Sponsored Programs and Research Services

CSU Conflict of Interest Policy

INTRODUCTION

DEFINITIONS

SCOPE OF APPLICATION

PROCEDURES

POLICY REGARDING EMPLOYEE
PARTICIPATION IN COMPANIES
COMMERCIALIZING THEIR INSTITUTIONAL RESEARCH AND
ASSOCIATED PROCEDURES

I. INTRODUCTION

A. GENERAL
POLICY

The principles articulated herein are intended to provide guidance in
the management of formal relationships between members of the Cleveland
State University (CSU) community and their external constituencies in
order to ensure that the design, conduct, and reporting of sponsored
research will not be biased by any conflicting financial interests.
Under the Public Health Service (PHS) and National Science Foundation
(NSF) final rules on Objectivity in Research (Federal Register, July
11, 1995), each University investigator is required to disclose to CSU
a listing of her/his significant financial interests, as well as those
of his/her spouse and dependent children, that would reasonably appear
to be affected by the research proposed for funding by the PHS or the
NSF. If, after review of these disclosures, it is determined that the
reported financial interests could directly and significantly affect
the design, conduct, or reporting of the research, the University will
report the existence of such conflicting interests to the sponsor and
act to protect the resulting research from bias owing to the conflict
of interest. This policy statement is intended to satisfy current
Federal rules for disclosure with regard to projects funded by the PHS
or the NSF. These policies also are intended to serve as exceptions to
the Ohio ethics law and related statutes (O.R.C. Chapter 102, O.R.C.
§2921.42, and O.R.C. §2921.43) which might otherwise apply.
Matters outside the scope of these policies will be subject to such
laws to the extent applicable.

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B. RESEARCH AND THE FUNCTIONAL
MISSION STATEMENT

The Functional Mission Statement for Cleveland State University commits
University faculty and staff to the development of an educational
environment where teaching, scholarship, and public service can thrive:
Cleveland State University is a comprehensive urban university
committed to providing an education of high quality to students,
primarily from the metropolitan area, with diverse backgrounds,
experiences, interests, and educational needs. As an active participant
in the development of intellectual, social, cultural, and technological
growth within the region and beyond, CSU serves as a catalyst, leader,
and partner in the ongoing enhancement of the quality of life and
economic viability of the region and the State. In particular,
objectives 5.2, 5.3, and 7.4 of the Functional Mission Statement give
emphasis to the complementary needs to establish a University research
agenda that supports basic and applied research, to promote the
scholarly activities of the University community by facilitating
opportunities for innovative research and creative activities, and to
develop research partnerships that address the critical needs of the
University's constituent groups. Carrying out research for the benefit
of society, therefore, is a key element of the University's functional
mission. Such University research is facilitated and/or made possible
through external funding, from private as well as public sources. It is
the University's responsibility to assure the integrity of all aspects
of such sponsored research while, simultaneously, taking care not to
discourage the development of external funding opportunities for its
faculty, staff, and students. The purpose of this document is to
identify situations where potential conflicts of significant financial
interest are likely to arise and to establish a process whereby such
conflicts are either avoided or at least managed equitably to the
satisfaction of all concerned parties.

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C. RESEARCH, PROFESSIONAL
ETHICS, AND PUBLIC CONFIDENCE

Technology transfer and international competitiveness have been
elevated to the status of national priorities, and our present national
leadership actively encourages the development of relationships between
industrial concerns and universities to achieve these goals. The
competitiveness and economic viability of regional business and
industry can be significantly advanced through sponsored program
interactions with university investigators and their students. Such
relationships provide efficient mechanisms for the early application of
newly discovered technological innovations and, therefore, can make
important contributions to the international competitiveness of the
University's business and industrial partners. It is expected that
members of the University community will maintain the confidence of the
University's corporate partners, as well as of the public at large, in
their research and other professional activities by embracing the
highest standards of professional ethics. Membership in the academic
community imposes on faculty, staff, and students the commitment to
foster and to defend intellectual honesty in research and scholarship.
The primary responsibility of the faculty is to their subject and to
seeking and stating the truth. University faculty and staff pledge
quality and integrity in their teaching, research, and public service
primarily through self-regulation, through adherence to individual
ethical principles, through dependence on accepted disciplinary
professional standards, and by reference to the traditions and
standards of collegiality characteristic of all institutions of higher
learning. This document articulates University policy on one aspect of
academic integrity in research: the management or elimination of
conflicts of significant financial interest between outside
constituencies and the associated funded activities carried out by
members of the University community. While this institutional policy
statement focuses upon avoiding, or at least managing, conflicts of
significant financial interest, its primary purpose is to promote
compliance with the highest ethical standards for the conduct of
professional activities.

