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Do's and Dont's Regarding Faculty Consulting Agreement Guidelines

Faculty Consulting Agreement Guidelines

These guidelines apply to all Consulting Agreements whether called Scientific Advisory Board Service Agreements, Product Development Agreements, personal License Agreements, or otherwise.

Revised and Approved December 15, 2009

Do’s

1) Do comply with all University, School and any other policies and guidelines for consulting, including limiting your engagement in outside consulting to 20% of your time for an average of one day per week

2) Do make sure that your outside activities are consistent with the performance of all your University duties, including safeguarding the ability of you and other members of the University community to do present and future University research, education and clinical work free of conflicting commitments or obligations to third parties

3) Do make sure all your consulting arrangements, including all product development arrangements, are in writing and signed by the company. Do include a clearly defined scope of work in any consulting agreement

4) Do remember that your consulting obligations are yours and yours alone in your individual capacity and not as an employee or faculty member of WU and may subject you to substantial personal liability. Do seek out legal advice from your personal attorney for all your consulting arrangements if you have any questions or are unsure of any obligation in such agreements

5) Do include the following language in all Consulting Agreements clarifying the personal, non-institutional nature of such services:

“Notwithstanding anything herein to the contrary, Company agrees that CONSULTANT serves Company under this Agreement in his individual capacity, as an independent contractor, and not as an agent or representative of Washington University(“Institution”), that Institution exercises no authority or control over CONSULTANT while acting in such capacity, that Institution receives no benefit from such activity, that CONSULTANT and/or Company cannot and will not make use of Institution resources or Institution managed funding in acting in such capacity, that Institution is not a party to this Agreement, and that Institution makes no representations or warranties under this Agreement and assumes no liability or obligation in connection with any such work or service undertaken by CONSULTANT. Company further agrees that any breach, error, or omission by CONSULTANT acting in such capacity or otherwise under this Agreement, shall not be imputed or otherwise attributed to Institution. Moreover, nothing in this Agreement shall be read or understood to encumber, in any way, any intellectual property that Institution claims ownership of through the Institution’s Intellectual Property Policy as such may be amended from time to time.”

6) Do comply with all aspects of the WU Intellectual Property Policy, including the obligation to disclose intellectual property to the Office of Technology Management, as necessary, so that the Office of Technology Management can make a Rights Determination under the Policy to decide if WU can and will assert ownership of such intellectual property.

7) Do ensure and document (see below) that all compensation in whatever form (cash, equity, royalty, etc.) received is at no more than a fair market value for the services rendered or intellectual property transferred

8) Do keep careful time records (activity logs) of all consulting activities

9) Do promptly and fully disclose all consulting arrangements and other financial relationships with industry :
  • To your department chair
  • To DRC and FPP on annual financial disclosure statement (which should be updated when there is a significant change, including a new consulting arrangement)
  • To IRB if engaged in human subject research
  • To patients as required and in form approved by FPP
  • In publications (journals, abstracts) and presentations at scientific meetings
Disclosures should include:
  • The financial interests of the faculty member
  • If related to research, COI disclosures should include the financial interests of all individuals supported by company (fellows, residents, study coordinator, co-investigators and collaborators)
10) Do ensure that if you are promised royalties as some or all of your compensation in an agreement that:
  • Your invented or authored royalty bearing intellectual property is claimed in a patent application or issued patent, or protected by copyright, if software. Your records or the Agreement itself should provide for the specific and detailed identification of the intellectual property on which you will be paid royalties by enumeration of the patent number, patent application serial number or copyright registration number; or,
  • If for royalty bearing intellectual property that is not the subject of a patent, patent application or copyright, you should not receive royalties as any part of your compensation unless the company provides: (a) a written and detailed description of the process used by the company to confirm that you have made a verifiable and valuable contribution of intellectual property to the design and/or development of the royalty-bearing product, and (b) an attestation based upon the findings of that process that the royalty rate being paid to you is consistent with the fair market value of such intellectual property.
  • You obtain and maintain records of royalty payments made to you, including the royalty rate and underlying sales figures.

Don’ts

1) Don’t accept cash compensation for consulting services in excess of fair market value which may vary according to your subspecialty and ordinarily should not exceed $500/hour, or $3,000 for a talk or lecture

2) Don’t accept royalties unless for products or services sold by the company that embody your intellectual property as defined in a patent, patent application or copyright; or where you have obtained a company attestation of your contribution of intellectual property and its fair market value in terms of the royalty rate, as described above

3) Don’t accept royalty payments for your performance of defined services (e.g., consulting, advisory, product review, etc.) provided to the company; royalties should only be for verifiable intellectual property that you have contributed to specific products and services

4) Don’t accept royalty payments that are based on a flat fee, or that are a minimum guaranteed amount

5) Don’t accept advances on royalties

6) Don’t accept royalty payments based on the use or sales of products or services provided to or for WU patients

7) Don’t accept compensation for services, whether denominated as “consulting” or otherwise, involving the performance of your commitments to WU, such as:
  • Teaching (including preceptorships or visiting surgeons) in the operating rooms of University-affiliated hospitals
  • Patient care activities
  • Research conducted under the auspices of WU (e.g. conducted with significant University resources or pursuant to a research grant or contract administered by the University)
  • Authorship of journal articles published in non peer-reviewed or peer-reviewed journals reporting research conducted under the auspices of WU

8) Don’t accept compensation for the prescription, implantation or other use of any company's drugs or devices in the course of WU patient care activities

9) Don’t accept compensation for presentations of talks, abstracts or posters written solely by the company
 ______________________________________________________

References/Helpful Links:

University and Medical School consulting policies: http://provost.wustl.edu/faculty_consulting

Recommended agreement provision regarding University/private separation:

http://otm.wustl.edu/forfaculty/consultingagreements.asp WU Intellectual Property Policy: http://www.wustl.edu/policies/intelprop.html

OTM Guidance on consulting agreements: http://otm.wustl.edu/forfaculty/consultingagreements.asp
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Copyright 2013 Washington University School of Medicine