Attachment A to RPH 4.3: Consulting and Other Outside Professional Activities by Members of the Academic Council and Medical Center Line Faculty

Date: Promulgated by the University Provost, September 7, 2010

Dear Colleagues,

As you know, Stanford encourages research relationships with other entities as a way to foster the transfer of knowledge gained through University research and scholarship for societal benefit. We also recognize, however, that our concern to preserve openness in research may be at odds with the need of for-profit companies to keep research information and materials proprietary. With these differences in mind, I would like to review Stanford’s policies governing two types of agreements that faculty enter into without direct University oversight. These are personal consulting agreements and non-disclosure agreements (NDAs). As a Stanford faculty member, it is your responsibility to know the principles and policies that must be followed when entering into such agreements.

If you enter into a consulting or non-disclosure agreement with a commercial entity, a copy of the attached summary of Stanford University Requirements for Faculty Consulting Activities and Agreements must be provided to the company.

Consulting:

Any consulting agreements with outside entities should carefully delineate and separate your university responsibilities from consulting responsibilities. Specifically, these agreements must not involve or address Stanford University, or its resources and people, including students, postdoctoral scholars and staff. You are responsible for making sure that your consulting activity and the terms of any written agreements are consistent with requirements of the faculty Conflict of Commitment and Interest policy and your university obligations related to inventions and other intellectual property . The School of Medicine also prohibits consulting that is solely or primarily for commercial marketing purposes. To avoid confusion, correspondence and agreements related to consulting activities must not use Stanford letterhead or appear to be Stanford documents. Finally, facilities and services of the University may not be used in connection with your consulting, except in a purely incidental way.

Non-Disclosure Agreements:

In their capacity as University employees, Stanford faculty and staff may not engage in confidential work for an entity other than Stanford. Confidential work for another entity may only be pursued during time allowed for consulting.

Any confidential information received for research purposes at Stanford must be incidental to University research activities and may not interfere with the participation of anyone at Stanford in the intellectually significant portions of the research activity Openness in Research Policy. Within these important limits, if it becomes necessary for you to share confidential information with, or receive information from, another entity for your work at the University, you may personally sign a Confidentiality Disclosure Agreement (CDA) or Non-Disclosure Agreement (NDA). The agreement must state clearly that you are signing in your individual capacity and covers only your own activities. If it is necessary for those you supervise to receive confidential information, they must separately sign a confidentiality agreement, but only if the confidential information to be received is incidental and with approval of your school dean. (See also Export Control information.)

Some CDAs or NDAs presented to faculty for signing may contain intellectual property provisions impacting Stanford’s rights in patents, copyrights, or patentable technology or copyrightable works. Faculty may not sign any agreement that could affect Stanford’s or other Stanford researchers’ rights in intellectual property or your Stanford obligations related to intellectual property.

The CDA/NDA must not include Stanford University as a party. Individual researchers, faculty members and other employees have no authority to sign CDAs or NDAs on behalf of the University, their school or department, or any other division or department of the University. Stanford generally does not sign CDA/NDAs on behalf of the University, because there is no institutional mechanism to ensure the confidentiality of information received.

NOTE: The summary of Stanford’s policies will be available for downloading on the Research Policy Handbook website, the Office of Technology Licensing , and from your school dean’s office.

Please contact your school dean’s office or the office of the Dean of Research to discuss any questions that you may have concerning consulting agreements; the Industrial Contracts Office will advise about CDA/NDAs related to your Stanford work.

September 18, 2013

Attachment B: RPH 4.1

Faculty Policy on Conflict of Commitment and Interest

Are faculty permitted to invest in start-up companies of current Stanford University students?

All faculty should consider carefully whether investing in any current student or postdoctoral fellow’s company is in the best educational interest of the student or fellow, whether or not the faculty member has any involvement with the student’s academic program. However, a higher standard applies when a faculty member has direct involvement in a student or postdoctoral fellow’s academic program, including as the academic advisor, an honors/PhD thesis advisor, or a classroom teacher in the student’s major. In these circumstances, a faculty member who wishes to invest in a current student or postdoctoral fellow’s start-up company must receive approvals from the Dean of the student or postdoctoral fellow’s school, the Dean of the faculty member’s school and the Vice Provost and Dean of Research. The strong presumption is that such involvement would constitute a significant conflict of interest that could not be mitigated or managed and that it would therefore not be permitted. Academic staff, other teaching staff, and those who directly interact with students and postdoctoral fellows in the role of instructor or advisor should also follow these procedures.

What would be the nature of the conflict of interest in this situation?

University policy states that “a conflict of interest occurs when there is a divergence between an individual’s private interests and his or her professional obligations to the University such that an independent observer might reasonably question whether the individual’s professional actions or decisions are determined by considerations of personal financial gain.” More specifically regarding conflicts of interest in teaching and educational activities, University policy states that: “education and guidance given to students by faculty, including the nature and direction of research or other studies, should be governed by what is in the academic interest of the student.”

A faculty member investing in a current student or postdoctoral fellow’s company inherently creates a situation in which an independent observer might reasonably question whether the individual’s professional actions or decisions in relation to that student or fellow are determined by considerations of personal financial gain. Examples of actions that could be based – or perceived to be based – on considerations other than the academic interest of the student or fellow include:

• Advising a student to leave school to devote full time to his/her company rather than staying in school to complete his/her degree
• Permitting a student to spend an inordinate amount of time on company activities, rather than focusing on his/her academic program as expected by Stanford policy (RPH 10.6 Relationships Between Students (Including Postdoctoral Scholars) and Outside Entities
• Directing a student or fellow’s research toward a topic that might increase the potential success of the company
• Generally treating a student or fellow that has  a company in which the faculty member has invested more favorably than other students or fellows

Even if the faculty member is not involved in the student or fellow’s program, he/ she could still put pressure (or be perceived to put pressure) on the student or fellow to alter his or her academic program in favor of increasing the chances of success of the start-up. This is because of the inherently unequal power relationship between faculty and student, which exists even if the faculty member is not in a position to evaluate the student or influence the student’s academic program.   Similar circumstances may arise for academic staff, other teaching staff or those who have instruction or advising roles for the student.

I understand how a faculty member who supervises or directly teaches a student is in a significant conflict of interest situation, but why should a faculty member who has nothing to do with the student’s academic program be advised to give careful consideration before investing in his/her company?

As noted above, the inherently unequal power relationship between faculty and student at a university exists even if the faculty member is not in a position to evaluate the student or influence the student’s academic program. A faculty member’s influence and authority are grounded in the role of educator per se and extend far beyond the classroom or laboratory.  For example, a student may perceive, rightly or wrongly, that a prominent faculty member has influence over decisions regarding students’ academic progress, access to lab space or funding for research.  The role of educator must always take precedence for faculty members or others who are directly involved in instruction or advising of the student.