Scope of Advisory Group #1:
Working with Industry - What is Appropriate Academic Enterprise?

University Regulation 4 was issued by UC President Sproul in 1958, after consultation with representative faculty, in order that there be a clear understanding both by members of the UC faculty and by the public concerning the types of activities and services that the University provides to industry. Regulation 4 summarizes the basic principles that determine whether or not a proposed project is appropriate and addresses the conditions under which the project should be conducted. According to Regulation 4, it is appropriate for faculty members to participate in tests and investigations which lead to the extension of knowledge or to increased effectiveness in teaching. Routine tasks of a commonplace type and tests of a purely commercial character, however, are precluded; work is to be conducted so as to be generally useful with the right of publication reserved to the University; results of the research are the property of the University; and sponsors must pay all direct and indirect costs of the project.

Advisory Group #1 will explore the range of industry projects that are actually being conducted or considered today, including proprietary research, product development, business incubators, sale of University facilities or services, exclusive support of research teams by individual companies, joint ventures, and other opportunities. The Group will consider what fundamental principles should guide the University in determining whether to undertake a project, whether modifications should be made to current policy to accommodate such activities and whether any activities should be considered inappropriate.

Participants in Advisory Group #1:
What is Appropriate Academic Enterprise?

James Gill (Chair)
Associate Vice Chancellor for Research
UCSC

Barbara Yoder (Specialist)
Research Administration
UCOP

John R. Bedbrook
Executive VP, Director of Science,
DNA Plant Technology
Oakland, CA

Stanley Chodorow
Provost, University of Pennsylvania

Linda Dale
Director, Contracts & Grants
UCSD

Edward A Dennis
Professor, Department of Chemistry and Biochemistry
UCSD

Cheryl Fragiadakis
Department Head, Technology Transfer Department
LBNL

Charles Gruder
Executive Director
Special Research Programs
UCOP

G. Wesley Hatfield
Professor, Microbiology and Molecular Genetics
UCI

V. Wayne Kennedy
Senior Vice President, Business & Finance UCOP

Rulon K. Linford
Science & Technology Base Programs
LANL

Kumar Patel
Vice Chancellor of Research
UCLA

Michael E. Phelps
Chair, Department of Pharmacology-Molecular Medicine
UCLA

David D. Sworder
Acting Vice Chancellor of Research
UCSD

Loy E. Volkman
Professor, Plant & Microbiology
UCB

A.R. Frank Wazzan
Dean, School of Engineering & Applied Science
UCLA

Robert K. Webster
Assistant Director, Agriculture and Natural Resources
UCOP

Report of Advisory Group #1:
What is Appropriate Academic Enterprise?

Opportunities:

University Regulation 4 needs an expanded mission statement to promote University-Industry partnerships, to include:

1. transfer and application of new knowledge;

2. enhance economic well-being of California;

3. research that addresses problems that arise from industry and/or that include industrial collaboration.

Concerns/Challenges:

The expanded mission should protect against:

1. conflicts of financial interest that can't be managed;

2. conflicts of commitment;

3. using University personnel and facilities for outside activities;

4. inhibiting the free flow of information;

5. projects which preclude the full participation of students or exploit students as "cheap labor."

Guiding Principles:

The fundamental conclusion of Advisory Group #1 is that, in addition to the creation of new knowledge, the application of knowledge to enhance the quality of life and the economic welfare of the State is not only appropriate academic enterprise but is a core mission of research universities. In that light, working with industry is appropriate not only because doing so can improve the quality and quantity of teaching and research within the university, but also because of its contributions to a knowledge-based economy. Such economic contributions, including the creation of new jobs and private wealth, are seen as legitimate and valuable activities that merit professional reward along with rewards for other scholarly achievements.

This mission statement applies the land grant vision of the university to its role in a modern economy, and addresses more than the need to court and manage private sector sources of research funds. Rather, it affirms that external relationships, including those with the private sector, should be expected of faculty and staff in many disciplines.

