Principles for Managing Competing Interests Between UArizona and Startup Companies

These principles apply to the following situations:

1. You are starting your own company or operating your own startup,
2. You are becoming an employee of a startup while retaining your UArizona employment, or
3. You are becoming a consultant or board member or taking another advisory position at a startup.

For help applying these principles to your own situation or considerations, please contact:  

For University Employees:

1.    University Employees must separate and clearly distinguish UArizona effort from effort on behalf of a company.  UArizona has a fiduciary responsibility to ensure that external influences do not detract from the performance of an individual’s institutional responsibilities. In practice, this means that you must: keep your UArizona work and time separate from your company work and time; have approval for employment at, or commitments to the company; and not pressure University Employees and students to perform work to benefit the company.

2.    All startup companies must have an approved Facility Use Agreement to use UArizona facilities.  For more information about this process, see the UArizona Space Startup Process. Generally, outside entities, including startups, cannot perform work in UArizona facilities, including labs and offices, that are currently being utilized by the UArizona.  Under rare circumstances, a waiver may be approved by the Senior Vice President for Research and Innovation.  Requests for a waiver should be submitted as part of the UArizona Space Startup Process.

3.    University Employees cannot use University Assets for the benefit of outside entities unless the use is first covered by a fully executed use agreement reflecting fair market value or actual costs. Examples of University Assets include, but are not limited to: UArizona name, money (including research funding), proprietary information, supplies, arizona.edu domain, laptops, computers, printers, and lab equipment.

* University Assets is defined in the UArizona’s Misuse of University Assets Policy.

4.     University Employees cannot use UArizona compensated time for efforts to benefit an outside entity.

5.    University Employees may be asked to take a full or partial leave of absence from UArizona, or a revised appointment at UArizona, if their responsibilities or time commitment to the company will impede their institutional responsibilities.  UArizona will determine your requirements when you file a complete COC Form about your Outside Activity.  A COC Form is a requirement prior to UArizona approval for ANY Outside Activities to commence.  University Employees with an FTE of 0.50 or greater must have an approved COC Form for all employment at and commitments to an outside entity. 

When a University Employee will supervise a UArizona subordinate who shares an Outside Interest and/or Outside Activity, Human Resources recommends the following:

• Individuals work with their department chair/supervisor, in consultation with Human Resources, to clearly define the reporting structure for the subordinate employee.

• The job duties and responsibilities of everyone working in the lab should be updated and documented in writing to ensure they are clearly outlined and there is consensus.

• There should be written expectations regarding percentage effort and boundaries for work time, scope of work, and requirements at UArizona versus the outside entity.

• Individuals should work with UArizona officials to clarify the structure and reporting relationship they will have at the outside entity to avoid misunderstanding and conflict. Tech Launch Arizona or the UA Center for Innovation may be resources for support and additional recommendations. 

• If over time, UArizona employees who are, or who may become, involved in the outside entity, are not adequately fulfilling the duties and responsibilities for their UArizona positions, UArizona department leadership will need to lower their UArizona FTEs accordingly.  

• In the above situation, a percentage of effort analysis needs to be performed to confirm that the employees’ allocation of time and duties to UArizona continue to justify at least a .5 FTE position to retain benefits.

6.    University Employees who have an Outside Interest in or Outside Activity at an outside entity cannot continue to work on the licensed IP within the University for the benefit of the outside entity.  Outside Interests and Outside Activity are defined in the University’s Conflicts of Interest & Commitment Policy.  These are important terms that define your responsibilities, and you must ensure you understand them prior to undertaking any external responsibilities with respect to an outside entity.  

7.    University Employees who have an Outside Interest in an outside entity may not receive gifts directly from the entity.  A GIFT is defined as “a voluntary transfer of items of value from a person or organization where no material amount of goods or services are expected, implied or provided to the donor.”  Gifts to the University must be submitted formally through the UA Foundation. 

