4.0 Faculty Rights and Responsibilities
4.4 Conflict of Interest
The Institute's concern with conflict of interest has grown with the increasing complexity of our society, the variety of our relations with each other and with outside institutions, and a heightened national sensitivity to these issues. Some questions on conflict of interest arise from outside professional activities of the faculty and staff and have been addressed in preceding sections. Others, in the more traditional meaning of conflict of interest, derive from the opportunities an individual may have because of his or her position at the Institute to influence MIT's relationship with an outside organization in ways that would lead directly to the individual's personal financial gain.
In response to these concerns, the Institute has adopted the following statement of policy: It is the policy of the Institute that its officers, faculty, staff, and others acting on its behalf have the obligation to avoid ethical, legal, financial, or other conflicts of interest and to ensure that their activities and interests do not conflict with their obligations to the Institute or its welfare. Essential to effective administration and adherence to this policy are
- disclosure of outside activities and interests to designated Institute officers, including financial interests, that might give rise to conflicts; and
- readily available advice and counsel to individuals and to Institute department heads on any situation.
Accordingly, members and officers of the Corporation, Institute senior officers, and other members of the staff in a position to make decisions favoring one or another outside interest should annually acknowledge in writing their knowledge of this policy and either affirm that they have no interest, direct or indirect, in conflict with the Institute's interest, or identify any interests that have the potential for conflict. Members of the Faculty should provide similar information to their department heads, as part of their annual report of their outside professional activities. Certain faculty and staff are subject to investigator disclosure requirements by federal agencies. In those cases, the specific policy should be obtained from the Director of the Office of Sponsored Programs or the Vice President for Research.
There are situations sufficiently complex that judgments may differ as to whether there is or may be a conflict of interest, and individuals may inadvertently place themselves in situations where conflict exists. Accordingly, anyone with a personal interest that may have the potential for conflict with the interests or welfare of the Institute should seek advice and guidance by reviewing the circumstances with the department head, center or laboratory director (who, in the case of sponsored research, should consult with the Director of the Office of Sponsored Programs, or other such person as may be designated by the President. The Faculty Committee on Outside Professional Activities is available for consultation in doubtful situations or those of unusual complexity.
Other potential conflicts of interest may arise from opportunities that an individual may have to influence or to be influenced improperly by personal relationships, in ways that are not consistent with the education and employment policies and the principles to which MIT is committed. Potential conflicts of interest of a particularly sensitive nature may arise out of sexual relationships, especially in the context of educational or employment supervision and evaluation. Because the effects on other people at work or in the classroom are frequently not apparent to the persons involved in a sexual relationship, anyone with such an involvement should be attentive to the feelings of colleagues and to the potential conflicts of interest that may be involved. (See also Section 7.2 Policy on Employment of Members of the Same Family.)
Members of the Institute community may choose to seek advice on these personal questions from their department heads, the Human Resources staff, Medical Department staff, the Ombuds Office, or other counseling resources of the Institute. In addition to these resources, students also have available to assist them their faculty advisors, the faculty in residence, and the counseling resources of the Office of the Dean for Student Life and the Office of the Dean for Graduate Education.
4.4.1 Guidelines for Licensing and Equity Ownership
When companies license MIT inventions or other intellectual property, situations may arise that pose a conflict of interest for faculty and staff. Normally, this happens when they make decisions while fulfilling their MIT responsibilities that might materially affect their personal wealth or that of their immediate family members. Sometimes these conflicts can be managed; sometimes they must be avoided. These guidelines are intended as reminders of situations where conflicts may arise and suggestions for how to manage or avoid them. They are intended to be guidelines for thinking about conflicts rather than rules that cover all possible situations. Generally, prior full disclosure to an appropriate supervisor is the safest policy to follow.
The potential for conflicts is greater for those in managerial or supervisory positions (e.g., supervisors of students, department heads, laboratory/center directors, deans, and other officers of the Institute), but conflict of interest situations can arise for anyone. Staff in the Technology Licensing Office need to be especially diligent to avoid conflicts of interest, and they have their own guidelines in the Guide to the Ownership, Distribution and Commercial Development of MIT Technology. All members of the MIT community should consult with an appropriate supervisor when it appears there may be a conflict. In some cases, this may not be an immediate supervisor.
Conflicts can also arise in connection with performing outside professional activities related to licensing and intellectual property (see Section 4.5 Outside Professional Activities).
Individuals in managerial or supervisory positions should be aware that there may be personal legal and tax implications resulting from investing in companies that are based on MIT technology and that are founded by faculty, staff, or students under their supervision. (See §4958 Excess Benefit Transactions of the Internal Revenue Code.)
Equity Ownership in Companies: Conflicts most commonly arise when a new company licenses MIT intellectual property, but can also occur when MIT intellectual property is not involved.
During the time that companies are still privately held, managers and supervisors, including supervisors of students, should not invest personally or own stock in business ventures of their subordinates or students, since there is a conflict of interest between the manager's supervision of the student or subordinate (e.g., assigning grades, approving promotions, determining salary levels, allocating space, etc.) and the manager's business partnership with the student or subordinate.
Faculty — particularly department heads and laboratory/center directors — have a special responsibility with respect to questions of determining ownership of intellectual property from research by investigators whom they supervise. All faculty and staff should weigh carefully their and the inventor's obligations to MIT in deciding whether the invention falls under MIT ownership. It is a direct conflict if a faculty member, department head, or laboratory/center director responsible for determining the ownership of intellectual property intends to invest in or be a co-founder of a company with the inventor.
It is a conflict for an investigator/inventor to negotiate with MIT regarding the terms of a license before the matter of ownership has been definitively resolved. Faculty and staff who are founding companies should not personally negotiate the licensing terms with MIT. An attorney or a company executive with no connection to MIT should be appointed for this task.
Faculty and staff who own equity in a company should not attempt to influence the licensing terms that MIT offers to the company.
Faculty and staff who hold board positions with companies should recuse themselves on issues involving licensing terms with MIT.
Consulting: Faculty and staff who consult should remember that their primary employer is MIT and that they have a heightened responsibility to their primary employer when deciding whether to assign their inventions to MIT or to a company for whom they consult. If they have questions about the MIT policy on ownership, they should consult with their department head or appropriate supervisor when deciding to whom the invention should be assigned. (See Section 4.5 Outside Professional Activities).
Sponsored Research: It is a conflict for MIT faculty or staff to accept research sponsorship from a company in which they have a significant financial interest. The conflict arises because the outcome of the research could materially affect the personal wealth of the researcher or an immediate family member. This policy should not prevent an investigator from receiving research support from a large publicly held company just because the researcher or a family member owns some shares in the company. [For further information, please refer to the entire section on Conflict of Interest (4.4).]