Faculty Policy on Conflict of Commitment and Interest (RPH 4.1)

Current version: December 2, 2004

Summary:

Presents and discusses circumstances which can create real or perceived conflicts of commitment and conflicts of interest for faculty. Establishes requirements for annual certifications and financial disclosures.

This statement, approved on April 14, 1994, and modified on December 2, 2004, by the Senate of the Academic Council, contains Stanford's policy and procedures regarding conflict of commitment and conflict of interest as they apply to all members of the Stanford faculty (Academic Council and Medical Center Line), including faculty members serving as University officers. School Deans are responsible for ensuring implementation of this policy. The Vice Provost and Dean of Research is responsible for interpretation and overall coordination of the policy. Violation of any part of this Policy may cause a faculty member to be subject to sanctions as described in the Statement on Faculty Discipline. This policy will be modified as necessary to be in compliance with external agencies.

GENERAL PRINCIPLES

Conflict of Commitment:

Stanford faculty members owe their primary professional allegiance to the University, and their primary commitment of time and intellectual energies should be to the education, research and scholarship programs of the institution. The specific responsibilities and professional activities that constitute an appropriate and primary commitment will differ across schools and departments, but they should be based on a general understanding between the faculty member and his or her department chair and school dean.

Even with such understandings in place, however, attempts of faculty to balance University responsibilities with external activities - such as consulting, public service or pro bono work - can result in conflicts regarding allocation of time and energies. Conflicts of commitment usually involve issues of time allocation. Whenever an individual's outside consulting activities (as defined in Stanford's policy on outside consulting) exceed the permitted limits (normally thirteen days per quarter), or whenever a full-time faculty member's primary professional loyalty is not to Stanford, a conflict of commitment exists.

Conflict of Interest:

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 gain, financial or otherwise. A conflict of interest depends on the situation, and not on the character or actions of the individual.

Conflicts of interest are common and practically unavoidable in a modern research university. At Stanford, conflicts of interest can arise out of the fact that a mission of the University is to promote public good by fostering the transfer of knowledge gained through University research and scholarship to the private sector. Two important means of accomplishing this mission include faculty consulting and the commercialization of technologies derived from faculty research. It is appropriate that faculty be rewarded for their participation in these activities through consulting fees and sharing in royalties resulting from the commercialization of their work. It is wrong, however, for an individual's actions or decisions made in the course of his or her University activities to be determined by considerations of personal financial gain. Such behavior calls into question the professional objectivity and ethics of the individual, and it also reflects negatively on the University. Stanford University is an institution of public trust; faculty must respect that status and conduct their affairs in ways that will not compromise the integrity of the University.

Faculty members should conduct their affairs so as to avoid or minimize conflicts of interest, and must respond appropriately when conflicts of interest arise. To that end, the purposes of this policy are to educate faculty about situations that generate conflicts of interest, to provide means for faculty and the University to manage conflicts of interest, to promote the best interests of students and others whose work depends on faculty direction, and to describe situations that are prohibited. Every Stanford faculty member has an obligation to become familiar with, and abide by, the provisions of this policy. If a situation raising questions of conflict of commitment or interest arises, faculty are urged to discuss the situation with the department chair, school dean, or the Vice Provost and Dean of Research ("Dean of Research").

SUMMARY

Below is a summary of the key provisions of this Policy. Faculty are urged to read the document in its entirety to fully understand the spirit of these provisions, the bona fide exceptions, and requirements for compliance. [ Links in these summary statements connect with more detailed discussion on each point. ]

