5.6.7 Institutional Conflicts
Institutional Conflicts occur when the Institute has a financial stake in the outcome of its research programs or licensed technology. The Conflict may arise out of an equity interest in a start-up that licenses technology from the Institute or in the nature of royalties to be earned from licensing such technology. For example, the Institute may benefit from Georgia Tech Research Corporation’s equity in licensees, as equity is often taken in lieu of royalties or other license fees, this may create Institutional Conflicts for several reasons:
- Owners of equity may cash out prior to product going to market, creating a situation under which the Georgia Tech Research Corporation may have an enhanced position relative to other shareholders;
- The equity interest could have substantial value if the technology is successfully commercialized, creating a more apparent
Georgia Tech Research Corporation should be permitted to take stock in Licensee Companies that do not have the financial resources to make full license payments but, as with Employees, Georgia Tech Research Corporation must avoid the appearance of Conflicts of Interest in research programs, education, or business transactions. Therefore equity should not be held in significant amounts to confer management power in companies, and ownership interests in companies should be disclosed.
Review and approval may be provided by the Conflict of Interest Review Committee.