Advice to Yale Faculty Concerning External Consulting Activities
Committee on Cooperative Research, Patents & Licensing
Approved by Provost Salovey January 26, 2009
(Original - May 1986; Revised May 2004)
The Changing Nature of Consulting Activities
The University permits its faculty to engage in external consulting with the understanding that such activities should be consistent with the faculty member’s commitment to the general purpose of the University: to preserve humanity’s store of knowledge and to enlarge it. Consulting activities often provide an opportunity to apply scholarly expertise to socially useful ends, and they often contribute, directly or indirectly, to the faculty’s teaching and research. To avoid conflicts of commitment, however, the University requires its faculty to limit such outside involvement to no more than one day per seven-day week during the academic year, as well as during other periods for which the faculty member is receiving full-time compensation from the University.
This limitation on the time that a faculty member is permitted to engage in consulting is well known and widely observed. Less well understood and probably less widely observed is the requirement that faculty members not enter into consulting agreements that are in conflict with the University’s general objectives or its specific policies. Avoidance of such conflicts has become more difficult as the nature of “consulting” has changed in recent years. Traditionally, industrial enterprises have employed faculty consultants for their general expertise, seeking to direct this broad knowledge toward the solution of specific problems. Increasingly, however, industry has sought academic consultants because of a specific interest in the techniques or results of a faculty member’s university-based research. The narrowing gap between academic research and commercial development - most notable in the biological, medical, and computer sciences - has blurred the distinction between University research and external consulting and thus made it particularly important that faculty members be mindful of their obligations to the University when entering into private agreements with outside organizations. Some schools or departments have more restrictive rules.
Negotiating a Consulting Agreement
Many outside employers require faculty consultants to sign written consulting agreements. Many companies have a standard form for such agreements, but the standard form in many cases requires the faculty member to surrender far more of his or her individual rights than is necessary for a successful working arrangement. Certain standard forms also contain language that gives appears to give the company rights to physical or intellectual property that is not owned by the faculty member, such as access to lab equipment at Yale or claims to inventions made at Yale. Since the faculty member doesn’t have authority to give away rights belonging to Yale, what would happen is that Yale would keep the rights, the company wouldn’t have them, and the faculty member would be in breach of the contract with the company. In the paragraphs that follow, we comment specifically on several issues that have arisen often enough to come to our attention, but our general advice is: don’t sign any agreement without being certain that your rights and those of the University are clearly described.
In order that there be no confusion, it is useful to spell out in the agreement that the consultant is first and foremost a member of the faculty at Yale and subject to policies of the University. We recommend including language such as the following to avoid any ambiguity.
The Company acknowledges that: (i) the Consultant is a member of the faculty of Yale University (the “University”); (ii) the Consultant may be subject to certain policies of the University, as such policies may be revised from time to time, including, among others, policies concerning consulting, conflicts of interest, and intellectual property; (iii) this Agreement is subject to such policies; and (iv) any provision of this Agreement that conflicts with such policies is superseded by such policies. If the Consultant should leave the University and accept employment with another not-for-profit institution, the policies and guidelines of that institution shall govern.
To be certain that you do not enter into an agreement that is contrary to your own best interest or to University policy, it is advisable to consult with Yale Ventures. The office can answer your questions concerning University policy on outside activities, on patents and copyrights, and on the use of University facilities and resources. It is also advisable to seek the opinion of an attorney. Yale Ventures will furnish, upon request, the names of attorneys familiar with Yale’s policies who can assist you.
Too often, a faculty member, not wishing to appear uncooperative or distrustful, will simply sign whatever consulting agreement is presented by an employer. You should be wary of such impulses. However “standard” a proposed agreement may look at first glance, most companies will be quite willing to negotiate changes if these are required to protect your own interest or to avoid conflict with University policy. It is a good idea never to sign an agreement “on the spot.” Think about it, ask advice if needed, and don’t be afraid to ask the company to make alterations in the agreement.
The Duration of a Consulting Agreement
Agreements should have a specified duration. One year is the most common term, renewable if both parties agree. You should retain the right to terminate the agreement with some reasonable advance notice, such as 90 days.