Recommendation for Action:

Based on this guiding principle, Advisory Group #1 revisited University Regulation No. 4, last revised June 23, 1958, and signed by then-President Sproul. This regulation seems too narrowly drawn, defensive, and inconsistent with both our conclusion above and current University practice. The 1982 Report of the University-Industry Relations Project recommended that this regulation be amended but no change was made. Our proposed revision follows. The primary difference is in tone. This revision encourages and validates a wide range of University-Industry interactions.

If Regulation 4 is modified along the lines recommended below, then Advisory Group #1 also advocates reviewing all University regulations in light of these changes and promulgating administrative changes consistent with them, especially regarding professional rewards, management of relationships with the private sector to avoid conflict of interest and commitment, rights of students to intellectual property and open access to information, and the differential impact within the University of these relationships.

PROPOSED REVISION OF UNIVERSITY REGULATION NO. 4

SPECIAL SERVICES TO INDIVIDUALS AND ORGANIZATIONS:

RELATIONS BETWEEN THE UNIVERSITY AND EXTERNAL PARTNERS

The University's missions of teaching, research, and public service should be carried out not only for their intrinsic merit but also to enhance the quality of life and the economic well-being of California and the nation. Teaching should prepare students, from undergraduates through post-doctoral fellows, for productive non-academic employment as well as for academic careers. Research should include the dissemination and utilization of new results in the academic, public, and industrial sectors. The transfer and application of knowledge often may occur most effectively in collaboration with the private sector. Public service should include guidance, advice, and consulting to the public and private sectors by University members.

Accordingly, so that there may be a clear understanding by all members of the University and the public concerning special services by University members (faculty, staff, and students) to external individuals, businesses, charitable, or governmental organizations, the President of the University, after due consultation, makes the following statement of general policy.

I. Special Services by University Employees.

1. University members are encouraged to render professional or scholarly services to external individuals, businesses, and charitable or government agencies. These services are expected to enhance, and must not interfere with, their internal University duties.

2. These service may be for compensation except when prohibited by the terms of appointment. Compensation is subject to University regulations concerning consulting and the management of conflicts of interest [cite regulations].

3. Within such limits, University employees are encouraged to engage in the practice of their professions for the purpose of maintaining professional competency, teaching effectively, and applying knowledge for the public good.

4. When consulting or other outside services will interfere with University duties or create unmanageable conflict of interest, they must be undertaken during a full or partial leave of absence, without University salary, for the period involved, or avoided altogether.

II. Services involving the use of University facilities or conducted under a grant or contract to the Regents.

1. Presidential approval.

Research for the benefit of Federal, State, industrial or other projects is to be undertaken only under conditions approved in advance by the President. Prior to execution of a contract, expenditures or commitments of any kind are prohibited except as may be authorized by specific regulations of The Regents of the University.

2. Character of undertakings.

The appropriate role of University involvement in a project is to advance knowledge or to increase the effectiveness of teaching, through disinterested inquiry, and to involve students as much as possible. Projects without such potential, which are not objective or are of a purely commercial character, will not be undertaken. Commercial research involving controversial elements will be undertaken only at the explicit and unanimous request of representatives of all parties to the controversy.

3. Expenses incurred by the University.

For all tests and investigations made for agencies outside the University, a charge shall be made sufficient to cover all expenses, both direct and indirect.

4. Publicity of results.

All such research shall be conducted so as to be as generally useful as possible. To this end, the right of publication is reserved by the University. The University may itself publish the material or may authorize, in any specific case, a member or members of the faculty to publish it through some recognized scientific or professional medium of publication. A report detailing the essential data and presenting the final results must be filed with the University. Notebooks and other original records of the research are the property of the University.

5. Use of the Name and Seal of the University.

The use of the name or seal of the University for advertising purposes shall not be permitted.

