Florida State University
Best Practices for Faculty-Affiliated Start-ups

Faculty-affiliated start-up companies¹ (“start-up” or “company”) are both opportunities and challenges for Florida State University (FSU). FSU has had a long history of entrepreneurial activity by faculty, staff, students and alumni and the University is, in general, supportive of its entrepreneurs. On the other hand, FSU is an institution of public trust, with education and research as its mission, and a requirement to maintain openness in research. Therefore, entrepreneurial activity must be balanced by careful review of the proposed relationships, which may or may not be allowed, and which may require active management to assure openness in research, academic freedom for trainees, and clear understanding about how conflicts of interest are to be managed.

FSU is committed to avoiding either perceived or actual conflict of interest issues with respect to faculty-affiliated start-ups. Both FSU and its faculty have responsibilities to optimize technology transfer and mitigate conflicts of interest when licensing FSU intellectual property to a faculty-affiliated start-up is considered.

University/Office of Commercialization Responsibilities

Make licensing decisions based on FSU’s Office of Commercialization’s (OC) professional judgment about technology transfer to achieve the best possible benefit to the public, without undue influence from internal or external parties.

To determine the most effective way to transfer the technology:

• The OC markets all FSU technology to ensure fair and open access to potential licensees.
• Faculty-affiliated start-ups should not receive or be perceived as receiving preferential treatment.
• FSU faculty/employees are not allowed to represent the potential licensee and must not negotiate directly with the OC.
• The faculty is subject to FSU’s Conflict of Interest policies and procedures. Appropriate FSU officials must review any actions that present a potential conflict of interest.
• If the OC, after thorough marketing, determines that a faculty-affiliated company is the appropriate licensee, the OC documents its marketing and rationale for its licensing decision.
• The faculty must disclose any interest (consulting fees and/or options) in the start-up, in accordance with FSU’s Conflict of Interest policy and procedures.
• The faculty must disclose outside activities in accordance with the Faculty Handbook.
• The faculty must agree to separate University responsibilities from company responsibilities according to the criteria listed under Faculty Responsibilities.
• If the conflict is deemed manageable by FSU officials and a Monitoring Plan is established with the involved faculty, the OC may proceed with the licensing.
• OC licensing agreements may be exclusive or non-exclusive depending on what is most suitable for achieving technology transfer.

 Faculty Responsibilities

Faculty must:

• Separate University duties for research and education from personal financial interests in the company.
• Separate and clearly distinguish on-going University research from work being conducted at the company.
• Limit consulting for the company to a maximum allowed by the Chair and/or Dean.
• Serve only in advisory or consultative roles at the company.
• Do not take managerial roles, Board of Directors positions or titles (i.e., CEO, CTO) suggesting management responsibility.
• Take a leave of absence if engaging in a management role.

Faculty must not:

• Negotiate with the University on behalf of the company.
• Involve research staff or other University staff in activities at the company.
• Company employees cannot be affiliated with the University.
• Involve company employees in FSU research.
• Involve current students in company activities.
• If a student asks to take a leave of absence to participate in the company, refer the student to the Dean for review of the request and independent advice.
• Involve in company activities any junior faculty for whom you have supervisory responsibility.
• Even if no supervisory role exists, avoid situations in which junior faculty might feel expected to be involved.
• Use University facilities for company purposes (unless it is through a contractual agreement such as a sponsored research agreement).
• Undertake company human subjects research at FSU as PI/protocol director.
• Supervise faculty who are PI/protocol directors for human subjects research related to the company.

Faculty may:

• Receive gifts or sponsored research from the company when appropriate safeguards are put in place to protect graduate students. Safeguards will be identified in the Conflict of Interest Monitoring Plan.

Pipelining

Many times, the faculty member wishes to continue to do research at FSU in the area of interest to their start-up. FSU is particularly concerned that University resources will be used to benefit the company, particularly new companies that do not have their own facilities or many employees (i.e., the “virtual” company.) FSU should not be the research or development arm of a start-up. Therefore, new follow-on or improvement inventions developed after the original dominating technology has been licensed to the start-up will still be marketed to all potentially interested parties and exclusive licenses will not always be granted to the start-up, even if there is no other interest.

Option and License Agreements to Faculty Start-ups

An option agreement is often used to “reserve” rights in a technology so that the company can begin exploring funding opportunities in order to actually acquire the rights in question. A start-up company sometimes prefers to take an option to a license, rather than an outright license itself. The OC may grant options for any time period up to one year in duration, most often in 6-month increments.

It is important for inventors to understand that this guidance covering options and licenses is intended to enable inventors to succeed in translating their technologies into use without jeopardizing the mission or funding status of the University. FSU has a rich history of translating inventions, and these practices are designed to build on that strong base.

Acknowledgement

Florida State University acknowledges and appreciates Stanford University for granting FSU permission to adapt and/or alter selected portions of their document titled “Best practices for faculty start-ups” for use in this guidance.

 ¹“Faculty-affiliated start‐up” is defined as a company where the original intellectual property originates with the faculty member, where the faculty member is a founder and has a significant equity position in the company, and often has an influential role in determining the direction of the company.