It is very important to recognize that some consulting agreements contain provisions that survive the termination of the employment relationship. In particular, companies will often require that the faculty member keep certain data or information confidential after termination of employment (see the discussion of confidential information below). Companies may also retain rights to patent inventions after the consulting agreement terminates. You should be certain that any provision that survives the termination of the agreement has a specified date of expiration. We have seen agreements that purport to effectively deny a faculty member the right to patent in a particular area for an unlimited period of time.
Exclusive Consulting Agreements
Companies will often seek to restrain a consultant from working with other companies for the duration of an agreement or for a limited time thereafter. A consulting agreement may require, for example, that the company approve any consulting agreements entered into with others, or it may require the consultant to agree not to engage, as a principal or as a consultant, in any business that competes with any of the company’s businesses. It is the prerogative of the individual faculty member to determine whether to consult on any such exclusive basis, but such Arrangements should be entered only after careful consideration. It is particularly important that any exclusivity provisions be distinctly limited to a specified period of time.
To achieve the objectives of a consulting relationship it may sometimes be essential that the consultant gain access to proprietary or confidential information. You should understand exactly what information is to be held confidential and how long it is to be held confidential. Failure to understand the terms on which confidential information is provided by a firm can have very serious legal consequences. You should insist that any information which a company considers to be confidential should be provided in writing and marked “confidential.” If the information is provided orally it should be reduced to writing and marked “confidential” within a short period of time (e.g. 30 days). Such a practice will markedly reduce misunderstanding about your legal obligations. Otherwise you run the risk of breaching the agreement by disclosing information you didn’t realize was confidential. Breach could result in you having to pay significant serious fines and might even carry criminal penalties.
The consulting agreement should identify the period during which information is to remain confidential. Sometimes this period will extend beyond termination of the consulting agreement itself, but the period should be limited (perhaps one to five years, depending on the nature of the information). The agreement should contain language that defines when such information is no longer confidential. You should insist that you be relieved of any obligation to keep confidential any information that: (1) was already known to you prior to the agreement; (2) is lawfully and without restriction made available to you by a third party; (3) was created by you outside the context of the consulting agreement; or (4) is or later becomes known to others through no breach of the agreement.
You should at all times remain completely aware that confidentiality is antithetical to the basic values of free and open dissemination of information that are at the core of academic life. To the extent possible, you should attempt to restrict the confidentiality requirements of your outside activities to a minimum. If at any time the confidentiality requirements of a corporate employer begin to constrain the work that you are engaged in as a teacher or researcher at the University, you should discuss the matter with your department chair, the dean of your school, or the Provost. Should such circumstances arise, you should take immediate steps to curtail the outside activity.
Although such circumstances are not common, it is nonetheless possible that you may, in your work at the University, generate commercially valuable information that is the property of the University. Such a circumstance might arise if your academic research were likely to produce a patentable result, and premature disclosure outside the context of normal discussion with colleagues and students might jeopardize the validity of a patent. If it seems appropriate to disclose potentially patentable information to an outside employer, you should obtain the employer’s written agreement to hold the information confidential and you should reduce any information so disclosed to writing. If such a circumstance arises, it would be advisable to consult Yale Ventures before disclosing information that is the property of the University. The Office can advise you how to make such a disclosure in a manner that protects the University, as well as your own share in any royalties ultimately received by the University.
We would recommend that you include language such as the following in any agreement:
a. The Consultant shall not make available to the Company any information concerning research activities carried out in any University laboratory, or the results thereof or intellectual property arising therefrom, except for information, results, or property available generally to the scientific community at large through published reports or otherwise.
b. Consultant agrees that Consultant will not, during the term of this Agreement, improperly use or disclose any proprietary information or trade secrets of any former or current employer or other person or entity and that Consultant will not bring onto the premises of the Company any unpublished document or proprietary information belonging to such employer, person or entity unless consented to in writing by such employer, person or entity.
c. In providing Services to the Company pursuant to this Agreement, the Consultant may acquire confidential information or proprietary information of the Company that is clearly identified as such in writing, either at the time of disclosure or shortly thereafter. Such information may include, but is not limited to, business plans, technical data, trade secrets or knowhow, research and product plans, products, developments, inventions, processes, computer algorithms, designs, configurations and software, computer passwords and network access mechanisms, DNA and protein sequences in raw and assembled form, and in particular business and/or scientific plans, formulas and technology related to the Company’s project in metabolic disease (“Proprietary Information”). The Consultant agrees not to disclose any Proprietary Information to any third party or to use any Proprietary Information for any purpose other than performance of Services pursuant to this Agreement, without prior written consent of the Company.
