Guidelines for the spin-off of companies at ETH Zurich (spin-off guidelines)

Transcription

1 Guidelines for the spin-off of companies at ETH Zurich (spin-off guidelines) dated 1 November 2013 The Vice President for Research and Corporate Relations, based on Art. 10 (4) lit. a Organisationsverordnung ETH Zürich (Organizational Ordinance of ETH Zurich) dated 16 December , hereby issues the following guidelines: 1 Preamble ETH Zurich is dedicated to education, research and the transfer of knowledge and technology. The primary means by which knowledge and technology is transferred is through graduates of ETH Zurich entering the private sector. It is equally important to develop new scientific findings, methods and technologies that will be made accessible to industry and society by means of a direct and effective transfer. The successful use of new knowledge can progress the creation of innovative products and jobs in Switzerland. ETH Zurich also supports in particular the commercial exploitation of research findings by its graduates and staff and the related creation of spin-off companies. The technology transfer office ETH transfer supports ETH Zurich members in this process and ensures that the research freedom and the scientific independence of ETH Zurich members is maintained and that potential conflicts of interest are disclosed. In this respect, an understanding by all ETH Zurich staff members of their responsibility for their own actions is the best prerequisite for working together in a constructive and ethically correct manner (see also Weisungen betreffend Meldungen von Angehörigen der ETH Zürich zu rechtlich und ethisch unkorrektem Verhalten 2 (Instructions on Reports by ETH Zurich Members of Illegal and Unethical Behaviour)). Entrepreneurial dealings and setting up a company is associated with personal risks, in particular of a financial nature. Consequently, the founders take the decision to set up the company and bear the risks associated with this decision, i.e. they are responsible for securing themselves against certain risks where possible. 2 Scope of application These guidelines regulate the commercial exploitation of research findings and the related creation of spin-off companies. They are binding on all ETH Zurich members and on recognized spin-off companies of ETH Zurich. 3 Definition of spin-off company of ETH Zurich A spin-off company of ETH Zurich is defined as a legally independent partnership or corporation that is independent of ETH Zurich, has fulfilled the spin-off criteria according to 4.1 below and has been awarded the label A Spin-off Company of ETH Zurich by ETH Zurich pursuant to 5 below. 1 RSETHZ RSETHZ Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 1

2 4 Recognition as a spin-off company of ETH Zurich 4.1 Prerequisites A legally independent partnership or corporation can be recognized as a spin-off company of ETH Zurich if it fulfils all of the following criteria: a) The company commercially exploits a technology, software and/or know-how developed at ETH Zurich during research, teaching or other activities. A technology, software and/or know-how as defined above can be related to ETH Zurich by means of one or several of the following, for example: an industrial property right (patent, patent application, design, brand etc.); a procedure or device documented by a publication or piece of academic work; a procedure, know-how or a device that is unpublished which is licensed and kept as a business secret; a functional sample / prototype of a device; source or object code of computer programs. General curricular content based on textbooks or similar sources are not sufficient to refer back to ETH Zurich as defined above. The intended commercial exploitation must be of an innovative nature with a link to ETH Zurich or must be clearly connected with an industrial property right of ETH Zurich; b) At least one of the founders is (a)an (former) employee, alumni, student, doctoral student, post-doctoral student or professor of ETH Zurich with a link to the technology, software and/or know-how pursuant to a) above. A founder in this sense is defined as a person who owns part or all of the company and who performs a central operational function (generally in management) within the company; c) The business idea and the business plan are consistent and sustainable; d) The founder and the founding team think and act in an entrepreneurial manner; e) Switzerland as a business location is expected to benefit if the company is successful and f) The company has been in existence for no longer than two years (according to the official entry in the commercial register) as of the date of recognition. 4.2 Procedure and decision-making process The criteria are checked and assessed by ETH transfer. At least one face-to-face meeting is required during the assessment period between a founder and a person at ETH transfer responsible for the spin-off. Generally it is also necessary to include the person/s responsible for the budget from the organizational unit of ETH Zurich 3 from which the technology, software and/or know-how to be exploited commercially by the company stems. 3 In most cases, this is the professor in charge of the organizational unit. Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 2

