Principles Governing Commercial Activities of Harvard University, with application to Partnerships between the University and Outside Organizations
As Approved by the Corporation on September 17, 2001
As the social and economic value of knowledge that universities create increases, so do the opportunities for collaboration between universities and commercial enterprises. Through partnerships with such enterprises, universities can translate their knowledge into socially useful applications, enrich their teaching and research with practical experience, and secure financial returns to support their educational mission. At the same time, commercial activities can pose risks to the core values of universities, notably to their commitment to pursue and disseminate knowledge independent of economic and other extraneous pressures. Public trust in the university as an educational institution committed to the pursuit of truth and advancement of knowledge is critical. The university therefore should seek to ensure any partnerships involving a substantial commercial element, as well as any commercial activities it undertakes on its own, are consistent with these core values.
To this end, Harvard University has established various policies that govern aspects of commercial activities.1 A number of these policies apply to individual members of the University. For example, a University policy on outside activities governs the teaching and research that faculty may perform for other organizations; several schools have conflict-of-interest rules that, for example, limit the equity that faculty members can hold in companies that support their research. Some other policies, such as those involving corporate-sponsored research or technology licensing, are directed at institutional and individual activities of certain kinds. With the increase in the number and variety of opportunities for the University and its units to collaborate with outside partners, the need for a statement of principles focused on institutional arrangements having a commercial dimension has become more evident.
This document provides a summary of such principles. It is directed principally at proposed partnerships with for-profit entities and not-for-profit entities that involve a substantial commercial element. The guiding principles should also be borne in mind when a unit of the University proposes to undertake activities on its own that incorporate a commercial element, for instance, soliciting commercial sponsorship of an academic conference or including commercial advertising in a University publication. However, the document is not intended to address routine purchases of goods and services from other organizations, or investments in the normal course of managing the University's finances. In addition, it is intended to complement, not to supersede, existing policies regarding such matters as the use of the Harvard name, licensing of technology, and sponsored research.
In view of the strong institutional interest in affirming the fundamentally educational, nonprofit nature of the University, proposals for partnerships having a substantial commercial element should be submitted for advance review and approval by the President or the Provost, and in addition by the Corporation when significant new issues of policy are raised. Because such agreements may take a variety of forms and raise a wide range of issues, the general principles stated below do not substitute for thoughtful case-by-case analysis. In order to facilitate the progress of promising proposals, and to allow for issues to be raised in a timely way, units of the University interested in pursuing commercial partnerships should involve the relevant Deans as well as representatives of the President and Provost early in the process.
1. Primacy of the Academic Mission
The University is by nature and by law an educational, not-for-profit institution. The educational and research activities of the University should be, and should appear to be, motivated primarily by a concern for the advancement of knowledge and the pursuit of truth, not by the pursuit of financial reward.
(a) Proposals for Harvard to hold equity in a for-profit venture in education or research should proceed only if the arrangement is best suited to achieving the academic purposes of the proposed activity, and only if the prospective academic benefits of the arrangement clearly outweigh the risks. (Arrangements that involve the holding of equity in a publicly traded company raise special concerns and may require additional review.2)
(b) Proposals to undertake an educational, research, or other activity by creating a for-profit entity under the auspices of the University should proceed only if the same conditions are met.
2. Freedom of Inquiry
The advancement of knowledge depends fundamentally on the ability of individual scholars to formulate ideas and pursue truth free from the influence of commercial considerations. All commercial arrangements, whether with outside organizations or at the university itself, must safeguard the core value of freedom of inquiry. They should, as far as possible, keep the substance of the inquiry separate from its financial consequences.
(a) Agreements should not create financial or other incentives likely to bias the content of teaching and research, or to interfere with the ability of faculty and students to pursue inquiries according to their best professional judgment on the merits.
(b) The cumulative effects of agreements, considered within each Faculty and across the University, should be periodically examined to ensure that the University's priorities for teaching and research remain determined primarily by academic considerations.
