Policy on Private Use of Washington University Research Facilities

Effective Date: January 20, 2000

Research facilities owned by the university may sometimes be made available for use by or for the benefit of other parties. While these arrangements are often mutually beneficial, there are certain situations in which this practice can present serious problems for the institution.

This policy sets forth a procedure to ensure that use of our facilities will be in compliance with applicable requirements of the IRS and federal agencies. The need for this policy is dictated by the potential tax consequences and possible penalties from NIH, NSF or other federal granting and contracting agencies if these requirements are not observed. Please note: the policy is not intended to exclude the private use of space, because these arrangements are often desirable for the departments, school and the University. It is intended to ensure that such use is disclosed fully so that any inadvertent, adverse consequences can be addressed.

1. Use of Washington University research facilities in any of the following situations require the approval of: the Department Head (where appropriate) and the Dean who has oversight responsibility for the University programs taking place in the facility:
   1. Use of Washington University's research facilities by one or more of our employees to operate a trade or business not owned or operated by the University.
   2. Use of any research facility by individuals not employed by the University or by for-profit organizations not owned or controlled by the University ("private parties").
   3. Use of space for research sponsored by private parties in which the sponsor obtains rights to any resulting technology or other intellectual property (IP) solely on the basis of the research support. That is, it is required that the sponsor will have to pay a competitive price for licensing the IP.
2. Requests for use of University research facilities will be evaluated on a case-by-case basis. The following are among the factors to be considered in this regard:
   1. Whether the use somehow advances University research efforts. If the use of the space or equipment by a private party is to advance one or more research projects conducted by the University, then approval is more likely. However, there must be a direct benefit of the use of the particular space to a specific, clearly identifiable research objective of the University. For this purpose, an offer or agreement by the sponsor to pay rent or other sums for the use of the facility is irrelevant, even if the payments can be used to support the research.
   2. How was the facility financed? The most important factor in determining use of any Washington University space by or for the benefit of a private party is whether the facility has been financed in whole or in part of the tax exempt debt and/or by direct or indirect costs from federal grants. If so, it needs to be determined if such use constitutes "private use" in excess of limits placed by the tax code and/or if the use is permitted under federal guidelines for federally-sponsored research space. The applicable regulation, particularly those of the IRS, are enormously complex, as are the financing arrangements for many of our facilities. Use of research space in violation of applicable tax and/or grant requirements can have enormously unfavorable consequences to the institution. Therefore, such requests must be approved by the relevant Department Head and/or Dean.
   3. Duration and scope of the use. Use of a facility for a long-term or permanent basis will be approved rarely. Sporadic use of laboratory space or a piece of equipment will generally be less difficult to approve.
3. If a request is approved, use of the facility by or for the benefit of a private party may not be commenced or continued unless a written agreement is signed by the private party and the University, in the persons of both the relevant Department Head and Dean.

Footnote, Section 1.C: There is no requirement to seek competitive bids. However, there must be a reasonable expectation that the price to be paid by the sponsor is in line with the price other parties would be willing to pay for the same rights. For this purpose, the price to be paid by the sponsor must be determined after the technology is available for use. That is, the price will not be competitive if it is negotiated at the same time as the research agreement, or, in general, before it is possible to evaluate the commercial potential of resulting technology.