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II. DEFINITIONS

(1) Conflict of Significant Financial Interest is considered
to occur whenever a University faculty or staff member, or other
University employee, or a family member of the University employee, has
an existing or potential financial or other material interest that
impairs, appears to impair, or has the potential to impair the
University employee's independence and objectivity in the discharge of
his/her responsibilities to and/or for the University. Alternatively, a
conflict of significant financial interest is considered to occur
whenever a University employee receives financial or other material
benefit through inappropriate use of knowledge or information that is
or should have been known to be confidential to the University.
(2) University Employee is any individual employed on a full- or
part-time basis at Cleveland State University who is receiving, or will
receive, compensation for such employment. This includes faculty,
staff, and students on hourly pay, assistantships or tuition grants.
(3) Investigator is the principal investigator, co-principal
investigators, or any other University employee responsible for the
design, conduct, or reporting of externally funded educational, public
service, or research activities.
(4) Family Member includes the University employee's spouse or domestic
partner and children or other adults who qualify as dependents under
the Internal Revenue Code definitions, and the employee's parents if
the parents provide significant financial support to the employee.
(5) Project implies any externally funded activity such as basic,
applied, or developmental research, instructional, curricular, or
creative activities, student aid, career development, or other activity
conducted by University faculty or staff members on behalf of the
University.
(6) Significant Financial Interest is any item of monetary value
including, but not limited to: (a) salary or other payments for
services rendered such as consulting fees or honoraria; (b) equity
interests such as stocks, stock options, or other ownership interests;
and (c) intellectual property rights such as patents, copyrights, and
royalties from such intellectual property rights. Significant Financial
Interest does not include: Cleveland State University remuneration such
as salary or royalties; consulting fees or honoraria from service on
advisory committees or review panels for public or nonprofit entities;
or financial interest in business enterprises or entities where the
value of such interests would not be anticipated to exceed $10,000 per
annum or represent more than a five per cent (5%) ownership interest.
The value of such equity interests is to be determined on the basis of
public prices or other reasonable measures of fair market value.
(7) Negative Finding means a determination has been made that no
conflict of significant financial interest exists.
(8) Positive Finding means a determination has been made that a
conflict of significant financial interest does exist and, therefore,
appropriate administrative action will be required.

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III. SCOPE OF APPLICATION

A. APPLICABILITY OF
GENERAL POLICY AND PROCEDURES

The general policy and associated procedures (Section IV) are
applicable to all sponsored program activity at Cleveland State
University carried out by University faculty members, professional
staff, scientists, trainees, technicians and other staff members,
students, fellows, volunteers, guest researchers, or collaborators. The
general policy and the associated procedures are derived from the final
rules on Objectivity in Research promulgated by the PHS and the NSF
that were published in the Federal Register of July 11, 1995. These
procedures will be followed whenever a member of the University
community submits a request for funding from any external agency,
whether a federal, state or local government agency or a private entity.

