagues and between faculty and students, a reduction in publications after a technology is transferred to a company, or resistance to working with visitors or faculty colleagues associated with a company's competitors. In addition, there is some concern that, due to reduced openness, some inventions are not promoted as aggressively or creatively as they should be, therefore UC is losing opportunities to license those inventions. Finally, there is concern that it is not clear to PI's how long the proprietary data can be held before publishing or sharing with colleagues.
3. Commercialization of research agendas. This can take the form of changes in the direction of research on campus to support a company's private product development efforts.
4. Time Allocated to University Responsibilities. This can take the form of faculty members not teaching the required number of courses for percentage of time; consulting with the company over the allotted time allowed; and holding a position in the company more than an advisory role.
5. Various Impacts of Equity Ownership. When PI's own equity, own a company, and/or hold patent rights outside of the University, there is increased potential that the PI may try to apply pressure on the University to award the licensing agreement to his/her company. In addition, when the University itself owns equity, there is cause for concern that the University might change its behavior in the interest of financial gain. Such concerns include pipelining future inventions and/or providing favored treatment in licensing decisions to companies in which the University has a financial interest, or biasing promotions unfairly in favor of faculty members who have brought industry funding into the University.
6. Out-of-Date Policies. The University needs to update its policies to reflect the aim of encouraging academic/industry relations; the challenge is to promote these relationships while maintaining the integrity and good public perceptions of the University. Both OTT policies, as well as the Guidelines on Industry/University Relations, need to be updated to reflect these concerns.
7. Inadequate Education. Many faculty members state that they need to know more about what is an acceptable relationship with industry. Educational materials need to be developed to better inform faculty of the guiding principles, values and processes to obtain a contract, a grant, COI disclosure approval, and a licensed invention. UCOP should work closely with the campuses and the Laboratories to develop a Universitywide set of such materials.
Guiding Principles:
1. Faculty and Laboratory staff efforts to transfer the results of academic/Laboratory research and invention to industry are an essential means to achieving the University's teaching, research and public service missions.
2. It is appropriate for faculty and Laboratory personnel to be rewarded for their participation in such efforts, for example, financially or in terms of professional advancement, but it is not appropriate for a UC employee's actions or decisions made in the course of his/her UC activities to be determined by considerations of personal financial gain.
3. Especially because UC is a public institution, the establishment of credibility and public trust requires that steps also be taken to avoid even the appearance of unmanaged/undisclosed conflicts through better mitigation and management of potential conflicts.
4. UC policy should strive to educate University personnel about potential sources of conflict and the rationales behind University procedures to identify and manage apparent conflicts. The standard for requiring disclosure of a personal financial interest should be that an independent observer might reasonably question whether that interest biases the UC employee's official actions or decisions.
5. UC personnel, including members of the faculty and Laboratory staff, are obligated to identify real or perceived conflicts of interest and conflicts of commitment and also to disclose personal financial interests as stipulated by state, or federal regulations, or University policy. The University is obligated to provide faculty and Laboratory staff with better information regarding the potential sources of such conflicts. The University will then take steps to independently determine whether such conflicts exist and to manage or eliminate such conflicts.
6. To the greatest extent possible, individual investigators should bear the responsibility for understanding potential sources of conflict, understanding the rationale for disclosing and managing potential conflicts, and making the required disclosures.
7. A UC faculty member is obligated to maintain a significant presence on campus, and UC employees are obligated to devote the required time for teaching and publishing, or National Laboratory missions, and not to exceed time allowed for outside activities, including consulting to companies. A statement should be included on PI consulting agreements which clearly outlines that inventions be disclosed to the University, and that consulting must be kept separate from the PI's University research. In addition, the Department Chair must be informed about any consulting, with or without a formal agreement.
8. The University is committed to an open teaching and research environment.
9. University resources, including facilities, should be devoted to activities that support teaching and research; they should not be used for routine tasks of a purely commercial character. In addition, it is not appropriate for faculty to use gift monies (which do not pay overhead) to conduct research of interest to a company simply to avoid indirect costs.
Recommended Actions:
1. Instead of requiring faculty to avoid conflicts, UC policy should explicitly recognize that such conflicts are common and often unavoidable, and thus should be disclosed and managed in cases where their outright elimination would also preclude a beneficial university/industry relationship.
2. New mechanisms should be created to ensure that conflict of interest issues are dealt with earlier in the technology transfer process. The process should be able to flag those relationships that may need to be addressed with Conflict of Interest Coordinators. In addition, the process needs to build in routine interactions between these offices.
3. UCOP should define the objectives of the University's conflict of interest policies and state both Federal and State-mandated requirements. Campuses and Laboratories should be given general guidelines with wide discretion to decide how best to meet those requirements.
4. Policy should deal explicitly with "institutional" or University conflict of interest concerns related to the new policy allowing the University to accept equity in partial lieu of payment for licenses to UC technology.
5. Policies should be rewritten to encourage a sense of trust and common endeavor to promote voluntary disclosure of relevant personal financial information and openness with colleagues and students, and to minimize the filling out of forms and other paperwork for both faculty and Laboratory staff.
a. There is considerable support for the elimination of negative disclosures (i.e., requiring faculty members and Laboratory staff to fill out and sign a form stating they have nothing to disclose). However some members of the University community feel that the ability to review negative disclosures is beneficial in the management of potential conflicts of interest. For the State disclosure process, elimination of the negative disclosure requirement would take an act of the State Legislature, unless UC PI's are removed, by agreement with the FPPC, from the University's conflict of interest code.
b. There is also considerable support for automation of disclosures. Electronic federal disclosures are currently allowed, which could minimize paperwork if a system were developed on each campus. However, the State disclosure process requires a signature and, currently, an electronic signature is not permitted. Permission to use electronic signatures in the State disclosure process would have to be discussed with the FPPC and, possibly, the State Legislature.
6. Enforce existing policy on disclosure and management of outside professional activities and clarify conflict of interest issues related to faculty and Laboratory staff consulting.
7. There should be one single, clear Conflict of Interest and Commitment policy that reflects UC values and concerns, that clearly links any financial disclosure obligations to those values and concerns, and that articulates that when a faculty or Laboratory staff investigator has a relationship with a private company, he/she is not necessarily engaging in any unethical activity.
8. Faculty and Laboratory conflict of interest committees (and staff) should have the resources they need to do their work and should not be used to manage/mitigate situations that are not clearly and explicitly within their jurisdiction.
Summary of Discussion:
In general, group members felt that the University of California needs to change its attitude toward conflicts of interest and commitment that arise in the context of faculty and Laboratory staff interaction with industry. They want the policy and procedures the University uses to manage such conflicts to be clearer, less punitive, and more streamlined in terms of paperwork. They also want campuses and Laboratory staff to have more discretion in implementing systemwide policies once they are clearly articulated by the Office of the President. At the same time, they feel that concerns about potential and actual conflicts are quite legitimate, and that the University should in fact encourage more disclosure, not less. There are serious gaps in the University's "arsenal" for dealing with these problems, and a major source of those gaps is the University's reliance on external agency requirements (FPPC and NSF/PHS) instead of an internally-generated set of norms and policies. The general feeling is that if faculty and Laboratory staff felt that their relationships with industry were encouraged and valued, and if they were educated as to potential sources of conflict and the concerns that arise because of them (both internally and externally), they would be more likely to view disclosure as a justifiable obligation of "citizenship" at the University of California.
Comments on the Report of Advisory Group #6:
Conflicts of Interest and Committment
All comments were incorporated into final report.
