Policy on Research Agreements with Industry
The George Washington University encourages its researchers, as part of their efforts to generate new knowledge and ensure its use for the betterment of society, to enter into collaborative partnerships with business and industry. Such relationships can provide additional funding for their research and can help them ensure that their inventions and other research discoveries are converted into commercial products that benefit society.
As a university, our first responsibility is to ensure that the results of research are freely disseminated so that they can advance knowledge in a field and ultimately benefit society. Academic freedom is the basis for scientific progress; investigators must be free to select the projects in which they wish to participate, select the collaborators with whom they work, and freely communicate their findings to the scientific community at meetings, in publications, and by other means. At the same time, when we enter into collaborative agreements with industry, we understand the concern of industrial sponsors and partners that proprietary information that has been provided in confidence needs to be kept in confidence and that publications should not jeopardize the potential for commercializing new inventions.
Types of Research Agreements
The University encourages researchers to share their expertise and work collaboratively with both public and private entities outside the university. University-industry relationships can take a variety of forms, and the specifics of contracts and agreements will vary accordingly. Consider first private consulting by an individual faculty member and then four forms of university-industry collaboration, each with somewhat different implications for intellectual property rights ownership.
- Private Consulting. One option for faculty whose contracts allow one day a week of outside consulting is to use that day to share their expertise with companies through private consulting agreements. A private consulting agreement can allow a good deal of flexibility, but it has limitations as well. The faculty member acting as a private consultant generally should not hire students to carry out the work because of the inherent conflict of interest involved. For example, the mentor who has a private financial interest in what a student does may not be fair-minded in evaluating the student whose work falls short. Faculty acting as consultants also cannot, without the prior approval of the Vice President for Academic Affairs, make substantial use of University resources, including space, equipment, staff, and students, for private financial gain (see the 1998 Policy on Conflicts of Interest and Commitment for a full discussion).
In addition, consulting agreements generally treat any discovery made in the process of consulting as a Work Made for Hire and grant intellectual property rights and any resulting income associated with the discovery to the company that hired the consultant rather than to the University researcher. As a result, the researcher may lose the ability to develop the discovery further on his or her own or to publish information regarding the discovery.
Because private consulting agreements can sometimes work against the interests of the faculty member and the University, the University encourages faculty to bring consulting work through the University whenever possible. Then University resources can be used to support the work, and graduate and undergraduate students can benefit from involvement in the work. Moreover, the University's expertise in contract negotiation can be brought to bear to help researchers negotiate agreements with more favorable terms and avoid putting themselves or the University at legal or financial risk or losing ownership of intellectual property that is rightfully theirs.
- Independent Contractor Agreement. A PI may determine to enter into a contractual agreement with an Independent Contractor to help carry out the work proposed under his/her sponsored project award. Independent Contractors (“ICs”) have unique expertise, provide professional advice and guidance, provide a distinct service or product, typically a report, translation, analysis, or the like that is commercially available to the general public. The work is usually performed off University premises and offered to many different buyers within normal business operations. The work performed by an Independent Contractor is ancillary to GW’s sponsored project but necessary to carry out the overall objectives of GW’s sponsored award. ICs are not employees of the University and may not use GW resources to perform their services. Formerly, these agreements were called Consulting/Services Agreements. Effective July 1, 2007, GW will enter into Independent Contractor Agreements.
A PI should not confuse an Independent Contractor with a Subrecipient. A subaward is collaborative in nature whereby the subrecipient is performing an actual portion of GW’s statement of work to the prime sponsor. A subrecipient may be a co-author in a publication or may seek protection for his or her invention. Subrecipients have their performance measured against the portion of the scope of work proposed to GW and have the responsibility for programmatic decision making. The scope of work proposed by a subrecipient is generally of a research and development nature performed on a best efforts basis. The cost proposed are generally based on estimates as the outcome may be unpredictable. To enter into an Independent Contractor Agreement (ICA), please complete the Request for ICA.