(c) The University or its faculty should retain final authority over the academic content of any material produced or distributed by a commercial enterprise with which the University collaborates.
(d) The responsibility for intellectual products should generally be attributed only to the individuals or groups in fact responsible for them. An important purpose of this care in attribution is to avoid any implication that the University or its Schools or departments subscribe to an orthodoxy that might subtly inhibit the freedom of inquiry of other individuals within the institution. For example, individuals rather than departments, centers, Schools, Faculties or Harvard University should generally be designated as the author of publications, reports, statements, Internet postings and other such material.
3. Openness of Inquiry
Agreements with outside enterprises and other commercial activities of the University should preserve an open environment for the conduct of teaching and research and the public dissemination of the results of these activities. In general, students and faculty should be able to share ideas that stimulate scholarly endeavors and to have access to data and documents on which scholarly conclusions are based.
(a) Agreements with outside organizations should permit the results of research and the data or other material on which such research is based to be publicly accessible, including publication in academic journals, subject to the University's established policies and standards of confidentiality and privacy.
(b) Faculty and students should have appropriate access to curricular materials that are produced within the University. For example, licensing agreements for educational materials produced in a School should generally permit the School's own students and faculty, and, to the maximum extent possible, students and faculty across the University, to use those materials as appropriate.
(c) To facilitate the distribution of the products of teaching and research in the University in a manner that respects their integrity, the intellectual property rights of the relevant parties should be expressly recognized in any commercial agreement.3
4. Educational Welfare of Students
The student-faculty relationship lies at the heart of the academic enterprise. Insulating that relationship from inappropriate commercial pressures is vital to the educational welfare of individual students and to the quality of teaching that the institution provides. Care should be taken, in structuring agreements involving a substantial commercial element, not to involve students in ways that would compromise the University's obligation for their educational welfare.
(a) The University should not hold a financial interest in commercial enterprises of its students or former students (for a reasonable period of time after graduation).
(b) Individual students should receive proper credit, and remuneration where appropriate, for their contributions to commercial ventures that the University conducts or into which it enters.
(c) Students should not be subjected to unwelcome solicitation, advertising and other kinds of commercial promotions as a condition of gaining access to services and extracurricular activities for which the University is primarily responsible. For example, students should be able to access, without advertising, University-sponsored web sites for career counseling.
5. Public Trust
Partnerships with outside enterprises and other commercial activities of the University itself should be constituted so as to maintain public confidence in the University as an institution committed to the pursuit of truth and advancement of knowledge. Universities depend on the goodwill and steady support of their alumni, community and government leaders, and many members of the public, who rely on the institutions to uphold standards of academic integrity. The University should therefore scrutinize with special care any agreement that may appear to compromise public trust, even if University officials believe the arrangement does not otherwise jeopardize the integrity of teaching or research. The University should either decline to enter into such an agreement or take effective measures to mitigate these concerns.
(a) Before any agreement with a substantial commercial element is concluded, it is important to assess the potential effects of the proposed agreement on the University's reputation for academic integrity and independence.
(b) The basic terms of any agreement establishing a commercial arrangement should be public, except where necessary to protect privacy or other compelling University interests. The agreement should be transparent in the sense that the explicit terms should reflect the actual purposes and anticipated methods of operation of the enterprise.
(c) The University or its members acting as agents or participants in a partnership should not endorse, or appear to endorse, any commercial products produced by others. For example, core activities of the University (including "harvard.edu" Web sites) should be free from advertising. Additionally, partners' Web sites should keep Harvard-provided content separate from any advertising and should include clear and prominent disclaimers indicating that Harvard does not approve or endorse any products on the site.
(d) Agreements with any commercial enterprise should be consistent with the policy on the use of the Harvard name, and include safeguards that respect the University's trademarks and other intellectual property rights.4
(e) Agreements that create an exclusive arrangement with Harvard are generally discouraged unless they involve a specific technology license or particular sponsored project.
