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Institutional Conflict of Interest and Commercialization Joyce Brinton Director, Office for Technology and Trademark Licensing Harvard University Intellectual.

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Presentation on theme: "Institutional Conflict of Interest and Commercialization Joyce Brinton Director, Office for Technology and Trademark Licensing Harvard University Intellectual."— Presentation transcript:

1 Institutional Conflict of Interest and Commercialization Joyce Brinton Director, Office for Technology and Trademark Licensing Harvard University Intellectual Property Summer Conference for Senior University Executives July 27-28, 2001 University of Washington Seattle, Washington

2 Institutional Conflicts of Interest zWhat are they? zWhy worry about them? zWhat can we do manage them?

3 A Possible Definition? An institutional conflict of interest exists when an activity that could result in a financial benefit for the institution could, at the same time, detract from, or appear to detract from, the institution’s primary mission.

4 Mission(s) of the Modern Research University zEducation of students zAdvancing knowledge through research and scholarship zPreservation and dissemination of knowledge zProvision of clinical care (in the case of medical schools/centers) zPublic service to the community zTechnology transfer zEconomic development zCommunity enrichment through public educational and cultural activities

5 Every university has its own unique mission mix

6 Multiple Missions Lure of Corporate Research Funding Potential Technology Transfer Income  zPotential for Institutional Conflicts of Interest zLess emphasis on teaching zRestrictions on publication zReduced quality of education zDelayed/censored publications zReduced quality of clinical care Perceptions

7 Why worry? zLoss of public trust zIncreasing federal concerns zPotential legal liability

8 How to manage? That’s the big question!

9 First, you have to recognize that there is an issue. Do you need a policy?

10 Who has an Institutional Conflict of Interest Policy? Do you have other policies that address these issues?

11 Harvard does not have a specific ICOI Policy zIP Policy makes clear y“public good” takes precedence over “profit” yteaching and research come before technology transfer zWorking on “Partnerships” Policy

12 Hypothetical Situations: A way to understand Institutional Conflicts of Interest Think about: zPrimacy of Academic Mission - education and research zFreedom of Inquiry zOpen Exchange of Ideas zEducational Welfare of Students zPublic Trust

13 Hypothetical Situation 1 The university's licensee (in which the university and the inventor hold stock) is about to initiate clinical trials of a drug based on the university's technology. It is proposed that some of those trials will take place at the university's medical center - although the inventor will not be directly involved. Will the university’s equity holdings and the prospect of royalty income if the FDA approves the drug be perceived as influencing z the IRB review process?  the reliability of the results of the trials themselves? What will be the public reaction is there is an “adverse event” in the trials and a patient dies?

14 Hypothetical Situation 2 The university has licensed Professor X’s technology to a start-up company in which she is a founder and in which the university has received stock. Professor X encourages her students to work on projects that will, if successful, enhance the company’s ability to commercialize Professor X’s technology and thus the success of the company. z Is the university’s ability to judge whether these projects are in the best interest of the student compromised because it stands to gain financially if the projects are successful?

15 Hypothetical Situation 3 The university has licensed Professor A’s technology to a start up and has received stock as part of the license compensation. The company has licensed some competing technology from another university and is not currently developing Professor A’s technology. The company says it will do so in the future if the competing technology shows no advantages.  If the university does not terminate its license for default (a failure to meet development milestones), will that decision be seen as being the result of a desire protect the value of the university’s stock? z Will that view persist if there are no other viable licensees for the technology?

16 Hypothetical Situation 4 A Fortune 500 company offers the university a very large research grant to support research in the information technology field as well as funds to renovate laboratories in the computer sciences department and to endow a computer science professorship. The company is not particularly interested in patent protection, but wants inventions and computer software to be kept as trade secrets for several years – so it can further develop them in-house and thus obtain a jump on the competition. z Would such an arrangement be contrary to the university’s mission to disseminate knowledge? z Would it undermine the educational experience of students within the department?

17 Hypothetical Situation 5 The university is offered $20 million by a large pharmaceutical company in exchange for granting the company a first option to license (on an exclusive basis) any pharmaceutical invention arising from several laboratories over the next five years. The university would not be permitted to enter into sponsored research agreements with other companies that would grant those companies rights to inventions from these laboratories unless the large pharmaceutical company gave its permission. z Would such an arrangement undermine the university’s research mission? z Would such an arrangement be acceptable to the NIH?

18 Hypothetical Situation 6 Assistant Professor X and his laboratory have made many inventions over the years and several of them generate considerable income for the university. Professor X is being considered for tenure. z Will the university be influenced in its decision by the fact that Professor X is likely to make more income-producing inventions in the future?

19 Hypothetical Situation 7 Several companies are seeking exclusive licenses to an invention. One of the companies is a large donor to the university and/or its president serves on the university’s board of trustees and/or the university has invested heavily on the company’s stock.  If the university selects that company, will the decision be perceived as having been influenced by this relationship?

20 Hypothetical Situation 8 Professor A is working with a venture capitalist to set up a company that will license his invention from the university, with partial payment being made in stock. The company also wants to license Professor B’s invention but Professor B is concerned that a start-up will not be able to develop his technology as well as an established company. The venture capitalist is one with whom the university has worked well on a number of other start-ups and is a large donor to the university. z If the university decides to license Professor B’s technology to the company, will the decision be perceived as driven by the university’s desire to enhance the value of its stock and/or its desire to please a large donor?

21 Hypothetical Situations: Common Themes University has a financial interest: zStock in a company zProspect of royalties zSignificant research support from a company

22 Having a financial interest in a company Just because there is a conflict of interest  There is a conflict of interest The proposed action/activity is unethical or inappropriate But careful consideration is needed

23 zUnderstand that “apparent conflict” can damage zIdentify types of institutional conflicts of interest – real and apparent ythose that should be prohibited ythose that can be managed zRealize that all institutional conflicts cannot be eliminated zEstablish review mechanisms zDevelop management strategies zEducate decision makers zDon’t get carried away Summary

24 Some Final Thoughts Technology transfer and economic development activities can create the perception that they conflict with the university’s education, research, and knowledge dissemination missions. Without care, these activities could, in fact, damage the university’s ability to carry out its teaching, research, and knowledge dissemination missions.

25 Some Final Thoughts (cont’d) Technology transfer and economic development pose their own internal conflicts – to what extent does the potential for income generation for the university influence the institution’s decisions regarding the best way for a technology to be developed and brought to market and whether the formation of a start-up company is in the best interests of the technology and the public.


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