Faculty must maintain a significant physical presence on campus (main or overseas) throughout each quarter they are on active duty.
Faculty must not allow other professional activities to detract from their primary allegiance to Stanford. For example, a faculty member on full-time active duty must not have significant outside managerial responsibilities nor act as a principal investigator on sponsored projects that could be conducted at Stanford University but instead are submitted and managed through another institution.
Faculty must foster an atmosphere of academic freedom by promoting the open and timely exchange of results of scholarly activities, ensuring that their advising of students and postdoctoral scholars is independent of personal commercial interests, and informing students and colleagues about outside obligations that might influence the free exchange of scholarly information between them and the faculty member.
Faculty may not use University resources, including facilities, personnel, equipment, or confidential information, except in a purely incidental way, as part of their outside consulting activities or for any other purposes that are unrelated to the education, research, scholarship, and public service missions of the University.
Faculty must disclose on a timely basis the creation or discovery of all potentially patentable inventions created or discovered in the course of their University activities or with more than incidental use of University resources. Ownership of such inventions must be assigned to the University regardless of source of funding. The inventor will share in royalties earned.
Faculty must disclose to the University whether they (or members of the immediate family, as defined below) have consulting or employment relationships with, and/or significant financial interests (also defined below), in an outside entity before the University will approve the following proposed arrangements involving them between such entities and Stanford: a) gifts; b) sponsored projects; c) technology licensing arrangements; and d) certain procurements. In such cases, approval by the school dean will be required prior to entering into each proposed arrangement.
In situations in which the objectivity of a faculty member could reasonably be questioned, the dean of a school may establish an independent oversight committee to take steps including (but not limited to) the following: to review the appropriateness of the proposed research to be conducted at Stanford, to oversee the conduct of the research, and to ensure open and timely dissemination of the research results. Such oversight committees will be required for all clinical trials raising questions of conflict of interest.
On an annual basis all faculty members must certify to their school deans their compliance with Stanford's policies related to conflict of interest and commitment. They must also disclose information about their (and their immediate family members', as described below) financial relationships with outside organizations that are sponsors of their teaching or research programs or are otherwise involved in current, proposed or pending financial relationships with the University that involve the faculty member. In addition, faculty must disclose to their school dean on an ad hoc basis current, proposed or pending situations that may raise questions of conflict of commitment or interest, as soon as such situations become known to the faculty member.
School deans shall establish procedures to ensure timely review of their faculty's annual and ad hoc disclosures of potential or apparent conflicts, and to ensure (in consultation with the Dean of Research office) the appropriate management of such conflicts. Such procedures may involve representatives from the school's faculty as part of a reviewing body. School deans will file their own annual disclosures and certifications of compliance with the Dean of Research.
The Dean of Research shall approve each school dean's plans for implementing this policy, interpret policy provisions in consultation with school deans, respond to faculty wishing to appeal school deans' decisions, and report to the Committee on Research annually on the status of this policy and its implementation.
Should a faculty member wish to appeal a decision made by the Dean of Research, he or she may present the appeal to the Provost, who will consider the case in consultation with the Advisory Board.

DISCUSSION AND DETAIL

PRESENCE ON CAMPUS:

Appointment as a faculty member of Stanford University confers the privilege and obligation to pursue teaching, research, scholarship, and clinical care (whichever are appropriate to the position held). In addition, Academic Council members are expected to participate in University governance, in the formulation of academic policy, and in the determination of the intellectual directions and academic priorities of the University. Fulfillment of these obligations requires a primary commitment of expertise, time, and energy.

A full-time appointment conveys an obligation for a faculty member to have a significant physical presence on campus (main or overseas), to be accessible to students and staff, and to be available to interact with Stanford colleagues throughout every quarter during which he or she is on active duty, unless the department chair and/or school dean has granted specific prior approval for extended or frequent absences from campus. Because requirements for field research and other reasons for absence from campus differ across the University, schools and departments should define for their faculties what qualifies as inappropriate, extended or frequent absences.
LIMITATIONS ON OUTSIDE PROFESSIONAL ACTIVITIES:

Stanford encourages faculty to become involved in the transfer of knowledge from the University laboratory into the commercial marketplace. It is an appropriate role for the University to facilitate the transfer of the knowledge gained through academic research to applications that can benefit the general population. Moreover, experience gained by faculty in the course of outside professional activities can enhance their teaching and research or scholarship within the University. But the process of technology transfer can create the potential for conflicts of commitment and/or interest, particularly when there is opportunity for personal gain on the part of the faculty. The intent of this provision of the policy is to minimize these conflicts and provide means of managing them when they arise.

An implicit assumption underlying the University's Policy on Outside Consulting Activities by Members of the Academic Council is that such outside professional activities are a privilege and not a right and must not detract from a faculty member's full-time obligation to his or her University duties. When any outside activity detracts from the conduct of University duties, a conflict of commitment will result. Even activities such as pro bono work, government service in the public interest, and any outside employment unrelated to the faculty member's University responsibilities (therefore not included as "consulting" in the policy on outside consulting), should be managed so they do not take precedence over a faculty member's primary commitment to the University.

