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June 20, 1996

Senate Council approves 1st policy on commercialization of inventions

Senate Council unanimously approved what would be Pitt's first-ever Commercialization of Inventions Through Independent Companies Policy at its June 10 meeting.

The policy would establish guidelines for Pitt faculty, staff and students seeking to commercially produce inventions based on technologies developed in their labs.

According to Vice Provost for Research George Klinzing's office, the policy is now being reviewed by members of the University Research Council, after which it will be sent to the chancellor for approval.

Under the policy, Pitt would encourage the commercialization of inventions by employees and students as a way to stimulate economic growth and help fulfill its public service mission, as long as such projects do not interfere with the teaching and research missions of the University.

Major elements of the proposed policy include: Ownership of equity Ordinarily, faculty, staff and students should be permitted to hold equity in companies that license their technologies provided that:

* The relationship has been evaluated and approved by the department chair, dean and entrepreneurial oversight committee (EOC).

* A cap of 20 percent is placed on the percentage of stock held by faculty, staff and students, though exceptions could be made for start-up companies. * Stock in the company is not traded or sold until a date specified by the EOC. Depending upon the nature of the company and its products, the EOC could prohibit the trading or purchase of stock during clinical studies; until two years have elapsed from the first commercial sales of the licensed product; until the company is sold, or until the stock is publicly traded.

* Faculty, staff and students do not hold management or operating positions in the company. Exceptions, however, could be made for a start-up company.

* Financial disclosures are provided annually to the department chair, dean and EOC. Disclosure also must be made when the relationship the involved faculty, staff and students have with a company changes.

* Involved faculty, staff and students sign consent forms indicating they understand the policy and will cooperate in its implementation.

Institutional ownership If the company licensing the technology does not have the capital to make payments, the University will accept stock in lieu of cash. However, the University will never be permitted to own so much stock that it has management power in the company. If the University wishes to invest in a start-up company, the company must be implemented by an outside participant not controlled by Pitt.

Company-sponsored research Company sponsored research at the University will be allowed with the following restrictions:

* Research proposals must be reviewed by the EOC prior to approval.

* Periodic reports must be provided to the EOC on research methodologies and results.

* Faculty, staff and students with equity and other potential financial benefits cannot be the principal investigator or attending physician in clinical trials; neither can they record patient data, negotiate a research contract or grant for the company or purchase from the company on behalf of the University.

Consulting Consulting by faculty, staff and students for the company involved normally will be permitted in line with the University's policy on consulting and outside professional services, provided that there is prior approval from the department chair, dean and EOC.

Other affiliations Faculty, staff and students generally will be prohibited from membership on the Board of Directors of the company involved, except possibly in the developmental stage.

After review by the EOC, affiliations such as being a member of a scientific advisory board will be permitted, as will receiving honoraria. Use of the Pitt name also will be permitted in line with University policies.

Operation of EOC The EOC will be appointed by the provost and senior vice chancellor for Health Sciences in consultation with the Senate president; it will be chaired by the Technology Management director. Membership should consist of faculty, staff, students and administrators familiar with the commercialization of inventions and knowledgeable in research and business. Licensing Pitt will continue to follow its current policy involving the licensing of technology. There will be no licensing of future rights to all technology that comes out of a lab, but licensees will be given a chance to review new technology as it develops.

–Mike Sajna


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