8.    In some instances, University Employees who have an Outside Interest in a company cannot be the University’s Principal Investigator for research, including human subject research, conducted at the University that is Related To the company's Intellectual Property.  Conflict reviews require two determinations: (1) Is there a Financial Conflict of Interest and/or or Institutional Conflict of Interest? (2) And if so, is that conflict manageable?  This is because certain financial and institutional conflicts of interest are prohibited by Federal law, Federal Agency policies and ABOR policies. (NOTE: "Related To" is a term defined by federal regulations. For more information see What is a Financial Conflict of Interest?)

This restriction does not apply to Phase 1 SBIR/STTR grants that are sponsored by a PHS agency but is applicable to all other SBIR/STTRs. (See NIH’s SBIR and STTR Critical Differences website.)

As a member institution, the University of Arizona has implemented a Rebuttable Presumption in response to guidance from the Association of American Medical Colleges.

9.    University Employees who have a Substantial Interest in a company, as determined by the Financial Services office’s Conflict Official, must not participate on behalf of the University in any purchasing decisions, contracts or sales pertaining to the company, including subcontracting University research to the company. This is prohibited by State law.

10.  University Employees who have an Outside Interest in or Outside Activity at a company may not supervise other University Employees who are Investigators on research funded by that company or involve the company’s personnel in UArizona Research. State and Federal regulations require that UArizona Research cannot appear to be compromised by a University Employee’s significant financial and/or personal interests. 

11.  University Employees may not involve current UArizona staff, trainees, or students, especially individuals they supervise, in a company’s activities unless it has been approved by the Office for Responsible Outside Interests and the individual’s college, and a Conflict of Interest and/or Commitment management plan has been implemented.  As much as possible, company personnel should not be affiliated with UArizona.  The academic activities of students, graduate students, postdoctoral researchers, and other UArizona trainees must be directed in accord with the best interests of the academic progress of these individuals and without regard for the interests of the company.  University Employees must submit a COC Form and receive approval prior to engaging in activities at/for the company.

12.  University Employees do not have authority to license, assign or otherwise transfer rights in any ABOR/University-owned intellectual property without an appropriate UArizona contract or agreement.  As such, University Employees may not provide, as part of any approved Outside Employment or Outside Commitment, access to or use of UArizona databases, research results, patentable inventions, copyright-protected materials, confidential information, materials or products, or other intellectual property in which ABOR claims an ownership interest under ABOR Intellectual Property Policy No. 6-908, without first obtaining a UArizona license agreement, nondisclosure agreement, material transfer agreement or other appropriate contract authorizing such access and use, signed by a duly authorized signatory on behalf of UArizona. 

For University Administrators:

In addition to the above guidelines: 

1.    University Administrators must disclose their personal financial investments, regardless of value, in outside companies, including faculty startup companies, to the Office for Responsible Outside Interests.  The financial interests of individuals who are in a position to make decisions with university-wide implication need to be reviewed to ensure decisions made on behalf of UArizona are not influenced by outside financial interests.  (University Administrators must submit a COC Form for approval of any employment and/or professional commitments to an outside entity.)

2.    University Administrators who have an Outside Interest or Outside Activity in an outside entity, including a faculty startup company, cannot participate in any UArizona employment or research decision affecting the employment of University Employees who have an Outside Interest or Outside Activity in the same company. This creates an Institutional Conflict of Interest because it may appear that the University Administrator’s financial investment is influencing the conduct of Research or business/administrative decisions made on behalf of UArizona.

3.    University Administrators who have an Outside Interest in an outside entity, including a faculty startup company, cannot participate in any decision affecting the University’s business relationships with the company.  This creates an Institutional Conflict of Interest because it may appear that the University Administrator’s financial investment is influencing the conduct of Research or business/administrative decisions made on behalf of UArizona.

For University Students, Graduate Students, Postdoctoral Scholars & University Trainees (“Student Investigators”):

Student Investigators must follow the University’s Conflicts of Interest & Commitment Policy and guidelines, including conflict of interest and commitment disclosures.  All Research conducted at UArizona and under the auspices of UArizona must adhere to the University’s policies and guidelines.  Support for understanding and completing these disclosures can be found on the Office for Responsible Outside Interest’s Students, Postdocs & Trainees webpage or by contacting the Office for Responsible Outside Interests at coi@arizona.edu.