(f) Agreements should have a limited term, and should be periodically subject to review by the University. In general, the initial term should be no longer than five years, and should provide for a review at or before the end of the term.
(g) Agreements should include clear and adequate provisions for termination, in the case of nonperformance or other serious departures from original understandings.
6. Process for Review
Proposed partnerships, and other similar agreements, involving a substantial commercial element should be reviewed and approved in advance by the President or the Provost, and in addition by the Corporation when significant new issues of policy are raised. Representatives of the Provost are available to provide advice regarding any such commercial agreements, with the goal of facilitating such agreements that are consistent with the academic mission of the University.
(a) In reviewing proposed arrangements, the Provost and other University officials shall pay particular attention to the overall impact on the institution, the effects on public trust, and the possibility of serious and irreversible financial risks. When proposals affirm the broad principles stated in this document, it is expected that the Deans of the Faculties and their colleagues will be given broad discretion to pursue arrangements that serve the academic purposes of their respective Faculties.
(b) Drafts of agreements and memoranda of understanding should be discussed with representatives of the Provost as early as possible in the process. The Provost's Office shall also work closely with the Office of the General Counsel (OGC), the relevant Deans of the Faculties, and other University offices that could be helpful.
(c) The Office of the Provost shall maintain summaries and other records of agreements that are approved under these guidelines.
1. The following listing shows examples of Faculty-based policies, adopted and amended from time to time: Arts and Sciences - Policies Relating to Research and Other Professional Activities Within and Outside the University, as voted by the President and Fellows of Harvard College on March 1, 1982, and as amended on July 25, 1987, and May 2, 1995; Guidelines for Research Projects Undertaken in Cooperation with Industry, as voted by the President and Fellows of Harvard College on October 3, 1983; Statement of Policies and Procedures Governing the Use of Human Subjects in Research, as voted by the President and Fellows of Harvard College on December 7, 1981; Business - Report of the Outside Activities Committee, adopted October 22, 1986, and Advisory Statement on Guidelines for Outside Activities, adopted December 20, 1993; Design - Policy on Conflict of Interest and Commitment (undated); Divinity - Policies Relating to Research and Other Professional Activities Within and Outside the University (undated); Education - Policies Relating to Research and Other Professional Activities Within and Outside the University, as voted by the President and Fellows of Harvard College on October 1, 1995, and amended October 29, 1987; Government (Kennedy School) - Statement of Policy on Conflicts of Interest, as adopted on November 2, 1982 and amended by the President and Fellows of Harvard College on July 25, 1987 and May 2, 1995; Law - Policy on Outside Activities (undated) and Guidelines for Reporting Outside Activities of Full-Time Faculty Members, as adopted November 1, 1991; Medicine - Statement on Research Sponsored by Industry, as adopted October 1983 and amended January 1996, Policy on Conflicts of Interest and Commitment, as adopted March 1990 and amended September 1995; Public Health - Policies on Conflict of Interest and Commitment, as adopted on December 13, 1990. The University Statement on Outside Activities of Holders of Academic Appointments, adopted June 2000, is also relevant.
2. Specific technology licensing agreements are governed by the University Procedures for Acceptance, Management and Sale of Licensed-Derived Stock (1997), which limits the circumstances under which Harvard may accept equity as part of a licensing agreement, and which provides that stock shall be sold in an orderly fashion as soon as it is possible in the public market. Distinct from the review of these specific agreements, any equity the University may hold shall be maintained in separate account by the Harvard Management Company and managed and sold according to procedures that insure that decisions are made at arm's length from the Faculty or administrative unit involved in the partnership. The Harvard Management Company follows its existing procedures dealing with issues such as conflict of interest and insider trading.
3. Statement of Policy in Regard to Inventions, Patents, and Copyrights, as adopted by the President and Fellows of Harvard College on November 3, 1975, and amended on March 17, 1986, February 9, 1998, and August 10, 1998.
4. Policy on the Use of Harvard Names and Insignias, as voted by the President and Fellows of Harvard College, February 9, 1998.