d. Proprietary Information subject to (c) above shall cease to be Proprietary Information if it: (i) is or later becomes available to the public through no breach of this Agreement by the Consultant; (ii) is obtained by the Consultant from a third party who had the legal right to disclose the information to the Consultant; (iii) is already in the possession of the Consultant on the date this Agreement becomes effective as evidenced by competent written records or (iv) is required to be disclosed by law, government regulation, or court order, or (v) is independently developed by the Consultant as evidenced by competent written records.
Intellectual Property (Patents and Copyrights)
The Yale Patent Policy states:
“An invention made by a faculty member in the course of a paid consulting engagement for a company may be assigned to the company only if it is unrelated to the activities for which the faculty member is employed by Yale and it was not made or conceived under circumstances involving University facilities or personnel. Such an invention will be considered unrelated to the activities for which the faculty member is employed by Yale if the invention arises directly out of consulting activity paid for by the company, and, for example, it is made in response to a problem posed by the company or is based on nonpublic information provided by the company to the faculty member for use in the consulting engagement. It will be considered not to have involved the use of University facilities if no University facilities or resources (including but not limited to space, computers, laboratory equipment and supplies), no University-administered funds, and no University personnel other than the faculty member himself or herself, are involved in the conception or reduction to practice of the invention. All inventions made by Yale faculty members in the course of consulting, and any assignments of rights to such inventions, must be reported promptly to Yale Ventures. That Office will agree to abide by reasonable confidentiality restrictions for disclosures of inventions and assignments made in the course of consulting.”
Companies often require a consultant to assign to the company any rights to patents or copyrights developed by the consultant in the performance of the services described in a governing consulting agreement. When there is a close connection between the work you perform as a consultant and the work you undertake as an academic researcher such provisions can be a source of great difficulty. If you sign away rights that belong to the University, there is a risk that you will be in breach of your consulting contract, and would be subject to a lawsuit by the company.
The grants and contracts you work on create obligations governing your inventions. In particular, the rights to any inventions developed wholly or in part with the assistance of federal funds, which belong to the University, include a non-exclusive license and related rights in the federal government. Research agreements with foundations or industrial concerns usually contain provisions giving them rights pertaining to the resulting intellectual property. You may not enter into consulting agreements that create claims to intellectual property in conflict with the rights established by prior contractual commitments of the University.
You need to make sure, therefore, that your consulting contract doesn’t make commitments about your intellectual property that you cannot keep. Yale offers the following solution to assist you. Before you sign a consulting contract, write in above the signature block: “Subject to Attached Intellectual Property Addendum.” Then attach the following Addendum:
Intellectual Property Addendum
THIS ADDENDUM hereby modifies and supplements the consulting contract or similar document (“Contract”) to which it is attached.
Whereas, the parties to the consulting contract as modified and supplemented by this Addendum are: _________________________________(Consultant) and ____________________________ (Company); and
Whereas, the Consultant is an employee of Yale University (“Yale”), and is therefore subject to the Yale University Patent Policy (See in particular Section 6, “Inventions Not under University Auspices”), which gives Yale ownership and other rights to certain intellectual property created by Consultant, including intellectual property created while conducting work for others;
- The parties agree that wherever there is any conflict between this Addendum and the Contract, the provisions of this Addendum take precedence and the Contract shall be construed accordingly.
- Notwithstanding any terms in the Contract to the contrary, Consultant and Company agree as follows:
Intellectual property created by Consultant at any time may be owned by or subject to other obligations to Yale, pursuant to the Yale University Patent Policy, or, if Consultant conducted sponsored research at Yale, by or to the sponsors such research, including providers of research materials. Company’s rights pursuant to intellectual property created by Consultant shall be subject and secondary to such ownership rights or other obligations.
- For record keeping purposes, Consultant requests that Company sign a copy of this Addendum and return it to Consultant. However, if Company allows Consultant to perform under the Contract without signing a copy of this Addendum, that manifests Company’s assent to the terms of this Addendum.
