COI Guidance for Faculty and Students involved in Start-ups

1. General Considerations and Requirements for Faculty involved in Start-ups

2. General Considerations Related to Undergraduate, Graduate, Medical Students, and Postdocs Who Want to Become Involved in a Start-up Venture Based on University Research

3. Considerations for Start-up Ventures Involving Faculty and Students

4. Consideration for Faculty Who are Engaged in Start-up Ventures with Another Faculty Member or Staff

5. Use of Funding or In-Kind Resources From a Start-up Venture in Brown Research

6. Contacts

7. Additional Resources, Policies, and Contacts

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Are you thinking about starting a company based on your Brown University research? Or are you interested in investing or becoming involved in a company owned by a Brown faculty member or student?

Brown encourages and supports the efforts of its faculty and other research personnel to participate in the development and commercialization of Brown intellectual property generated from Brown research. New products and services derived from Brown research further the impact of the University and its mission. For junior faculty, postdocs and graduate students, exposure to start-ups provides experiences outside of the traditional academic track. Pursuant to the University patent and invention policy, inventors, labs, departments, and schools can also share in financial returns from successful commercialization.

Commercialization and start-up activities however may prompt financial and professional conflict of interest and conflict of commitment considerations. The University seeks to identify and appropriately manage any actual or perceived conflicts of interest or commitment that could arise from these activities to ensure the integrity of the research process, allow for the unbiased and effective development of University IP, ensure the appropriate use of University resources, and protect students’ and trainees’ ability to pursue their studies and research activities with appropriate independence and objectivity.

This Guidance document is intended to assist Brown faculty and students with establishing the appropriate level of involvement in start-ups and help comply with all applicable Brown policies and minimize potential conflicts of interest and commitment.

Brown faculty and students can utilize these guidelines to effectively manage their start-up activities or other corporate involvements, and to keep them sufficiently separate from their Brown academic and research activities.

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1. General Considerations and Requirements for Faculty involved in Start-ups

1.1 - General Principles | 1.2 - Prohibited Activities

Forming a start-up or becoming involved in a start-up company is generally considered an outside activity, subject to Brown’s Policy on Outside Professional Activities for Faculty, and not part of a faculty member’s academic appointment. Moreover, start-up ventures are generally entities that are not affiliated with, or controlled by, Brown University.

1.1 - General Principles

Given that involvement in a start-up is considered an outside activity, it is important that faculty:

Separate and clearly distinguish the focus of ongoing University research and educational responsibilities from involvement in the start-up venture.
Ensure that time spent on behalf of the start-up is appropriate and in accordance with Brown’s Policy on Outside Professional Activities for Faculty. This can include taking an unpaid leave of absence if serving in a company management role, and if the effort with the start-up will exceed that allowable for faculty, or otherwise preclude the faculty from meeting their job responsibilities.
Follow all applicable Brown policies, including but not limited to Brown University’s Use of Name Policy, regarding the use of Brown’s name and marks in the start-up venture.
Report any financial interest (e.g., ownership interest, stock or stock options) to the University on COI Reporting forms, as required by the University’s Conflict of Interest policy.
Comply with Brown University’s COI in Research policy. Particular attention should be paid to presumptively prohibited activities and rules pertaining to the receipt of sponsored research funding from the start-up, as well as SBIR/STTR grants (if applicable). Specifically, Brown’s COI in Research Policy presumptively prohibits the following:
- Faculty who have a significant financial interest in a company, including an equity interest, are presumptively prohibited from receiving sponsored research funding from the company.
- Faculty are presumptively prohibited from engaging in human subjects research that is funded by, or involves products/IP of, the company.
Be familiar with the Patent and Invention Policy for Brown, which governs intellectual property for all Brown faculty, staff and students.

1.2 Prohibited Activities

To separate their start-up ventures and/or other outside activities from University activities, faculty may not:

Negotiate with the University on behalf of the start-up company.
Direct or authorize any Brown University business transaction involving the start-up company.
Involve start-up company personnel in Brown research without approval, which may include an appropriate subcontract.
Involve Brown personnel, including students, in start-up company activities without approval from the Vice President for Research (section 3.7.5 COI in Research Policy.)
Use Brown facilities and equipment for the performance of company business or research, except as permitted under separate written agreements, such as Facilities Use Agreements or Sponsored Research Agreements, with Brown University.
Use University services, its tax exempt status, or University purchasing discounts for start-up company purposes. Faculty may make incidental use of the faculty/staff member’s office and office software; however faculty cannot use University space or resources to conduct start-up company business. Faculty may use those facilities that are available to all commercial or industrial users on the same basis and with the same fee structure, provided they have obtained a Facilities Use Agreement from the University. Any exceptions must be approved in writing by the Vice President for Research and the Dean of the School in which the resources are located.
Grant start-up company employees or agents any type of appointment, including but not limited to Visiting, Courtesy, Adjunct appointments, or any other privileges at Brown. Any petition for an exception must be made in writing by the hosting faculty member to the Vice President for Research.