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B. APPLICABILITY OF
SPECIFIC POLICIES

(1) The specific policies and associated procedures regarding employee
participation in companies commercializing their institutional research
(section v) are applicable to all university employees (as defined in
section ii above) who create intellectual property owned by the
institution and who desire to hold an interest in a firm, corporation,
or other association (hereinafter "company") to which the Board has
assigned, licensed, transferred, or sold the university's interests in
discoveries or inventions made or created by that employee or in
patents issued to that employee commercializing their research.
(2) Private business activities that are not subject to the specific
policies because they are unrelated to the employee's institutional
research are nevertheless subject to other institutional policies on
paid external consulting, conflicts of interest and commitment, and
patents and copyrights.
(3) Private business activities that are not subject to the specific
policies because they are unrelated to an employee's institutional
research, and that do not fall within the definition of approved
consulting activities may not be performed during institutional working
hours, and institutional facilities, equipment or other resources may
not be used in connection with these activities except as expressly
authorized under other university policies.
(4) Decisions concerning the relationship between an employee's private
business activities and his or her institutional research shall be made
by the Vice Provost for Research.

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IV. PROCEDURES
A. MANDATORY DISCLOSURE OF
SIGNIFICANT FINANCIAL INTERESTS

(1) In accord with relevant Federal and State of Ohio regulations, the
University is required to manage, eliminate, or reduce any potential
conflicts of significant financial interest that may be inherent in the
personal financial interests of an investigator. Cleveland State
University, therefore, requires investigators on proposals to all
external public and private agencies to disclose to the University,
prior to submittal of the proposal, any significant financial interest,
including those of her/his family members, which would reasonably
appear to be affected by the project described in the proposal.
Investigators are required to provide updated disclosure information
during the time period in which the proposal is pending, annually
during the time period of an award, or whenever new significant
financial interests are obtained by the investigator.
(2) Private business activities that may relate to an employee's
institutional research are also subject to the policies and procedures
indicated in section v of the conflict of interest policy and must be
reported in writing by the employee to the employee's supervisor or
department chair and the Vice Provost for Research whenever a conflict
of interest is discovered by the employee and annually thereafter. In
accordance with O.R.C. §3345.14(D)(2)(a), conflicts shall be
reported to the Board of Trustees at the first Board meeting following
the disclosure.

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B. IDENTIFICATION OF CONFLICTS
OF SIGNIFICANT FINANCIAL INTEREST

(1) In conjunction with the administrative review of applications for
external support the Director of the Office of Sponsored Programs and
Research (OSPR) will review each Financial Disclosure submitted. The
Vice Provost for Research, in consultation with the Director of OSPR
shall:
(a) determine if there is a relationship between an employee's private
business activities and his or her institutional research such that
section V of these policies apply; and
(b) make the determination of whether or not a conflict of significant
financial interest exists.
(2) If the Vice Provost for Research determines that no conflict of
significant financial interest exists, the resulting negative finding
will be filed with OSPR. For negative findings no further review is
required.

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C. APPEAL OF POSITIVE FINDINGS OF
CONFLICT

(1) Investigators may appeal a resulting positive finding to the
University Research Council (URC) for a review of the conflict of
significant financial interest determination reached by the Vice
Provost for Research. The appeal must be filed with the Vice Provost
for Research within 10 working days of the positive finding. The review
of an appealed positive finding must be completed prior to the
expenditure of any funds under an award.
(2) The URC shall review the decision of the vice Provost and make an
independent recommendation to the Provost within 45 days of when the
appeal is filed. In reviewing positive findings, the URC will be guided
by the following principles:
(a) assure adherence to all relevant University policies and provisions
of collective bargaining agreements;
(b) give full consideration to the nature and extent of the financial
interests in the relationship of the investigator, and/or the
investigator's family members, with the external constituencies;
(c) give special consideration to the terms and conditions of sponsored
project agreements that mitigate or complicate the given situation; and

(d) consult fully with the investigator and obtain additional
information from the investigator, as deemed appropriate to the
management of the apparent conflict of significant financial interest.
(3) Within 10 days of receiving the recommendation of the URC, the
Provost shall make a determination of whether a conflict of significant
financial interest exists based on the decision of the Vice Provost,
the recommendation of the URC, and an independent review of the facts.
The decision of the Provost is final.