Thursday, March 13, 2014
Although ordinarily any invention made by a Yale faculty member1 is owned by the University, the Patent Policy provides that the University will make no claim to an invention made by a faculty member if two tests are satisfied:
- the invention is unrelated to the activities for which the individual is employed, and
- the invention was not made or conceived under circumstances involving University facilities or personnel.
An invention made by a faculty member in the course of a paid consulting engagement for a company will satisfy the first test if the invention arises directly out of consulting activity paid for by the company, and for example, it is made in response to a problem posed by the company or is based on nonpublic information provided by the company to the faculty member for use in the consulting engagement. It will satisfy the second test if no University facilities or resources (including but not limited to space, computers, laboratory equipment and supplies) no University-administered funds and no University personnel other than the faculty member himself or herself, are involved in the conception or reduction to practice of the invention.
A faculty member may agree to assign inventions made in the course of consulting to the company only if these two tests are satisfied. All inventions and assignments made by faculty members, including those made in the course of consulting, must be reported promptly to Yale Ventures. Yale Ventures will agree to abide by reasonable confidentiality restrictions for disclosures of inventions and assignments made in the course of consulting.
1 For purposes of the Patent Policy, an invention is made by a faculty member if the faculty member would be considered an inventor of the invention under the U.S. patent law.
Guidance for Faculty Concerning Consulting and Other External Activities
This Guidance alerts faculty members to the requirements and obligations that apply to the professional activities in which they engage that are outside of their Yale responsibilities. External professional activities often provide an opportunity to apply their scholarship to applications outside the university, and they often contribute to the faculty member’s teaching and research. Yale encourages faculty members to engage in external professional activities, on the conditions that such activities are consistent with university policies and sponsor requirements, and faculty members obtain all necessary approvals and appropriately disclose and report such activities. Please also note that Yale recommends all agreements with outside entities or institutions include the Yale University Addendum to Faculty Consulting or Other External Activity Agreement.
Questions or concerns related to this Guidance or to the terms of any external professional activity can be directed to email@example.com or https://provost.yale.edu/contact-us.
September 21, 2022
I. Avoiding Potential Conflicts of Interest or Commitment
While engaging in external professional activities, faculty members must maintain their overriding professional obligations to Yale and its mission and avoid any conflicts of interest or commitment that may interfere with those obligations.
To prevent a conflict of interest, Yale requires that faculty members not enter into agreements with external entities or institutions that may violate their obligation to act in the best interests of the university. [Faculty Handbook Section XX.E.1]. To prevent a conflict of commitment, Yale requires that faculty members limit the total time devoted to external professional activities to no more than one day per seven-day week on average per semester during the academic year, or in any summer month during which the faculty member is receiving full-time compensation from the university. [Faculty Handbook Section XX.E.4].
Avoidance of such conflicts has become more critical as the nature of external professional activities has evolved in recent years. Traditionally, companies engaged faculty consultants for their general expertise, seeking to direct their broad knowledge toward the solution of specific problems. Increasingly, however, industry has sought academic consultants because of a specific interest in the techniques or results of a faculty member’s university-based research. The changing relationship between academic research and commercial development, most notable in the biological, medical, and computer sciences, make it increasingly important to assure a careful distinction between university research and external consulting.
In addition, other academic institutions have increasingly offered external appointments, consulting contracts, funding for labs at these other academic institutions, and other types of financial support for Yale faculty members to conduct research or other academic activities outside the auspices of the university. These developments have made it particularly important that faculty members be mindful of their obligations to the university and its sponsors when entering into agreements to engage in external professional activities with other institutions.
II. Other Faculty Handbook and Sponsor Requirements
Faculty members’ external professional activities must not conflict with their obligations under the Faculty Handbook. See Handbook Sections III.E and XX.E for the obligations most directly related to external professional activities. In addition, external professional activities must not conflict with sponsor requirements. Participating in sponsor funded research may also limit a faculty member’s ability to accept appointments or engage in research at other institutions. The Office of Sponsored Projects (OSP) can assist in evaluating any external professional activities for their consistency with sponsor obligations.