3 Furthermore, the corresponding documentation (business plan, documents relating to intellectual property and/or publications of ETH Zurich, etc.) must be presented to ETH transfer in order to allow an assessment to be made. The Vice President for Research and Corporate Relations 4 takes the decision regarding recognition further to an application by ETH transfer. Recognized spin-offs can use the label pursuant to 5 below and can request support pursuant to 7 to 10 below. 4.3 Revocation of recognition In the event of a gross breach of these guidelines, failure to comply with agreements with ETH Zurich, intentional or grossly negligent concealment of conflicts of interest pursuant to 6 below, or in the event of any other business practices that are harmful to reputation, the Vice President for Research and Corporate Relations can revoke recognition of the spin-off company. In such a case, any right to use the label pursuant to 5 below and to support pursuant to 7 to 10 below no longer applies, with immediate effect. 5 Use of the spin-off label and the name or logo of ETH Zurich 5.1 Spin-off label Once recognition has been granted, the spin-off company is entitled to add the label A Spin-off Company of ETH Zurich to its name and to use the spin-off logo for as long as the link pursuant to 4.1 a) and b) above is maintained and the company is still recognizable as an entity. The spin-off logo in its current form is available from ETH transfer on request. 5.2 ETH Zurich name and logo The spin-off company is permitted to use the ETH Zurich name only in connection with a reference to a development contribution by or any collaboration with ETH Zurich. Any further use of this name or of the ETH Zurich logo requires special authorization and is generally prohibited in particular on products and/or advertising brochures of the spin-off companies. 6 Conflicts of interest When founding a spin-off company, any conflicts of interest of ETH Zurich employees must be disclosed which relate to their tasks at ETH Zurich on the one hand and their role in or personal interest in the spin-off company on the other hand. In particular it must be ensured that the rights of ETH Zurich to the intellectual property are not breached or abused and that public funding and other Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 3

4 resources (infrastructure, materials, personnel) are not used unless authorized. While ETH Zurich wishes to support entrepreneurship and spin-off companies in particular, any favourable treatment of spin-off companies that distorts the market or contravenes ETH Zurich regulations must at the same time be avoided. 6.1 Role of the founders 5 of spin-off companies If a spin-off company wishes to use intellectual property of ETH Zurich that is protected or not publicly available (business secrets), a corresponding license agreement must be concluded pursuant to 10 below even if such intellectual property was created by the founders themselves before or after the company was founded in the course of their employment at ETH Zurich. Founders working at ETH Zurich can hold a part-time position at ETH Zurich for a limited period after the company is founded and/or a label has been granted and at the same time be involved in the operations of their spin-off company. If the founders are still employed by ETH Zurich after the company is founded, agreements must be concluded pursuant to 11 below if there are overlaps between the tasks performed by the founders for the company on the one hand and for ETH Zurich on the other hand. Any such employment relationship concludes after a maximum period of 3 years. In exceptional cases, the Vice President for Research and Corporate Relations can grant extensions for such employment for a maximum of 2 years at a time. 6.2 Role of professors in spin-off companies A professor who is a member of either the administrative board or of the executive management of a spin-off company of ETH Zurich requires the authorization of the President of ETH Zurich in order to take up this position. The same applies to any professor who wishes, in addition to his/her full employment at ETH Zurich, to carry out other activities in the spin-off company which together with other side employment account for more than one day per week in total (Art. 6 (2) and (3) Professorenverordnung ETH 6 (Professors Ordinance of ETH Zurich)). It is permissible for professors to participate in the company (as a private individual, not using ETH Zurich funding), for example through shares, options, etc. The amount of the participation is not limited. Participations of more than 10% must be reported to the ETH Zurich s executive board and addressed to the Vice President for Research and Corporate Relations for reasons of transparency. The professors are not permitted to gear their research to the needs of the spin-off company or to deliberately create a competitive lead for the company through their research findings that other companies do not have. This does not apply to research findings that have been licensed to the company pursuant to 10 below. 7 Forms of support ETH Zurich can support its recognized spin-off companies in the start-up phase, which for the founders is often characterized by a period of transition from being employed at ETH Zurich to entering self-employment, by means of different contractually agreed measures. 5 See 4.1 b) for the definition of a founder 6 SR Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 4