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2. General Considerations Related to Undergraduate, Graduate, Medical Students, and Postdocs Who Want to Become Involved in a Start-up Venture Based on University Research

2.1 - General Principles | 2.2 - Prohibited Activities

Students and postdocs often desire to pursue commercialization of their research work in startup companies. The key principle governing how to do this is that of maintaining the academic interests of the student/postdoc. Forming a start-up or becoming involved in a start-up company is generally considered an outside activity and not part of a student’s or trainee’s educational responsibilities or requirements. Moreover, start-up ventures are generally entities that are neither affiliated with nor controlled by Brown University. Therefore, students and trainees who set up or become involved in a start-up venture must adhere to the general principles outlined below. Additionally, students and trainees must receive approval for this outside activity from their program directors as well as the Dean of College, the Graduate School, or the Office of Postdoctoral Affairs, as applicable.

2.1 - General Principles

Given that involvement in a start-up is considered an outside activity, it is important that students and postdocs:

Separate and clearly distinguish the focus of ongoing University research and educational work from involvement in the start-up venture.
Ensure that time spent on behalf of the start-up is appropriate and allowable per the Graduate School’s policies and/or Office of Postdoctoral Affairs policies. Students and postdocs will need approval from their program director for this outside activity.
Follow all applicable Brown policies, including but not limited to Brown University’s Use of Name Policy, regarding the use of Brown’s name and marks in the start-up venture.
Report any financial interest (e.g., ownership interest, stock or stock options) to the University on COI Reporting forms, as required by the University’s Conflict of Interest policy.

Comply with Brown University’s COI in Research policy. Particular attention should be paid to presumptively prohibited activities and rules pertaining to the receipt of sponsored research funding from the start-up, as well as SBIR/STTR grants (if applicable). Specifically, Brown’s COI in Research Policy presumptively prohibits the following:
- Brown personnel who have a significant financial interest in a company, including an equity interest, are presumptively prohibited from receiving sponsored research funding from the company.
- Brown personnel are presumptively prohibited from engaging in human subjects research that is funded by, or involves products/IP of, the company.
Be familiar with the Patent and Invention Policy for Brown, which governs intellectual property for all Brown faculty, staff and students.

2.2 Prohibited Activities

To separate their start-up ventures and/or other outside activities from University activities, students and postdocs may not:

Negotiate with the University on behalf of the start-up company.
Direct or authorize any Brown University business transaction involving the start-up company.
Involve start-up company personnel in Brown research without approval, which may include an appropriate subcontract.
Become involved in start-up company activities with their supervisor, advisor, or mentor without approval from the Vice President for Research (section 3.7.5 COI in Research Policy.)
Use Brown facilities and equipment for the performance of company business or research, except as permitted under separate written agreements, such as Facilities Use Agreements or Sponsored Research Agreements, with Brown University.
Use University services, its tax exempt status, or University purchasing discounts for start-up company purposes. Students and postdocs may make incidental use of the their Brown space and office software; however students and postdocs cannot use University space or resources to conduct start-up company business, unless it is space that is specifically approved for such business activities (e.g., Nelson Center for Entrepreneurship). In addition, students and postdocs may use those facilities that are available to all commercial or industrial users on the same basis and with the same fee structure, provided they have obtained a Facilities Use Agreement from the University. Any exceptions must be approved in writing by the Vice President for Research and the Dean of the School in which the resources are located.

Grant start-up company employees or agents any type of appointment, including but not limited to Visiting, Courtesy, Adjunct appointments, or any other privileges at Brown. Any petition for an exception must be made in writing by the hosting faculty member to the Vice President for Research.

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3. Considerations for Start-up Ventures Involving Faculty and Students

3.1 General Guidance for faculty and student/postdoc wanting to form a joint start-up venture

Additional consideration should be given to the perception of conflict when faculty and students enter into a joint business venture. Please see policy section 3.7.5. in the University’s COI in Research Policy and policy section 3.7 in the University’s Conflict of Interest and Conflict of Commitment Policy on obtaining approval when engaging subordinates, including students or trainees, in one’s outside activity. A perceived conflict of interest may exist even if the faculty member is not in a position to directly evaluate the student or influence the student’s academic program but may participate in decisions that can affect the student (e.g., funding decisions). Similar actual or perceived conflicts of interest may arise for academic staff, Directors of Graduate Studies, teaching staff, or others who have instruction or advising roles relative to the student.