Outside professional activities can also generate conflicts of interest regardless of the time involved. For example, direction of a program of research or scholarship at another institution that could be conducted appropriately at Stanford as part of the faculty member's normal duties can deprive Stanford students and colleagues of the benefits of the faculty member's primary intellectual energies. Another example is submitting research proposals through channels other than Stanford to support work that could be performed at Stanford. First, the use of Stanford resources in the course of that work is practically unavoidable. Second, it becomes difficult, if not impossible, for the University to review and reward the contributions of Stanford faculty, staff, and students for work managed and/or conducted elsewhere. Third, the action can result in situations that place students and staff in conflicts of interest. For these reasons Stanford faculty members on active duty normally are prohibited from serving as principal investigators on sponsored projects submitted and managed through other institutions. This stipulation is not intended to limit faculty from participating in multi-site training or research programs. Nor is it intended to apply to circumstances in which the faculty member's research requires access to facilities not available at Stanford.

Significant management roles (those that involve supervision of the work of others and/or day-to-day responsibility for operating decisions) in private business typically are demanding both in terms of time and energy. It is unlikely that such roles can be fulfilled by the manager working only 13 days per quarter, the maximum time permitted for full-time faculty to engage in outside consulting activities. Because full-time faculty are expected to devote their primary energies and professional interests to their University obligations, they may not accept significant managerial responsibilities as part of their outside consulting activities. Normally it will be necessary for faculty to take a full leave of absence from their University responsibilities in order to take on a significant management role in an outside entity; doing so while on sabbatical is not appropriate.

Whenever faculty members are involved in research as part of their outside consulting or business activities, they must establish clear boundaries that separate their University and outside obligations, so as to avoid questions about their appropriate use of resources and attributions of products of their work.
FREE AND OPEN EXCHANGE OF RESEARCH RESULTS:

The integrity of the University as a community of scholars requires the free and open exchange of ideas and the results of scholarly activities. Faculty are obligated to maintain an atmosphere free from unwarranted external influences. Students and collaborators must be able to pursue topics of interest, have access to available information and facilities, and be able to communicate the results of their work to other scholars and the public. Therefore, faculty must ensure that:
1. the results of research or scholarship undertaken at Stanford are disseminated on an open and timely basis to the broader scholarly community and public in keeping with Stanford's Openness in Research Policy;
2. the academic activities of students and postdoctoral scholars are free from the personal commercial interests of the faculty member; and
3. the work of students, staff, postdoctoral scholars and collaborators is not exploited in the course of a faculty member's outside obligations. To this end, faculty members should be open about their involvements with and obligations to outside third parties who could benefit from the work or ideas of their students, staff, and colleagues. Similarly, students, associates, and staff should have access to information about the sources of funds that support their research.
APPROPRIATE USE OF UNIVERSITY RESOURCES, INCLUDING FACILITIES, PERSONNEL, EQUIPMENT, AND INFORMATION:

