1. HEADING GOES HERE IN RED UNIVERS CONDENSED BOLD ALL CAPS

2. AVOIDING CONFLICT IN FACULTY CONSULTING Judith L. Curry Associate General Counsel NC State University December 2, 2011

3. Board of Governors Policy Board of Governors Conflict of Interest/Commitment Policy: –“Participation of EPA employees in….consulting, is an important characteristic of academic employment that often leads to significant societal benefits, including economic development through technology transfer.”

4. Board of Governors Policy “However, such external professional activities for pay are to be undertaken only if they do not –Create a conflict of commitment –Create a conflict of interest –Involve inappropriate use or exploitation of University resources…”

5. NCSU Regulations and Policies NC State Conflicts of Interest and Commitment Regulation [REG01.25.01]REG01.25.01 Patent and Tangible Research Policy [POL10.00.01]POL10.00.01

6. Consulting Must be Reported and Approved In Advance Must be reported at least 10 days in advance [NOI] Department Head Approval May require update of COI report

7. Conflicts of Interest An employee has a conflict of interest when: –Significant Financial Interest –Affects or appears to affect –Objectivity in conduct of University duties

8. Example: Consulting for a company with regard to the same subject matter for which he/she acts as principal investigator under a research agreement sponsored by company Also may violate N.C.G.S. 14-234(a)(1) which prohibits public employees from deriving a direct benefit from public contracts

9. Testing and Services Agreement Project Coordinator certifies: –No research component –NOT WORKING AS CONSULTANT –WILL NOT IN FUTURE CONSULT FOR PURPOSE OF ANALYZING DATA

10. Use of University Space and Equipment Generally not permitted in connection with consulting Inappropriate use or exploitation of University resources means using any services, facilities, equipment, supplies or personnel which members of the general public may not freely use. BOG Policy 300.2.2 Conflict of Interest and CommitmentBOG Policy 300.2.2 Conflict of Interest and Commitment

11. Conflicts of Commitment Consulting which involves time commitment that interferes with employee’s accomplishing university duties

12. Consulting and the Patent Policy Article 6, Patent and Tangible Research Policy Assignment to University –University administered funds –Scope of Employment –Substantial Use of University resources

13. Scope of Employment North Carolina Law: Employer may require assignment unless the invention does not relate to the employer’s business or actual or demonstrably anticipated research or development N.C.G.S. 66-57.1

14. Inventions Made with Substantial Use of University Resources Resources that would not be available to unaffiliated person Exceptions –Minimal office use –Library –Personal Computer

15. Key Terms in Industry Consulting Agreements Confidential Information/Data Protection Intellectual Property Ownership Liability Indemnity Choice of Law/Forum Non-Compete

16. Stanford v Roche Board of Trustees of the Leland Stanford Junior University v Roche Molecular Systems, Inc., 131 S.Ct. 2188, 180 L.Ed.2d 1 (June 6, 2011)

17. How Can I Avoid Conflict Between My Consulting and University Policies? Report NOI/COI Provide copy of University Patent Policy to company Include language establishing priority of University obligation ( http://www.ncsu.edu/general_counsel/legal_topics/consulting- faqs.php ) http://www.ncsu.edu/general_counsel/legal_topics/consulting- faqs.php Define narrowly and precisely the subject matter of consultancy

18. What Are The Legal Risks To Me Personally In Engaging In Consulting? Damages for Breach of Contract Indemnification requirement Liability for misappropriation of state property (intellectual property) Liability for non-disclosure of conflicts –False Claims Act (31 U.S.C. 3729 et seq.)

19. How Can I Minimize The Risk Of Liability For My Consulting? Consult personal legal counsel and obtain review of contract Obtain errors and omissions insurance Seek guidance from Office of General Counsel if questions about University policies Seek guidance from SPARCS/OTT