Graduate students or postdoctoral researchers (postdocs) may be co-inventors with a Brown faculty member of IP that has arisen out of their joint research program at Brown. Brown Technology Innovations (BTI) can provide guidance to researchers around inventions, intellectual property protection (such as patents or copyrights), start-up formation, licensing and financing. BTI also interacts with the Office of Research Integrity around matters of conflict of interest as related to intellectual property.

***3.1 General Guidance for* *faculty and student/postdoc wanting to form a joint start-up venture***

Faculty cannot invest in a start-up founded by a student or postdoc whom they directly supervise or evaluate. This serves to maintain the primacy of the academic needs of the student/postdoc and avoid any actual or perceived conflicts.
If faculty want to engage students or trainees whom they directly supervise in their start-up venture, they will need to receive prior approval from the Vice President for Research (section 3.7.5 COI in Research Policy.) Approval may require management or other plans to avoid conflicts and address other considerations. Plans may include appointing additional or new supervisors for the student.
Faculty may engage students or trainees whom they do not supervise or evaluate in their start-up activities provided that the students or trainee has received approval from their supervisor and program director. Such engagement must comply with all outside activities policies and cannot be detrimental to the student’s or trainee’s academic progress.
Faculty may not permit or advise a student to spend an unreasonable amount of time on either a faculty’s start-up venture or the student’s own start-up activities, rather than focusing on their academic program. Graduate students must adhere to the Graduate School’s policy limiting the amount of time a full time graduate student can spend on outside activities.
Faculty may not direct a student or postdoc’s Brown research toward a topic that might increase the potential success of the company but is contrary to, or misaligned with, the educational/academic goals of the student.
Faculty cannot treat a student or postdoc who is a co-investor in, or has another financial involvement in, a company with the faculty member more favorably than other students or postdocs.
If a student requests a leave of absence from the University to participate in a company in which a faculty member has a financial interest or managerial role, the faculty member must refer the student to the student’s department chair, the department’s Director of Graduate Studies, or to the cognizant Dean for independent advice.
Internships and externship and work experience assignments for students at the company may be possible but require approval by the Vice President for Research.
Faculty and graduate students must comply with all aspects of the Graduate School Code of Conduct.

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4. Consideration for faculty who are engaged in start-up ventures with another faculty member or staff

Faculty members engaged in start-up ventures with each other must give consideration to whether any perceived or actual COIs may arise. They must consult with their Chair and must comply with University disclosure requirements.

It is not acceptable to involve early career faculty for whom a faculty member has supervisory responsibility, or has the authority to vote on tenure or otherwise provide assessment of performance, in company activities.
A staff member or administrator who reports to or is under the supervision of a faculty member cannot be involved in activities of the faculty member’s company.

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5. Use of funding or in-kind resources from a start-up venture in Brown research

Occasionally, a start-up company with which a faculty member is involved and in which they have a financial interest may wish to sponsor research at Brown. As stated in Brown’s COI in Research Policy, there is a presumptive prohibition against an investigator’s research being sponsored by a start-up in which the investigator or an individual over which the investigator has supervisory authority has a financial interest, holds a fiduciary role, or executive level position. Such an arrangement is presumptively prohibited under Brown’s COI in Research Policy but faculty members can request an exception under the COI in Research Policy, and must receive approval before proceeding.

If the start-up company wishes to sponsor research at Brown that does not involve the faculty member as a PI, Co-PI, or Key Personnel, such arrangement may be permissible but requires prior review and appropriate agreements.

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6. Contacts

These guidelines represent current thinking on engagements with start-up ventures. Relevant policies are referenced and linked throughout this document. Utilize this guidance document to inform your decision making and actions regarding start-up ventures. Contact BTI or ORI with questions.

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7. Additional Resources, Policies, and Contacts

Guidance for Engaging in Outside Activities
Policy on Outside Professional Activities for Faculty
Brown University Conflict of Interest in Research Policy
Brown University Intellectual Property Policies
Brown University Conflict of Interest and Commitment Policy
Electronic COI Reporting
The Office of University Postdoctoral Affairs
Brown University Graduate School
Brown University Office of Research Integrity
Brown Technology Innovation
Brown University Use of Campus Space by External Third Parties