5 These include among others the lease of offices and laboratories, communication and IT services and the use of infrastructure from ETH Zurich at special rates. When licensing intellectual property of ETH Zurich to the spin-off companies and in the case of cooperation agreements between ETH Zurich and its spin-off companies, licensing terms will be applied in accordance with ETH Zurich that take into consideration the negative free cash flow in the initial years after setting up the company. Indirect subsidization of the spin-off companies by ETH Zurich (e.g. through use of infrastructure at preferential rates) that extends beyond a period of 3 to 4 years after the company is founded is not permissible. Any arrangement for general licensing of intellectual property at conditions other than arm s length conditions is not permissible. For this reason, any support activities and preferential licensing rates will be limited in time in the respective agreements. 7.1 Office/laboratory space For the first two years after founding, spin-off companies can lease or share the use of office and laboratory space at ETH Zurich (including external locations such as at the Technopark Zurich), if available. Provided that ETH Zurich does not need the space for internal purposes, existing lease and shared use agreements can be extended for a further year, i.e. up to a maximum of 3 years after the company is founded. However, there is no entitlement on the part of a recognized spin-off company to lease office or laboratory space from ETH Zurich. The space is leased through the Building and Constructions Infrastructure Division (IB Bauten) at ETH Zurich. The following steps are taken upon initial lease and extension: a) The company or the company founder (if the company has not yet been founded) makes an application to a person at ETH transfer responsible for the spin-off. Any special wishes or agreements with the professorship and/or institutes etc. can be taken into account during this process. b) If the company wishes to use a workspace in an ETH Innovation and Entrepreneurship Lab (ielab), ETH transfer obtains the approval of the ielab manager. c) The person responsible for the spin-off reports the need to the Building and Constructions Infrastructure Division and confirms at the same time that the founder or the company is entitled to lease the corresponding space as a spin-off. At the same time, any confirmations from institutes, departments and the domicile acceptance declaration (if available) or the confirmation of the ielab manager is forwarded. d) If necessary, the Building and Constructions Infrastructure Division looks for corresponding space within ETH Zurich, possibly in agreement with the departments and/or chairs. If a spin-off company has contacted the Building and Constructions Infrastructure Division directly, the Building and Constructions Infrastructure Division verifies the request with ETH transfer. e) The Building and Constructions Infrastructure Division concludes a lease or shared use agreement with the spin-off company. It also issues corresponding rental invoices. The department, institute or professorship does not receive any portion of the rental income, even if the leased space is located in the corresponding areas. For company addresses that contain c/o ETH Zurich, the commercial registry generally requires a domicile acceptance declaration from ETH Zurich for the company. If required, ETH Zurich issues such a domicile acceptance declaration in the name of the company. The domicile acceptance declaration is issued by the Head of the Legal Office at ETH Zurich further to an application by ETH transfer. This is possible before a lease agreement is signed and/or the company is founded provided that the spin-off criteria pursuant to 4 above are met and the following departments responsible are in agreement: Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 5

6 For spaces in an institute of ETH Zurich: institute head and department head For workspaces in an ielab: manager of the ielab For all other spaces: in agreement with the Building and Constructions Infrastructure Division. The rent is based on the rate for customer group 2 7 of ETH Zurich s lease model, but it includes incidental costs, cleaning costs and furniture. Further administrative details regarding the lease can be set out between ETH transfer, the Building and Constructions Infrastructure Division and any other entities concerned. 7.2 Communication and IT services Spin-off companies that lease space from ETH Zurich pursuant to 7.1 above can use communication and IT services of ETH Zurich provided by IT services for the duration of their lease. The cost of using this infrastructure is not included in the rent for the space and is charged additionally. If network services are provided for the spin-off company, all users at the company are subject to the Benutzerordnung für Telematik (BOT) 8 (Acceptable Use Policy for Telematics Resources). A contact person from the spin-off company for IT services is appointed by the company and announced to IT services. If ETH Zurich allocates telephone numbers, IP addresses or *.ethz.ch domain names to the spin-off company, these cannot be retained by the spin-off company after the end of the lease. However, the spin-off company can in principle also use external telephone numbers or domain names even if network services are purchased from IT services. IT services sets out the precise details and the process for using these services in agreement with ETH transfer and the Building and Constructions Infrastructure Division. 7.3 Use of infrastructure The use of infrastructure (devices, equipment etc., but not space) allocated to a professorship at ETH Zurich is regulated by the agreement on the use of infrastructure. Financial compensation for shared use of the infrastructure is charged to the spin-off company by the organizational unit of ETH Zurich and credited to a compensation fund. ETH Zurich s accounting department credits half of this income to the organizational unit responsible and the other half to the executive board of ETH Zurich. Spin-off companies are treated equally to interdisciplinary centres at ETH Zurich that also offer services to external companies (e.g. FIRST, EMEZ). 7 Pursuant to the executive board resolution dated 14 February 2010, lease model for leasing to partner organizations of ETH Zurich and to external parties 8 RSETHZ Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 6