- Collaborative Partnership Agreement. Collaborative partnerships are agreements in which the University and a company (or possibly a group of companies) in the same industrial sector agree to conduct research and development activities collaboratively. To illustrate, a team of University and Company researchers might enter into an agreement to invent, develop, and test a particular product with the idea that intellectual property rights will be jointly owned. Alternatively, the agreement might call for a joint program of research in a particular area and specify that ownership of any resulting intellectual property will lie with the inventor(s), whether in a particular instance it is a University researcher, Company researcher, or both. Where one company is involved, the agreement would typically grant a first option to license the invention to the company. Where more than one company joins the University in a consortium, a more complex agreement is necessary. Agreements of this sort, when they pertain to more than a single, delimited research project, must be approved according to the procedures specified in the University's policy for establishing memoranda of understanding and therefore require approval of the Vice President for Academic Affairs and, where commitments of University resources are made, approval of the Vice President and Treasurer.
- Research Agreement. In a research agreement, a company agrees to sponsor research by University researcher(s), often with the hope that the work will result in patentable discoveries and commercial products. The University is eager to encourage company sponsorship of University research and is likely to negotiate especially favorable licensing agreements with companies that have invested in the development of an invention.
Research sponsorship may be provided at various points in the research life cycle, from the time when a new line of research is just being undertaken to the point when the company has already entered into a license agreement for a University-owned intellectual property and needs the University's involvement in further research in order to bring the technology to market. Because the scientific work is done exclusively by University researchers, the intellectual property rights to any discoveries belong with the University alone.
The sponsoring company can expect, however, to be granted first option to license the intellectual property and then, if it chooses, a license with provisions appropriate to the particulars of the situation (e.g., the extent of its investment). A research agreement for industry sponsorship of research normally pertains to a particular research project or set of research activities (as opposed to a broader relationship with a company or companies, as in a Collaborative Partnership) and is handled as sponsored projects are normally handled, through the Office of the Chief Research Officer.
- Licensing Agreement. A licensing agreement is the vehicle for granting to a company the right to sell or otherwise use an intellectual property owned by the University. The agreement will be very clear regarding the field of use of the license, its exclusivity (i.e., whether the licensee has exclusive rights to market a product), its duration, and the circumstances under which it can be terminated.
It does not always make sense to patent biological material made at the University. However, even when the University has not patented a material, that material may be of commercial value to others if they would find it cheaper to buy it from the University than to develop it themselves. In such cases, the University can grant an interested company a nonexclusive license to make or use the material.
License agreements are worked out through the collaborative efforts of the Office of the Chief Research Officer and the General Counsel's Office.
Guidelines for Agreements
We offer the following guidelines to researchers and to companies wishing to partner with GW.
- Authority to Enter into Agreements. Researchers can engage in preliminary discussions with industry but they cannot speak for the University or enter into agreements on their own (with the exception of private consulting agreements). It is in their interest to follow University policy and leave the formal negotiation process and the review of proposed agreements to the appropriate University officials, as described above.
Consulting agreements and research agreements with industry, like other grants and contracts that support specific research projects, must be negotiated and approved by the Office of the Chief Research Officer. Collaborative Partnership Agreements, because they imply a broader and longer-term relationship with a company than does a specific research contract or grant and often involve the commitment of University resources must follow procedures specified by the University's policy on memoranda of understanding and be reviewed not only by the appropriate research administrator (the Office of the Chief Research Officer on the University side, the Associate Vice President for Health Research, Compliance, and Technology Transfer on the Medical Center side) but also by the Office of the General Counsel, and they must be signed by the Vice President for Academic Affairs and, where significant University resources are committed, by the Vice President and Treasurer.
- Ownership of Intellectual Property . Although exceptions may be approved in rare circumstances, the University will retain ownership of any intellectual property that results from the efforts of its researchers. However, it can transfer the property to a company through an appropriate licensing agreement and thereby grant a company the right to commercialize it.
GW's policy in this regard is entirely consistent with those of other research universities. As an educational institution, we must maintain control of discoveries made at the University so that they can continue to inform and enrich research and teaching. Often research programs are sponsored by multiple sources of funding so that giving ownership to one company is inappropriate. In addition, the Bayh-Dole act prohibits universities from transferring ownership of intellectual property to a company if federal funding has supported the work; instead it encourages transferring technologies to industry through licenses. More generally, the University has made a large investment in its faculty and research facilities and, as a result, has an interest in remaining involved as a discovery makes its way from the laboratory to the marketplace. By retaining title to patents, the University can ensure that its interests are protected. It can seek commercialization of an invention with a second company should a first company fail to keep its promises. In addition, its researchers can continue to perfect the inventions they developed. Most importantly, this arrangement, which is standard procedure at universities, creates an optimal university-industry partnership: the University offers its research resources and expertise to help convert idea to product, and the company contributes its financial support and expertise in product development and marketing.
