For Faculty: Best Practices For Startups

Faculty-associated startup companies (“startups”) are both opportunities and challenges for Yale. Yale has had a long history of entrepreneurial activity by faculty, students, staff and alumni and the university is, in general, supportive of its entrepreneurs.

On the other hand, Yale is an institution of public trust, with education and research as its mission, and a requirement to maintain openness in research. Therefore, entrepreneurial activity must be balanced by careful review of the proposed relationships, which may or may not be allowed. These relationships may require active management to assure openness in research, academic freedom for trainees, and clear understanding about how conflicts of interest are to be managed.

Yale is committed to avoiding either perceived or actual conflict of interest issues with respect to faculty startups. Both Yale and its faculty members have responsibilities to optimize technology transfer and mitigate COI when licensing Yale IP to a startup is considered.

OCR makes licensing decisions based on its professional judgment about technology transfer to achieve the best possible benefit to the public, without undue influence from internal or external parties.

OCR takes several steps to effectively transfer the technology while managing conflict of interest. First, OCR markets all Yale technology to ensure fair and open access to potential licensees – faculty startups should not receive or be perceived as receiving preferential treatment. Second, Yale faculty/employees are not allowed to represent the potential licensee and must not negotiate directly with OCR. Third, OCR licensing agreements may be exclusive or non-exclusive depending on what is most suitable for a given technology. Finally, the faculty member’s School Dean must review any actions that present a potential conflict of interest, specifically:

• If, after thorough marketing, OCR determines that a faculty-affiliated company is the appropriate licensee, then it documents its marketing results and summarizes the rationale for its licensing decision for the Deans.

• The faculty member must disclose any interest (consulting fees and/or stock options) in the startup to the Deans.

• The faculty member must agree to separate University responsibilities from company responsibilities according to the criteria listed under Faculty Responsibilities.

• OCR may proceed with licensing only if the conflict is deemed manageable by the Deans (based on the faculty member’s plan for separating responsibilities).

Faculty members are responsible for separating University duties for research and education from personal financial interests in the company.

Faculty must:

• Separate and clearly distinguish on-going University research from work being conducted at the company.

•  Serve only in advisory or consultative roles at the company [as opposed to managerial roles or titles (e.g., CTO) suggesting management responsibility].

• Seek a leave of absence if intending to engage in a management role.

Faculty must not:

• Negotiate with the University on behalf of the company.

• Involve research staff or other University staff in activities at the company. Company personnel cannot be affiliated with the University.

• Involve current students in company activities. If a student asks to take a leave of absence to participate in the company, the student should be referred to the COI Committee who will review the request and offer independent advice.

• Involve junior faculty that they supervise in company activities prior to review by the COI Committee. Even if the faculty member does not have a supervisory role, he or she should avoid situations in which junior faculty might feel expected to be involved in the company.

• Use University facilities for company purposes.

• Undertake human subjects research at the University as PI/protocol director.

• Supervise faculty who are PI/protocol directors for human subjects research related to the company.