Faculty may not use University resources, including facilities, personnel, equipment, or confidential information, except in a purely incidental way as part of their outside consulting activities or for any other non-University purposes. Inappropriate use of University resources includes the following:
1. Assigning the faculty member's students, staff or postdoctoral scholars University tasks for purposes of potential or real financial gain of the faculty member rather than the advancement of the scholarly field or the students' educational needs.
2. Involvement of the faculty member's students or staff in his or her outside consulting or business activities without prior approval of the department chair or school dean.
3. Granting access to external entities to Stanford resources or services for purposes outside the University's missions, or offering inappropriate favors to outside entities in an attempt to unduly influence them in their dealings with the University.
4. Using for personal gain, or granting unauthorized access to others, of confidential information acquired through conduct of University business or research activities. Confidential information includes, but is not limited to, medical, personnel, or security records of individuals; proprietary knowledge about corporate anticipated material requirements or price actions; and proprietary knowledge of possible new sites for government operations or information about forthcoming programs or selection of contractors or subcontractors in advance of official announcements.
5. Providing preferential access to research results, materials or products generated from University teaching or research activities to an outside entity for personal financial gain. (This would not preclude appropriate licensing arrangements for inventions, or consulting on the basis of sponsored project results where there is significant additional work or expertise involved.)
DISCLOSURE AND OWNERSHIP OF INTELLECTUAL PROPERTY:
Stanford wishes to encourage faculty members to be involved in technology transfer as part of their University duties without raising questions as to their motives. However, faculty ownership of inventions created in the course of their University activities or with more than incidental use of University resources creates conflicts of interest. First, most research and scholarly work conducted at Stanford has been supported directly and indirectly by numerous sources with which the University has entered into contractual agreements. It is the responsibility of the University to honor the terms of those contracts regarding commercialization of results of the work they sponsored. For faculty members to decide ownership of intellectual property based on source of support when they stand to gain financially from such decisions constitutes a serious conflict of interest. Second, for faculty members to claim ownership of an invention resulting from their University activities calls into question whether they are using University resources for personal financial gain. Third, the opportunity for a faculty member to assume ownership of an invention and then grant exclusive access to it to a sponsor or potential sponsor of his or her university research creates an incentive for inappropriate relationships. Faculty are expected to exercise scientific objectivity in the conduct of research and guidance of students and associates. To the extent that the financial interests of a faculty member and a corporate sponsor become intermingled, the scientific objectivity of the faculty member can be called into question.

To manage and minimize conflict over intellectual property rights, all potentially patentable inventions created or discovered by faculty in the course of their University activities, or with use of University resources, must be disclosed to the University on a timely basis. Ownership of these inventions must be assigned to the University regardless of source of funding. Institutional management of the commercialization of technologies developed using University resources guarantees that contractual obligations to sponsors are fulfilled. Stanford management of technology also reduces the potential for individual conflicts of interest, since the institutional managers of the assets do not have personal financial interests in the outcomes of licensing processes nor do they participate in making academic or future research decisions.

In this context, "invention" includes tangible research property. The term does not, however, include books, scholarly articles, musical and artistic works, and other forms of educational media, title to which remains with the creator. In accord with academic tradition, except to the extent required by the terms of funding agreements, Stanford does not claim ownership to pedagogical, scholarly, or artistic works, regardless of their form of expression. Such works may represent the personal or scholarly beliefs of the author. The protection of academic freedom of the faculty requires that the University not attempt, nor have the right, to control the content or distribution of such works. An additional consideration is that the University does not wish to accept liability for a faculty member's works that are individual forms of expression.

Ownership of computer software requires special consideration. Some forms of software are patentable, and thus must be assigned to the University. Other forms of software are more like books in that they are digital expressions of scholarly, artistic, or educational works, in which case title rests with the creator. Rights to software that is not patentable rest with the individual faculty creator except in the following circumstances: the work is supported by a direct allocation of funds through the University for the pursuit of a specific project, is commissioned by the University, or is otherwise subject to contractual obligations. Title to software created jointly with students or other faculty shall be jointly owned by the creators. Title to software created jointly by faculty and University staff members will be jointly owned between the faculty creator and the University. Faculty must be aware, however, that the creation, upgrade, or maintenance of commercializable software, when done as part of a faculty member's University activities, can lead to the same types of conflicts of commitment and interest as patentable inventions. It is the responsibility of the faculty member to avoid such conflicts. One way of doing so is to voluntarily assign copyright and licensing authority to the University.

This policy is not intended to go beyond any contractual obligations to restrict the creator of a technology from placing his or her creation in the public domain if he or she believes that would be in the best interest of technology transfer, unless such an action is restricted by contractual obligations. Also, this policy is not intended to slow or restrict the transfer of technology, so if the University does not proceed in a timely manner (e.g., sixty days) to patent a technology and/or license it, the ownership may be reassigned to the creator at his or her request if permitted by contractual obligations. In those cases where the sponsor requires the University to take title, the University may recommend to the sponsor that ownership be assigned to the inventor.