- Publication of Findings. Agreements must protect both the researcher's responsibility to freely disseminate research findings and the company's interest in keeping certain information confidential.
The University recognizes that it has a responsibility to a commercial partner not to disseminate proprietary information that might, if released, jeopardize the company's market position. It also appreciates that a company sponsoring research will want an opportunity to review a research discovery stemming from the research it funds in order to determine whether the discovery is patentable. Agreements should specify that the investigator has an obligation to disclose discoveries to the University and the company as soon as possible, ideally before a publication is prepared. In addition, the company should be given up to 60 days in which to review draft publications and presentations in advance of their release where there is a possibility that they might disclose sensitive information or scientific discoveries. The University will agree not to disseminate proprietary information from a company or information that might constitute a public disclosure of an invention without the company's approval. In turn, the company will be expected to support the University's right to publish or otherwise disseminate results that are not proprietary and do not adversely affect the company's financial well-being.
- Licensing Agreements. A license to an intellectual property allows a company to sell or otherwise use it. Licensing agreements should strike a proper balance between a company's desire for exclusive control of a research discovery and the University's desire to ensure that discoveries are indeed developed and brought to the marketplace as products that can benefit society.
Licenses can take varied forms, and the University is willing to negotiate with individual companies to seek the fairest agreement for all, taking into account the nature of the discovery; the previous investments made by the University, the company, and other sponsors; and the investments required to develop it as a commercial product.
Some licenses will be non-exclusive, either because federal requirements demand it or because the research has had multiple sponsors. Under some circumstances, the University is willing to grant an exclusive license to a company. However, care will normally be taken to ensure that:1. the field of use specified in the license is limited to the application of commercial interest to the company (so that the researcher can continue to conduct research on other applications and develop other licensing possibilities)
Normally, licenses will obligate the company to pay or to reimburse the University for expenses associated with obtaining patents and to pay the University licensing fees and/or royalties on the sale of products. If the company and the University cannot reach agreement or the company does not wish to obtain a license, the University will be free to negotiate with other parties.
2. the company is diligent in seeking commercialization (a clause is normally inserted to allow the University to terminate the license if the company does not take the promised steps to develop or market the product)
As spelled out in the Policy on Patents and Scholarly Works and in the Copyright Policy, GW applies a formula in distributing revenue from intellectual properties to which the University has a claim. In most cases, 50% of the net income after expenses associated with patenting, marketing, licensing, protecting, or administering the intellectual property goes to the inventor(s), 20% to the inventor's department, 10% to the inventor's school, and 20% to the office of the appropriate Associate Vice President for Research.
- Indirect or Overhead. The University must recover full indirect costs (the approved federal rate for on-campus or off campus, whichever applies) for research funded by industry to develop products.
Any research conducted at the University is supported by a myriad of University resources, ranging from faculty and research laboratories and equipment to the administrative offices that process the paperwork required to undertake research. Federal cost accounting regulations require that all research projects, whether federally funded or not, be fully costed out and that the government not be charged more than other sponsors for research expenses. So-called "indirect" costs are a real cost of undertaking research activities. They must be treated as such by the University if its research missions are to be achieved without draining University resources. Viewed in the context of overhead rates in the business world, GW's indirect cost rate is very reasonable.
- Conflict of Interest. University-industry agreements must be consistent with the University's Policy on Conflicts of Interest and Commitment (1998).
The Policy on Conflicts of Interest makes clear that conflicts of interest can result when a faculty member has involvements outside the University that deprive the University of his or her time and effort (e.g., when consulting activities exceed the "one-day-a-week rule"); makes inappropriate use of University resources for non-University purposes such as making money for himself/herself or for an outside commercial interest; has a financial interest in a company sponsoring his or her own research; enters into agreements that interfere with the free publication of research findings; or deprives the University of revenue to which it is entitled (as when intellectual property that should be owned by the inventor and University is instead kept by the researcher alone or is given by the researcher to an outside individual or entity). Researchers have an obligation to understand and abide by the Conflicts of Interest policy in their relationships with business and industry.
(With thanks to the Advisory Council on Research and the Faculty Senate Committee on Research for input)
June 15, 1999
Page Updated: June 27, 2007
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