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D. MANAGING CONFLICTS OF
SIGNIFICANT FINANCIAL INTEREST

(1) Following the determination of a positive finding, the Vice Provost
for Research shall make a final determination involving one of the
following administrative actions:
(a) Accepting the sponsored project award;
(b) Not accepting the sponsored project award; or
(c) Accepting the sponsored project award subject to suitable
modifications in the award documentation or in the affiliation of the
investigator or his/her family's affiliation with the external
constituencies involved.
(2) Reasonable modifications under option IV(D)(1)(c) above might
include one or more of the following actions:
(a) Requiring that public disclosure of the identified financial
interests be made;
(b) Requiring that the data and research results be reviewed by
independent reviewers identified by the URC and the investigator;
(c) Requiring that the research plan be modified;
(d) Requiring that the investigator be disqualified from participation
in a portion of the research;
(e) Requiring that the investigator and/or her/his family member(s)
divest certain significant financial interests related to the positive
finding; or
(f) Requiring that the investigator and/or his/her family member(s)
sever relationships that create the conflict of significant financial
interest.

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E. COMPLIANCE
If an investigator who is required under this policy to file a conflict
of significant financial interest disclosure fails to do so or fails to
disclose a significant financial interest on the disclosure form, the
investigator may be subject to discipline under the appropriate
governing University disciplinary rules and procedures. If an
unreported significant financial interest involves a research project
administered by the University, through SPRS or otherwise, appropriate
administrative action required by the funding agency will also be
taken. Cleveland State University will promptly notify the funding
agency if it is determined that the University is unable to manage
satisfactorily any conflict of significant financial interest.
Intentional disregard for this policy, including non-adherence to the
agreed upon management plan, shall constitute serious misconduct and
may be the basis for an academic research misconduct inquiry.

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V. POLICY REGARDING EMPLOYEE
PARTICIPATION IN COMPANIES COMMERCIALIZING THEIR INSTITUTIONAL RESEARCH
AND ASSOCIATED PROCEDURES

A. EMPLOYEE RESPONSIBILITIES
(1) Employees, other than faculty, may pursue research projects as
authorized by their supervisors but may not perform private business
activities of any kind during institutional working hours. Supervisors
must take extra care to monitor the entrepreneurial activities of their
staff employees. They should authorize only those staff research
projects that will advance the mission of the university and the
employing unit, without regard to the financial interests of individual
employees. Non-faculty employees who wish to perform activities for
companies commercializing their institutional research shall do so on
their own time. These activities must not interfere with the
performance of any of the employee's institutional responsibilities and
must be undertaken in accordance with all applicable provisions of any
applicable collective bargaining agreement, university policies and
procedures, and state law.
(2) While faculty are permitted to engage in outside employment
relating to their institutional positions, they continue to be
responsible for the performance of all of their teaching, research and
service obligations. Authorized private business activities must not be
allowed to interfere with the performance of any of their institutional
responsibilities and must be undertaken in accordance with all
university policies and procedures, state law and when applicable,
article 26 of the CSU-AAUP collective bargaining agreement.
(3) Faculty are encouraged to develop discoveries and inventions with
commercial potential; however, they should do so with due regard to the
broader teaching and research mission of Cleveland State. Faculty
should not allow their interest in a financial opportunity arising out
of their research efforts to negatively influence their faculty
responsibilities or assigned duties. Specifically, research assignments
for students must be selected solely on the basis of the students'
interests and academic development. Faculty should respect and promote
the cooperative nature of the academic environment by sharing
information when appropriate and participating in joint research
efforts with their colleagues.

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B. APPROVAL OF REPORTED PRIVATE
BUSINESS ACTIVITIES

(1) Employees must obtain approval from the Vice Provost for research
and a conflict of interest management plan must be in place before any
business agreements related to their institutional research are
finalized. Employees may not enter into any agreements relating to
commercialization of their research until final written approval from
the Vice Provost for Research is obtained.

