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Policies Affecting Agreements with Industry

See descriptions of policies related to industry agreements.

UC Office of the President policies for working with industry can be found at the UCOP website.

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Principals Regarding Future Research Results

The University’s Principles Policy establishes the fundamental parameters for negotiating to address the University’s rights and obligations regarding future University research results.

Publication

A fundamental principle of the University is to establish an open teaching and research environment so that ideas can be exchanged freely among faculty and students. The University's research activities are an integral part of the total educational program, and often form the basis for peer-reviewed scholarly articles, seminar reports, presentations at professional conferences, and student dissertations and theses. Therefore, the University will conduct research or studies only if the scientific results can be published or otherwise promptly disseminated. Copyrights and publication rights belong to the University and/or the author.

Patents and Other Intellectual Property

The University's intellectual property policies aim to promote the progress of science and technology, to ensure that discoveries and inventions are used to benefit the public, to provide appropriate royalty revenues to the University and the inventor(s), and to support University research and education through invention-related income.

The University retains full patent rights from its sponsored research, and any invention or patentable idea conceived and reduced to practice by University employees in the conduct of a research project belongs to the University. The University may grant to the industry sponsor a time-limited first right to negotiate an exclusive or commercial nonexclusive license, based upon the level of sponsor support. Because the University is a California state university, its inventions are considered real property of the State of California. Therefore, the University follows U.S. Patent Law in the determination of inventorship, and ownership follows inventorship.

To streamline licensing terms and obtain upfront licenses under an industry-sponsored research agreement, companies are invited to review our Innovation Zone Program.

Preparing Budgets with Full Costs

When preparing and presenting proposed budgets to industry sponsors, Principal Investigators must ensure that the budget applies the full indirect cost rate for industry sponsored research agreements and industry funded clinical trials . Draft and preliminary budgets that exclude the applicable indirect cost rates lead industry sponsors to expect a lower overall cost for the research. Such under-funded budgets may lead to reductions in direct costs, revisions to the scope of work for the anticipated research project, and/or delays in the execution of the agreement.

Payments

As a non-profit public entity, the University is unable to work in arrears on privately funded projects. Rather, the University needs to ensure that it has received sufficient funds from the industry sponsor in advance of incurring such expenses and obligations. Therefore, it is the University’s expectation that it will receive, at a minimum, an initial payment upon execution of an agreement. Industry-sponsored projects are performed on a "no-profit--no loss" basis.

Termination of Funding Agreement

In the event a funding agreement is terminated by the industry sponsor for any reason, the sponsor will reimburse the University for all costs incurred to the date of termination and for all uncancellable obligations for cost reimburseable agreements. Agreements that include fixed-priced deliverables dictate the expectation that regardless of the Universities actual expenses, the payment from sponsors is tied to the performance of defined deliverables.

Use of the University's Name

Under no circumstances shall a sponsor be permitted to state or imply in any publication or other published announcement that the University has approved any product that is or might be manufactured, sold, or otherwise distributed. The sponsor also may not use the University’s name and logo in connection with any advertisement, press release, or other form of business promotion or publicity, or reference an existing research agreement, without its prior written approval per California Education Code, Section 92000 as outlined in UCOP references to policies under “Use of University’s Name”.

Liability, Risk, and Best Efforts

Since research by its nature is unpredictable and without guarantee of successful results, University research is conducted on a "best efforts" basis.

The University does not profit on its research. For this reason, and also because it is inconsistent with the best efforts principle, the University is unable to accept contract provisions that guarantee results, impose penalties for failure to make progress by firm deadlines, or provide for withholding of payment if the industry sponsor is not satisfied with the results.

The University may negotiate indemnification clauses appropriate for the project and agreement, in accordance with UCOP policies regarding indemnification. The University cannot accept 3rd party liability.

In certain clinical research projects, the industry sponsor may be requested to share or cover the medical costs of any human subject injured in the performance of the research.

Conflict of Interest (COI)

700-U: Statement of Economic Interests for Principal Investigators

The University has its own Conflict of Interest policies that conforms to applicable conflict of interest regulations, including but not limited to those set forth in by the Fair 3 Political Practices Commission (FPPC) under the State of California. Refer to the University’s policy on conflicts of interest which includes a description of the Principal Investigator’s responsibilities .

Agreements will not be signed until the COI office has determined that there is no conflict or that a conflict has been appropriately managed.

Indirect Costs (IDC) for Industry

UC Policy on IDC

UC policy mandates that an industry sponsor  must cover the full direct and indirect costs of the project. Please note that this policy applies even if the University is receiving the industry funds through a pass-through entity.

For-profit industry sponsors must be charged the full IDC rate applicable to the type of research or clinical trial listed on the UC San Diego Indirect Cost Rates table.

Why IDC Matters

Indirect costs are real costs incurred by the University to acquire and maintain its buildings and equipment, and to provide operational support. These support services include maintenance and operations (utilities, janitorial services, police services, etc.), library operations and administrative services. All of these costs are real, and without them, the University could not exist.

Full cost recovery is necessary to support the University’s physical and administrative capacity to perform research. When indirect costs are not fully recovered, maintaining the University’s research capabilities and infrastructure is compromised.

Since indirect costs are, in essence, actual costs, a reduction of indirect cost rates (or exempting certain costs) on funds received from for-profit organizations in support of research performed at the University are considered a gift of public funds (ex. federal or state funding) for private benefit, as the industry sponsor is not reimbursing the full cost of the project. Without full indirect cost recovery, the University is subsidizing the cost of the project for the sponsor; this is contrary to our public benefit principle and may jeopardize UCSD’s tax-exempt status.

Industry Funded Clinical Trials

Refer to guidance regarding the application of IDC for Industry Funded Clinical Trials.

Waiver of Indirect Costs for Industry Sponsors

Any exception to collecting full IDC from Industry Sponsors can only be approved by the Chancellor, after consultation with the Vice Chancellor for Research and the Assistant Vice Chancellor Contracts & Grants. As a general rule, the University expects for-profit sponsors to pay the full applicable indirect cost rate regardless of the for-profit sponsor’s own policy, as this ensures coverage of all applicable facilities and administrative costs borne by the University.

Industry Funded Fellowships, Scholars, and Educational Grants

For more information, contact our main desk at 858-534-3330 or email ocgainfo@ucsd.edu