When the University is successful in the licensing of a technology created by a faculty member, he or she will share in the royalties earned under the terms of the applicable University policy.
FACULTY INVOLVEMENT IN TRANSACTIONS BETWEEN OUTSIDE ENTITIES AND STANFORD:

Faculty involvement in gifts, sponsored projects, technology licensing or certain procurement arrangements between Stanford and an outside entity, where the involved faculty member (or members of the immediate family, which includes the faculty member's spouse or dependent children as determined by the Internal Revenue Service, or a domestic partner) has any consulting or employment relationships with, and/or significant financial interests in, that entity, raises particular questions of potential or apparent conflicts of interest; such situations require special ad hoc disclosures, review and approval.

For this purpose, "significant financial interests" in an entity means:
- any current or pending ownership interests (including shares, partnership stake, or derivative interests such as stock options) in a privately-held entity (e.g., in a "start up" company);
- any current or pending ownership interests (including shares, partnership stake, or derivative interests such as stock options) in a publicly-traded entity, amounting to at least one-half percent (0.5%) of that entity's equity or at least $10,000 in ownership interests (except when the ownership interest is managed by a third party such as a mutual fund); or
- any income amounting to at least $10,000 per year (other than from employment, consulting, or ownership interests as covered above) -- including for example honoraria, licensing or royalty income.
NOTE: Where the faculty member is participating in research involving human subjects, and has any financial interest in the sponsor (or a member of the immediate family has such an interest), that interest must be disclosed on an ad hoc basis, regardless of its value (see Section 7, below).

Additionally, faculty members seeking funding from an external sponsor must ensure compliance with that sponsor's disclosure requirements.

Prior to the University entering into any of the following arrangements, the involved faculty member must submit to the school dean a complete written disclosure of his or her (or his or her immediate family member's) consulting or employment relationship with, and/or significant financial interest in the outside entity, the nature of the proposed transaction, and the means by which the faculty member will ensure separation of his or her University role from the faculty member's (or family members, as described above) role or interests in the company:
1. gifts to Stanford of cash or property which will be under the control, or will directly support the teaching or research activities of a faculty member from an entity in which that faculty member (or members of the immediate family as described above) has a consulting or employment relationship with, and/or significant financial interests (as defined above) in;
2. sponsored project proposals in which any of the involved investigators (or members of their immediate families as described above) have a consulting or employment relationship with, and/or significant financial interests in (or, in the case of research involving human subjects, ANY financial interest in) the proposed sponsor, or with proposed subcontractors, vendors, or collaborators;
3. University technology licensing arrangements with companies for which the faculty inventor (or members of the immediate family as described above) has a consulting or employment relationship with, and/or significant financial interests in; and
4. sole-source procurement of materials or services from an outside entity, or procurements involving a privately-held entity where the faculty member involved in the procurement (or members of the immediate family as described above) has a consulting or employment relationship with, and/or significant financial interests in, the proposed supplier.
Common sense must prevail in the interpretation of these provisions. That is -- no matter what dollar amounts are involved -- if an independent observer might reasonably question whether the individual's professional actions or decisions are determined by considerations of personal gain, the relationship should be disclosed and approval sought for the proposed transaction.

When such proposed arrangements are disclosed, the school dean shall, in consultation with the Dean of Research office, determine an appropriate resolution for the situation. Either the school dean or the Dean of Research may convene an ad hoc committee to advise him or her on any such proposed arrangements. The committees may include other members of the faculty and/or individuals not otherwise affiliated with Stanford, as long as none of them has vested interests in the outcome of the proposed arrangements.
SITUATIONS RAISING QUESTIONS OF SCIENTIFIC OBJECTIVITY:
In cases where the University has approved arrangements as described in Section 6 above, or in Clinical Technology Assessment Agreements (clinical trials) in which the investigators have any personal financial interests (including consulting or employment relationships), the scientific objectivity of the faculty member's activities may be questioned by reasonable people. To address these situations, oversight committees may be established by the school dean to take steps including (but not limited to) the following: to review the appropriateness of the proposed activity, to monitor the conduct of the activity (including use of students and postdoctoral scholars), and to ensure open and timely dissemination of the research results.