(2) Faculty shall not allow their management activities with newly
formed companies commercializing their institutional research to
consume a disproportionate amount of their professional attention.
Faculty engaged in approved private business activities who are unable
to perform all of their institutional responsibilities are encouraged
to consider a reduction of appointment or other approved leave
mechanism. Professional improvement leave available under O.R.C.
§3345.28 shall not be used for private business purposes.
(3) Employees other than faculty who wish to perform management
activities for newly formed companies commercializing their
institutional research during Cleveland State working hours may do so
only if they take approved leave. Staff who are unable to perform all
of their institutional duties because of management responsibilities in
their private companies are encouraged to consider a reduction of
appointment or other approved leave mechanism.
(4) Immediate supervisors or department chairs are responsible for
ensuring that employees participating in approved entrepreneurial
activities continue to perform all of their institutional duties and
obligations. Immediate supervisors or department chairs are also
responsible for:
(a) ensuring any employee to whom this policy is applicable has filed
the required conflict of interest management plan(s); and
(b) reviewing and making a recommendation as to the propriety of
business activities reported by their faculty or supervisees in written
disclosures required by CSU policies and any applicable collective
bargaining agreement.

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C. LIMITATIONS ON ACTIVITIES
(1) University employees who wish to participate in a start-up company
may discuss initial company formation matters with the university legal
counsel and/or the Vice Provost for Research. However, the employee may
not participate in the ongoing negotiation of option and/or licensing
terms between the company and the university. Third parties, such as
company management and/or legal counsel must perform this function.
(2) Employees should not hold management positions in start-up
companies commercializing their research. While they may initially find
it necessary to play a management role in a newly formed company, it is
expected that their management responsibilities will decrease as the
company develops. Professional management should be brought in at the
earliest opportunity. Agreements between the university and employee
owned start-up companies shall contain enforceable milestones for the
reduction of these management responsibilities. Failure to comply with
these agreed-upon milestones may result in the company's inability to:
(a) engage in sponsored research at the university; (b) utilize student
employees; and (b) maintain or enter into new commercialization
agreements with the university; and/or (d) participate in other
activities otherwise allowed under these guidelines.
(3) A company wishing to obtain an exclusive license to the
university's technology may be required to provide a viable business
plan including, at a minimum, the following: (a) a capitalization plan
addressing the acquisition of additional capital and the equity
dilution of the employee member's ownership interests; (b) a proposed
management team; and (c) milestones for capitalization, product
development, and commercial sale.
(4) While significant employee equity ownership may be inherent in a
newly formed company, it is expected that a university employee's
ownership interests, as a percentage of the total outstanding shares,
or membership interests in the company, will decrease as the company
develops and attracts additional equity. Agreements between the
university and employee owned start-up companies should contain
enforceable milestones for the dilution of these equity interests.
Failure to comply with these agreed-upon milestones may result in the
company's inability to engage in sponsored research, employ students,
enter into other commercialization agreements and/ or engage in
activities otherwise allowed for under both the general and specific
policies.
(5) An employee who acquires a significant financial interest in a
previously established company that contracts with Cleveland State to
commercialize his or her research shall not serve as a director or
officer of that company while employed by the university.
(6) An employee who acquires a significant financial interest in a
previously established company that contracts with Cleveland State to
commercialize his or her research may work as an employee of the
company only if:
(a) the employment is in compliance with all other applicable
university policies and collective bargaining agreements; and
(b) before employment starts with the outside company: (i) the conflict
of interest is disclosed in writing to the employee's supervisor or
department chair and the Vice Provost for Research; and (ii) a conflict
of interest management plan is submitted to and approved by the Vice
Provost for Research,
(7) Employees who are not directly involved with research and
development of technology licensed to an employee owned start-up
company may hold equity interests in that company only to the extent
not prohibited by O.R.C. Chapter 102 and sections 2921.42 and 2921.43
(8) Companies may not enter into any agreements with the institution
relating to the commercialization of an employee's research until final
written approval from the university legal counsel is obtained.
(9) Companies in which an employee holds an interest may enter into
agreements with the institution unrelated to research or technology
development for the purchase, sale or rental of equipment, supplies, or
services only to the extent not prohibited by O.R.C. Chapter 102 and
O.R.C. §2921.42 and §2921.43.