Appointments. The Faculty Handbook narrowly prescribes the types of appointments and positions faculty members may accept elsewhere. “No one appointed to a ladder and/or full-time faculty position at Yale may simultaneously hold a tenure or tenure-track, ladder-equivalent, or full-time position or the equivalent elsewhere”. This prohibition applies even if the appointment or position is characterized as “consulting” or requires less than one day per seven-day week of the faculty member’s time. There is a limited exception for clinical faculty in the School of Medicine that requires pre-approval by the Yale Corporation. [Faculty Handbook Section III.E]
Teaching. The Faculty Handbook places strict limits on outside teaching activities. It states that “[n]o member of the faculty at any rank employed full-time at Yale may hold a teaching position, whether full-time or part-time, even a visiting one, at another institution during the academic year without special permission from the provost, and in such cases additional compensation is not permitted. With prior approval from the provost, a faculty member may accept a temporary visiting appointment at another institution while on an unpaid leave of absence from Yale.” [Faculty Handbook Section III.E]
Research. A faculty member may accept only certain roles on a research project at another institution if such project is supported with any funding other than from or through Yale. A faculty member may not participate as principal investigator, co-investigator, or key personnel on such projects. A faculty member may participate in research projects at other institutions as an ‘Other Significant Contributor’ or similar role provided there is no formal effort commitment or remuneration. Exceptions are made rarely and only with the prior approval of the provost. [Faculty Handbook Section XX.E.3]
Faculty members may not “conduct secret or classified research” [Faculty Handbook Section XX.C.1.b] and must “be able to publish the results of their research without prior approval of a sponsor.” [Faculty Handbook Section XX.C.1.c]
Management of an Outside Entity. The Faculty Handbook limits the ability of faculty members to serve in a management role with an outside entity. “Because of the potential for conflict of interest or commitment, in many circumstances it would not be appropriate for a faculty member to participate in the day-to-day management of an outside entity, whether for-profit or non-profit. However, in certain circumstances, the University may allow faculty management of outside entities under conditions that are intended to minimize the likelihood of a conflict of interest or commitment.” Conditions under which such arrangements are permitted are determined by the provost, the relevant dean, the Conflict of Interest Committee, and (when applicable) the Office of Cooperative Research. [Faculty Handbook Section XX.E.5]
Service on Fiduciary Boards. Faculty members must disclose outside board service in accordance with the Conflict of Interest Policy. In the following situations, a faculty member must request approval from the provost or the provost’s designee prior to accepting a board position: (1) the faculty member holds an administrative position at the University (e.g., dean, department chair, director of a center); or (2) the outside entity is a start-up company which is based on intellectual property developed by the faculty member. [Faculty Handbook Section XX.E.6]
University Resources. Faculty members must refrain from using university facilities, supplies, equipment or other resources more than occasionally and incidentally in performing any external professional activities. In addition, a faculty member’s external professional activities may not involve any Yale students, employees, post-doctoral trainees or any other Yale personnel other than the faculty member. [Faculty Handbook Section XX.E]
III. Disclosure and Reporting Requirements
Faculty members engaging in external professional activities must comply with all applicable university and sponsor disclosure and reporting requirements.
Disclosure to Yale
Under Yale’s Conflict of Interest Policy, all faculty members who have appointments of greater than 50%; all faculty members who hold administrative positions; and all faculty members “responsible for the design, conduct or reporting of research” are required to submit an annual external interest disclosure form describing their external professional activities and financial interests. The Conflict of Interest Policy further requires faculty members to disclose remuneration from an entity or institution for an activity that is related to the faculty member’s Yale activities. Yale generally considers, among other things, any outside research, teaching, or clinical activities to be related to a faculty member’s Yale activities.
Disclosure to Sponsors
Faculty members must also ensure that they are complying with all disclosure requirements of sponsors. For example, applicants for any Public Health Service (e.g. NIH, CDC) or National Science Foundation funding may need to disclose their external professional activities in both their biosketch and as “other support” in their applications and periodic reports, depending on the nature of the external activity. These requirements may vary from sponsor to sponsor, and faculty members should consult with OSP if they have questions about specific requirements.
Disclosure in Publications and Speaking Engagements
Any listing of a faculty member on any publication resulting from or any speaking engagement in connection with external professional activities that references the faculty member’s affiliation with Yale must include a disclosure such as the following: “Dr./Professor/Title [Name]’s contribution to this publication was made in their individual capacity and not as part of their Yale University duties or responsibilities.”