Clinical trials and other research involving human subjects raise particularly sensitive issues in those cases where the investigator has any personal financial interests -- no matter what dollar amounts are involved -- in the outcomes and these financial interests must therefore be disclosed to the school dean. The demand for therapeutics requires that new agents be developed and tested. The processes that must be followed in the testing and development of therapeutics raise an inherently contradictory situation for faculty, since frequently the inventors of therapies or medical devices are those who do research on the disease in question, are the leaders in the field, and are the most qualified to carry out pre-clinical and clinical testing. Also, the most qualified laboratories and individuals to conduct trials may receive, or be candidates to receive, research support from the external organization. In neither case could the faculty member be disinterested with respect to the outcome of the trials.

Therefore, the faculty member (and the school dean to whom the disclosure is made) must take appropriate steps to guarantee objective evaluation of the agent or device, especially for advanced clinical trials (FDA phase II and phase III). Testing might involve other members of the department or division, but if the faculty member is a department chair or division chief, the referral for testing the therapy/device to another faculty member (particularly to a junior faculty member) may carry implied coercion. Integrity should be protected by an independent oversight group for evaluation and monitoring of the research (e.g., to an ad hoc committee appointment by the school dean) whenever:
1. a faculty member is involved in clinical trials of his or her inventions;
2. a company licensed to use a faculty member's invention is sponsoring the trial;
3. there may exist a reason to question a faculty member's objectivity;
4. the outcome of the trial could be seen as influencing existing or potential research support
5. such testing is referred to other members of the faculty member's department or division.
Under appropriate circumstances, the University may require that the investigator either divest any financial interest or not perform the work at Stanford.
CERTIFICATION OF COMPLIANCE:
On an annual basis all faculty members must certify to their school deans their compliance with Stanford's policies related to conflict of interest and commitment. Faculty members must disclose information about their (and their immediate family members') interests in outside entities that are sponsors of their teaching or research programs, or that are otherwise involved in current, proposed or pending transactions with the university in which they are involved. Faculty members must also disclose on an ad hoc basis other arrangements with outside entities with which they are involved as described above in Sections 6 and 7. In addition, faculty must disclose if they have served as principal investigators or managers of outside research or business activities in their professional fields, or if they have involved their students or staff in their outside consulting or business activities. Faculty members supply this information for confidential review by the University and for such other purposes as are required by law, contract or regulation; in schools where the established review mechanism includes the department chair and/or a faculty committee, faculty members may request that the certification and disclosures be reviewed by the school dean instead.

An electronic "disclosure and certification form" is available online at http://coi.stanford.edu. Individual schools of the University may request additional information, but not less than that requested on the electronic form.

In addition, faculty members must disclose to their school dean (with a copy to the department chair) on an ad hoc basis current, proposed or pending situations that may raise questions of conflict of commitment or interest, as soon as such situations become known to the faculty member.
RESPONSIBILITIES OF THE SCHOOL DEANS:

Each school dean is responsible for the timely collection and review of annual certifications as well as ad hoc disclosures, and (in consultation with the Dean of Research office) for the management of conflict situations that arise. The dean should use his or her discretion and knowledge of local conditions to set up a system that works well for the school. Each school's plans for distribution, receipt, processing, and review of disclosure forms shall be submitted to and approved by the Dean of Research. The review process in each school may be assigned to a Senior Associate Dean and/or to a faculty review committee. However, if for reasons of confidentiality, a faculty member wishes to have his or her disclosure reviewed personally and exclusively by the school dean, that option must be made available. Individual schools may have more, but not less, restrictive internal policies than those set forth by the University.

School deans will file their own annual disclosures and certifications of compliance with the Dean of Research.
RESPONSIBILITIES OF THE DEAN OF RESEARCH:

The Dean of Research is the University officer responsible for interpreting and overseeing implementation of and compliance with this policy. He or she is responsible for reviewing and approving each school's mechanisms for implementing this Policy, for consulting with school deans to determine appropriate strategies for managing conflict situations, and for reporting annually to the Committee on Research on the effectiveness of the policy throughout the University. In addition, the Dean of Research shall adjudicate situations in which faculty wish to appeal a decision of a school dean. The Dean of Research shall work with school deans to ensure that this policy is implemented with reasonable consistency across the University.
APPEALS OF DECISIONS MADE BY THE DEAN OF RESEARCH:

Should a faculty member wish to appeal a decision made by the Dean of Research, he or she may present the appeal to the Provost, who will consider the case in consultation with the Advisory Board.