7 The centres are free to grant discounts to spin-off companies. However, such discounts must then apply to all spin-off companies equally. 7.4 Other services Other services, for example the use of a workshop service, require an agreement between the spin-off company and ETH Zurich. This agreement is concluded by the person responsible for the budget of the respective organizational unit on behalf of ETH Zurich. This organizational unit is then also responsible for the terms and conditions of such an agreement. 8 Task of ETH transfer ETH transfer advises the parties interested in setting up a spin-off company with regard to founding the company. The advice constitutes an additional non-binding opinion, and any decision derived from such advice is the responsibility of the company founder or the party acting in connection with founding the company. ETH transfer will keep confidential any plans about founding the company and any business information (such as the business idea, business plan, financial plan, licensing terms and conditions, etc.) that are provided from the spin-off company to ETH Zurichas part of recognizing the spin-off, negotiating and monitoring license agreement, providing advice or other transactions concerning the spin-off or the founders. However, ETH transfer can on a confidential basis provide the organizational units of ETH Zurich directly affected by the company s founding with the information needed to fulfil their tasks. ETH Zurich is also obliged to disclose information to higher-ranking authorities (e.g. ETH Board) upon instruction to do so. 9 Funding ETH Zurich does not offer any direct funding instruments. Instead it supports companies by means of indirect services such as the use of real estate, licensing etc. in accordance with these guidelines. However, it may participate in the spin-off companies in accordance with the prerequisites in 12 below. The Pioneer Fellowship or similar instruments serve to fund promising technologies developed at ETH Zurich and to fund researchers with the potential to become entrepreneurs. Any findings that result from a Pioneer Fellowship are the property of ETH Zurich. This does not constitute an investment in a spin-off company. ETH Zurich will also inform its partner, the venture capitalist Venture Incubator (VI) 9 about all companies that receive the label pursuant to 5 above. It is the responsibility of the spin-off company or the founders to take responsibility for obtaining funding by VI or other investors. 9 The venture capital fund Venture Incubator (VI) Partners was founded at the initiative of McKinsey & Co. by numerous reputable Swiss companies together with ETH Zurich. There is a contractually agreed exchange of information between ETH Zurich and VI. Details are available from ETH transfer on request. Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 7

8 The spin-off company is not entitled to any funding from VI, nor is it obliged to accept an offer from VI. 10 Licensing Licensing of intellectual property is subject to the guidelines for the commercial exploitation of research findings at ETH Zurich (Verwertungsrichtlinien 10 (Financial Exploitation Guidelines)). In particular patent applications, patents, software, material, secret know-how (business secrets), brands and designs can be licensed. Their useby the spin-off company without a valid license or other authorization by ETH Zurich is not permissible. This also applies to findings from a Pioneer Fellowship or other similar instruments. The spin-off company must compensate ETH Zurich in accordance with the value of the licensed intellectual property. The customary market value is determined and the terms and conditions of the compensation are negotiated between ETH transfer and the spin-off company. The final decision of whether the license is concluded at the terms and conditions negotiated is subject to the signatory provided for in accordance with the Verwertungsrichtlinien (Financial Exploitation Guidelines) (as of the date of issuing these guidelines, this is the Vice President for Research and Corporate Relations). 11 Collaborations In compliance with the Forschungsvertragsrichtlinien (Research Contract Guidelines) of ETH Zurich 11, a spin-off company can carry out projects together with ETH Zurich that are of relevance both for academic research at ETH Zurich and for research and development work of the spin-off company. These collaborative projects are regulated in an agreement that sets out in particular the rights to exploitation of the project findings. In the event of conflicts of interest, the Forschungsvertragsrichtlinien (Research Contract Guidelines) provide for special signature rulings for such agreements. Conflicts of interest generally exist if an organizational unit carries out collaborative work with a spinoff company and the person responsible for the budget or other employees in the organizational unit participate in the spin-off company in any way. If the person responsible for the budget at the organizational unit in which such collaborative work is performed holds more than 10% of the share capital of the spin-off company or shares valued at CHF 100,000 or more, the annual accounts and shareholding structure of the spin-off company must be reported to the executive board and addressed to the Vice President for Research and Corporate Relations before entering into such collaborative work. 12 Participation of ETH Zurich in spin-off companies ETH Zurich can participate in spin-off companies under the following conditions: a) Pursuant to the license agreement as part of the license fees or for preliminary investments (e.g. costs spent on patent applications) in order to reduce up-front payments for the spin-off company. 10 RSETHZ RSETHZ Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 8

9 Use of the income from such participations is regulated in the Forschungsvertragsrichtlinien (Research Contract Guidelines) of ETH Zurich; b) In the case of special strategic interest of ETH Zurich, with payment of additional cash (also for example to maintain an existing participation pursuant to a) as part of a capital increase) or by making non-cash contributions, for example rent reductions. Cash is provided by the Vice President for Research and Corporate Relations, while non-cash contributions are made after agreement with the organizational unit making the contribution. The participations are managed centrally in the Vice President for Research and Corporate Relations Domain. Any separate compensation for the organizational unit is determined on a case-by-case basis. The participation form pursuant to letter b) of the paragraph above as well as the decision whether ETH Zurich makes use of purchase rights requires the authorization of both, the Vice President for Research and Corporate Relations and the Vice President for Finance and Controlling. They also decide on the sale of participations unless this is already regulated by law or by contract. 13 Entry into force These guidelines enter into force on 1 November The Richtlinien für die Förderung von Spin-off Firmen (Guidelines for the Promotion of Spin-off Companies) dated 12 July 1994 are hereby revoked. Prof. Dr. Roland Y. Siegwart Vice President Research and Corporate Relations Spin-off guidelines of ETH Zurich dated 1 November 2013 Page 9