Use of Yale Name
Faculty members engaging in external professional activities must not use the names, logos, or marks of Yale or any of its affiliates, faculty, staff, employees, students, or volunteers in connection with such external professional activities, without prior written permission from Yale University; and must not represent or imply that Yale endorses any entity or institution or any of its products or services.
Faculty members engaging in external professional activities should be aware that Yale makes no representations or warranties about the services provided by the faculty member and that Yale will not provide insurance or indemnify the faculty member in connection with the external professional activities.
IV. Avoiding Scientific, Budgetary, and Commitment Overlap with Sponsored Projects
All federal funding agencies prohibit overlap between sponsored projects and other funded activities. For example, both NIH and NSF prohibit any scientific, budgetary, or commitment overlap between projects. Faculty members with NIH support must ensure that any funded external professional activities do not involve the same or closely-related research objectives or research design as their NIH-funded projects, and must provide sufficient detail to allow NIH to confirm that there is no scientific overlap; must not request duplicate or equivalent budgetary items (e.g., equipment, salary) when such items are provided for by another source; and must not make time commitments that exceed 100 percent (i.e., 12 person months), whether salary support is requested in the NIH application or not.
Other sponsors have similar requirements, and faculty members should seek guidance from OSP to ensure that their external professional activities do not involve impermissible scientific, budgetary, or commitment overlap.
V. Critical Terms of an Agreement with an Outside Entity or Institution
Many entities or institutions seeking to engage the services of faculty members require signed, written agreements. Such agreements can take many forms. Some are consulting agreements, in which the faculty member agrees to act as an independent contractor performing services for the outside entity or institution. Others may be presented as employment contracts, in which the faculty member is asked to agree to become an employee subject to the direction of the outside entity or institution. Academic institutions are increasingly offering formal employment to faculty members of other institutions, often in the form of “adjunct” or “visiting” academic positions. Faculty members must assure that such agreements do not include terms that are inconsistent with their obligations to Yale including those described in this guidance or the Faculty Handbook, any sponsor requirements, or the faculty member’s own understanding of the terms of engagement, and must negotiate changes to align with their Yale obligations or sponsor requirements. In order to assist in assuring such alignment, Yale recommends that all agreements with outside entities or institutions include the attached Yale University Addendum to Faculty Consulting or Other External Activity Agreement.
Certain terms in agreements, categorized as foreign talent recruitment programs even if not labeled as such, with foreign governments or institutions may jeopardize a faculty member’s participation in federal awards. These terms can include requiring the faculty member to engage in the transfer of intellectual property/materials/or data, recruitment of researchers or trainees, establishment of a laboratory or company, the obligation to apply for funding, restrictions on publication, and confidentiality of the agreement or its terms. If a faculty member is asked to agree to any of such terms, they should contact OSP for an evaluation of the arrangement.
Intellectual Property. Standard form agreements may contain language that purports to give the entity or institution access rights or rights to intellectual property that the faculty member does not own. An invention made by a faculty member in the course of an external professional activity may be assigned to the entity or institution only if Yale Ventures (formerly, Office of Cooperative Research) determines both of the following conditions are true: (1) the intellectual property is unrelated to the activities for which the faculty member is employed by Yale, which include research, teaching, and clinical activities, and (2) the intellectual property was not made or conceived under circumstances involving Yale facilities or personnel. In addition, sponsors of research at Yale, such as the NIH, may have rights in intellectual property developed with the support of sponsored funds. Faculty members may not enter into agreements that create claims to intellectual property in conflict with the rights of the university or the rights of sponsors, and all inventions made by Yale faculty members in the course of external professional activity must be reported promptly to the Yale ventures. [Faculty Handbook Section XX.D, and Yale University Patent Policy]
Confidential Information. While it may sometimes be essential for a faculty member to gain access to the proprietary or confidential information of an entity or institution in connection with an external professional activity, such information should be clearly identified as such and an agreement should specify the period during which information is to remain confidential. Before agreeing to a confidentiality requirement, faculty members should consider carefully whether the terms are consistent with Yale’s fundamental commitment to the free and open dissemination of academic information and with the Faculty Handbook proscription on sponsor restrictions relating to publishing research results. Faculty members must not agree to provide any information to an external entity or institution that is confidential to Yale.
While this guidance is intended to be instructive for faculty members who engage in external professional activities, questions are welcome and can be directed to firstname.lastname@example.org or https://provost.yale.edu/contact-us.