6. Patent Agreements.

For those projects in which patentable ideas may result, in the opinion of the President or of the chairman of the department concerned, patent agreements between the sponsor and the University shall be made. Employees of the University will be required to execute agreements, before the work begins, in which the position of the employee, the University, and the sponsor shall be clearly set forth, according to current University regulations. (Cite regulations).

Brief Commentary:

Advisory Group #1 first discussed the motivations for reconsidering appropriate academic enterprise in the context of university-industry relations. Motivations included: access to cutting-edge research ideas, facilities, and colleagues; improved ability to prepare students for productive careers; contributing to the economy of the region and state, thereby improving quality of life and governmental support for the University; and access to funds to support students and research. All of these were affirmed as important to the University and needing to be facilitated by university policy. This discussion led to the list of Concerns and Opportunities given above, although we did not focus directly on those categories.

We then reviewed relevant existing university documents, namely Regulation 4, the 1958 statement of Principles Underlying Regulation No. 4, the relevant portions (pp. 14-21) of the 1982 Report of the University-Industry Relations Project, and the Current Guidelines on Industry-University Relations (1989). We were unclear about the relative or absolute status of the various documents (policy, regulations, and guidelines) or their operational consequences. We elected to address what seemed to be the highest order document: Regulation No. 4. In our first session we discussed its principal components and concluded that it failed to serve or even reflect current practice and intent. In our second session we addressed each portion of the Regulation and achieved consensus on the content and, to some extent, wording of a revision, presented above.

There was widespread agreement about the change in tone and the rationale for academic enterprise reflected in the proposed revision. There was more disagreement about the management policies required to implement this more proactive approach. Advisory Group #1 expected these policies to be discussed in detail in other Working Groups. Concern was expressed about various effects of increased university-industry interaction, turning more on questions of potential inequality than lack of objectivity. These concerns included the effects of: limitations on the free flow of information between members of the University (though it was noted that information goes unshared for many reasons other than terms of research awards); the range of constituents considered "industry" (e.g. workers, small businesses, faculty-owned companies, agriculture, etc.) and the equality of their access to the University; differential impact within the University (unequal research opportunities, jobs, or personal financial rewards for individuals or disciplines); using public funds for personal gain; potential misuse of students and post-doctoral fellows; and the circumstances in which under-used capacity in specialized University facilities should be made available to industry.

Comments on the Report of Advisory Group #1:
What is Appropriate Academic Enterprise?

"I suggest replacing rather than revising University Regulation No. 4; in other words, I'd like to see No. 4 repealed and replaced with a new regulation in order to emphasize that our recommended guiding principle is new. For the same reason, I also recommend changing the title of Reg. No. 4. A title more in keeping with the excellent statement of the new guiding principle might be, 'The Transfer and Application of New Knowledge from the University to the Public and Private Sectors.'

"I find the following sentence in paragraph II. 2. of the current regulation ambiguous. It can be interpreted in ways that would be detrimental to the spirit of the proposed guiding principle. Therefore, I suggest it be deleted - 'Commercial research involving controversial elements will be undertaken only at the explicit and unanimous request of representatives of all parties to the controversy.'"

~ Charles Gruder
Executive Director
Special Research Programs
Office of the President

"The report is admirably accurate and representative of the discussion of the group."

~ Stanley Chodorow
Provost
University of Pennsylvania

Suggested the following modifications to the proposed revision to University Regulation No. 4.:

"Notebooks and other original records of the research are the property of the faculty member and the University."

~ Michael E. Phelps
Chair, Department of
Pharmacology - Molecular Medicine
Los Angeles Campus

"I find that not all of the Group's recommendations, even as described on p. 1 of the Report (3. Research that addresses problems that arise from industry and/or that include industrial collaboration) made it into the formal rewording of the Regulation No. 4. Therefore the rewording needs to be further reworded.

~ Kumar Patel
Vice Chancellor of Research
Los Angeles Campus