How separate should faculty start-ups be as university spin-offs?

faculty startup; faculty research; university startup; autm technology transferI am a former patent examiner and registered patent attorney.  I worked as a Technology Transfer Specialist in the Office of Research at my alma mater, the University of Illinois Urbana Champaign.  I managed the College of Engineering’s technology.  I went on to become Old Dominion University’s Director of Intellectual Property and Research Compliance.  Many research universities take equity share ownership in and provide supporting resources to faculty members that the university has encouraged to venture out and start up a technology based business involving their research on campus.

Andrew Campbell’s May 26, 2014 Harvard Business Review article entitled “How Separate Should a Corporate Spin-Off Be?” intrigued me.  Campbell cited large corporate examples including Shell, BAT, Virgin Group and Unilever.  But, it strikes me as a question that should and often is considered with respect to research universities and their faculty’s small corporate spin offs.

When businesses set up a separate business unit, David Campbell posed the following questions:

  • Which corporate policies should apply to the new division and which should not?

With university faculty start-ups, many of the university’s policies still apply to the faculty member since the faculty is still on staff.  Many university’s follow business ethics policies such as the American Association of University Professors (AAUP) Statement on Corporate Funding of Academic Research adopted by the Association’s Council in November 2004.  This Statement mentions problems that arise when universities actively encourage faculty members to form private research companies to promote licensing of innovations.  The AAUP states that a faculty member’s entrepreneurial instincts may lead her to try to identify and patent discoveries that will have a payoff and “[t]he danger exists that universities will be so assimilated into society that [they] ..must guard against being harnessed directly to social purposes in any way that undermines the fundamental character of the university”.  Thus, a university’s culture and policies related to its vision of its ivory tower role would have to be taken into consideration!

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By Clovia Hamilton, MBA JD – President Lemongrass Consulting

(c) 2014. All Rights Reserved. Lemongrass Consulting, Inc.


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