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D. RESEARCH WITH COMPANIES IN
WHICH EMPLOYEES HAVE INTERESTS

(1) Institutional facilities, equipment and other resources may be used
for research benefiting a company in which a CSU employee has an
interest only pursuant to a sponsored research agreement, facilities
use agreement or other appropriate contractual arrangement in
accordance with institutional policies. This includes, where required
by the nature of the research, review and approval of Cleveland State's
Institutional Review Board and the University Animal Care and Use
Committee.
(2) Faculty and staff permitted to be principal investigators (PI)
under other institutional policies may assume the role of pi in
sponsored research projects funded by companies in which they have an
interest only if:
(a) the proposed project is reviewed and approved by the Vice Provost
for Research;
(b) a formal resolution of the Board of Directors or equivalent
governing body of the company is passed including acknowledgement that
the Board is aware of the conflict of interest represented by the
company's funding of the project;
(c) a duly authorized company representative (other than a CSU
employee) and the Vice Provost for Research sign a sponsored program
agreement; and
(d) the research project has obtained all necessary approvals from
Cleveland State's Institutional Review Board and/or the University
Animal Care and Use Committee if the research involves the use of human
subjects or animal experimentation.
(3) Graduate and undergraduate students may use institutional
facilities, equipment and other resources to perform research
benefiting a company in which an employee has an interest only pursuant
to a sponsored research agreement. At all times, research assignments
for students must be selected solely on the basis of the students'
interests and academic development.

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E. STUDENT EMPLOYMENT BY
COMPANIES IN WHICH EMPLOYEES HAVE INTERESTS

(1) A Cleveland State student may not be employed by a company in which
a CSU employee has an interest if:
(a) The student is enrolled in a course taught by the employee;
(b) The employee is a member of the student's thesis or dissertation
committee;
(c) The employee is the student's advisor or the director of his or her
thesis or dissertation research; or
(d) The employee is the student's supervisor or is in any way
overseeing the student's work at Cleveland State.Such students may
perform research benefiting a faculty owned company only through the
university and pursuant to a sponsored research agreement or formal
internship agreement as specified in section V(D)(4).
(2) Students not covered by section E(1) may be employed by companies
in which university employees hold an interest. Prior to such
employment, an agreement that clearly sets forth the roles, rights, and
responsibilities of the respective relationships must be signed by:
(a) In the case of an undergraduate student, the student (or a legal
guardian if the student is under 18 years of age), the employee, the
chair of the student's department, the dean of the academic college in
which the student's program is housed, and an authorized company
representative other than the employee.
(b) in the case of a graduate student, the student, the employee, the
chair of the student's department, the chair of the student's graduate
committee, the dean of the graduate college, and an authorized company
representative other than the employee.

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F. INTELLECTUAL PROPERTY
Employees participating in start-up companies as approved pursuant to
these guidelines continue to be bound by Cleveland State's policy on
patents and copyrights and any applicable collective bargaining
agreements. New inventions and/or discoveries made as a result of an
employee's research efforts for the company, including those made under
formal consulting agreements, will be owned by the university unless
otherwise agreed to in advance, in writing, by the company and the Vice
Provost for Research. New inventions and/or discoveries developed by
the employee for the company must be immediately disclosed in writing
to the Vice Provost for Research.

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G. COMPLIANCE
(1) If an investigator who is required under this policy to disclose a
financial interest in a company or otherwise report or comply with the
guidelines of Section V does not disclose, report, and/or comply, that
investigator may be subject to discipline under the applicable
university disciplinary rules and procedures.
(2) If non-compliance involves a research project administered by the
university, through SPRS or otherwise, appropriate administrative
action required by these rules will also be taken. Intentional
disregard for this policy, including non-adherence to the agreed upon
management plan, shall constitute serious misconduct and may be the
basis for an academic research misconduct inquiry.

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CSU's Conflict of Interest Form