Wright State University

Guidelines for Outside Consulting Agreements

The purpose of this document is to provide helpful advice to faculty and other university employees who have outside consulting arrangements, particularly those who also are recipients of grant and contract funding for their University research.

An outside consulting agreement is a private contract between a Wright State University employee and an outside entity under which that employee provides information or other services to the entity in exchange for compensation.

The University normally does not become involved in negotiations surrounding an employeeís private consulting agreements. When carrying out these agreements, the faculty members or employees will be acting on their own, and if appropriate, may wish to have such agreements reviewed by counsel of their own choosing.

Occasionally, the sponsor of a consulting agreement will insert provisions that purport to bind Wright State as well as the faculty member or employee. Documents containing promises that bind the University may only be executed by persons who are authorized under specific delegations of authority (such as the Director of Research and Sponsored Programs). Consequently, if the sponsor will not remove such provisions, the agreement must be referred to the Office of Research and Sponsored Programs for review.

Even though most consulting agreements are negotiated between the sponsor and the faculty member or employee without the need for official University review or approval, persons performing under consulting agreements should be aware of certain features of their University employment that could be impacted by that performance. These are summarized below.

Employee Conflict of Interest Policy

Article 22.5 of the collective bargaining agreement between WSU and AAUP states that "Bargaining Unit Faculty Members should make every effort to avoid any conflict or

appearance of conflict between outside employment activities and University responsibilities." In addition, Principal Investigators receiving grant or contract support from federal agencies have reporting and conflict management obligations under the Universityís Conflict of Interest policy. Certain consulting arrangements may qualify as a "significant financial interest" under that policy.

Immunity, Indemnification, Representation and Insurance

Because consulting is regarded as collateral to an employee or faculty memberís regular employment, persons engaged in consulting are not entitled to claim immunity from tort liability under Ohio Revised Code Section 9.86, to receive free legal representation by the Attorney General under Ohio Revised Code Section 109., or to be indemnified against certain judgments as provided in Ohio Revised Code Section 9.87. Consequently, employees and faculty members who engage in consulting activities, especially activities that require professional licensure, should consider the advisability of securing private professional and/or general liability insurance to protect against legal claims arising from those activities.

Intellectual Property

Many outside firms consult with WSU faculty for the express purpose of gaining access to the faculty memberís superior knowledge of a technical field which is of commercial interest to the company. In general, the provision of information available in the public domain by a WSU faculty member acting as a consultant does not pose a problem with respect to the faculty memberís university obligations. However, because these types of interactions frequently involve the development of intellectual property, certain safeguards are necessary.

Under WSUís Intellectual Property policy, which is incorporated into Article 20 of the collective bargaining agreement between the University and AAUP, discoveries or inventions made by WSU faculty working within the scope of his or her duties on behalf of the University, or which result from work performed at WSU, or with WSU resources, belong to the University. Although a faculty member who is serving as a consultant is normally not considered to be working within the scope of his or her duties on behalf of the University while doing consulting work, the University still retains intellectual property rights in discoveries made on University premises, or using University resources. Therefore, non-public information about a faculty memberís work or research performed on University premises, or with WSU resources, should not normally be disseminated to an outside entity as a part of a consulting relationship.

Examples:

Example 1: Professor X is retained as a consultant by a company interested in catalysts. The professor shares the results of a recent international symposium on catalysts with the company. There is no intellectual property concern.

Example 2: Professor X is retained as a consultant by a company interested in catalysts. The professor provides the company with unpublished data from her studies on the performance of catalyst Y in her WSU laboratory. If an invention results from the companyís use of that information, the professorís contribution to that invention will belong to WSU.

Example 3: Professor X is retained as a consultant by a company interested in catalysts. The company asks the professor to perform a single structural study on a purified catalyst preparation using a sophisticated imaging device at WSU. If an invention results from that study, the professorís contribution to that invention will belong to WSU.

In general, when consulting work involves, or may involve, research or investigation conducted by WSU faculty, whether off or on WSUís premises, a sponsored research agreement is preferred. Such an arrangement minimizes the potential for intellectual property conflicts between the sponsor and the University, and may result in additional benefits to the sponsor and to the faculty member. The Universityís Office of Research and Sponsored Programs administers such agreements.

Please give thoughtful consideration to the possibility that a sponsored research relationship can ultimately be more beneficial to all parties for the following reasons: 1) it allows for the utilization of intellectual resources as well as specialized laboratory equipment and facilities resident at the University, 2) it provides the possibility of royalty income to the faculty member, 3) outsourcing of research frees company resources, and 4) such activity brings in sponsored research revenue to the University.

Confidential Information

In addition to the issue of ownership of intellectual property, problems may arise when WSU faculty discuss prior sponsored research projects, or their results, during a consulting relationship. Both the nature of the research sponsored by a private company, and its results, are commonly considered to be confidential business information of the sponsoring company, particularly when prior research results are used to support patent application(s). Most sponsored research agreements contain provisions which require the University and the faculty involved with a sponsored research project to hold such information confidential except in narrowly defined circumstances (e.g. publication rights).

Example 1: Professor X is retained as a consultant by a company A, which is interested in catalysts. During the consulting arrangement, he provides the company with results of a prior study performed with funding from company B. Professor X may have exposed himself and the University to a claim from Company B that he has misused Company Bís Confidential Information. The professorís actions may also constitute a "public disclosure" which will jeopardize a patent application by WSU or company B based on the prior study.

Example 2: Professor X is retained as a consultant by a company interested in catalysts. Although the professor does not provide the company with any research findings, she mentions that she has previously studied the performance of catalyst Y under a sponsored research agreement with Company Z. Because Company Zís wishes that its interest in catalyst Y be kept secret from its competitors, the professor may have exposed herself and the University to a claim by Company Z for the misuse of Company s confidential information.

QUESTIONS

Specific questions about intellectual property matters as they may be involved in consulting agreements may be directed to the WSU Technology Manager at (937) 775-2425. More general questions arising out of consulting arrangements may be directed to the Office of General Counsel at (937) 775-2475. Although neither office is authorized to provide legal or business advice to individuals, both may be consulted for information concerning the Universityís position on the above topics.

REFERENCES

WSU intellectual property policy

WSU conflict of interest policy

WSU-AAUP agreement

Ohio Revised Code


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