Industry sponsored research provides one avenue of accessing  WSU faculty expertise and facility resources. Such sponsored research will be under the direction of the WSU Principal Investigator and should have the promise of advancing knowledge or the state of the art as well as providing learning opportunities for students. Such proposals should be submitted by a WSU principal investigator to the Sponsored Research Administration.

Grants and contracts

Important distinctions must be recognized between grants and contracts - the two principal forms of contractual instruments used in agreements with industrial sponsors.

Grants

A grant is an award of funds by a sponsor to achieve some general or specific purpose. The nature of the relationship between the sponsor and the awardee has not explicitly been defined by law. While a grant is not as exacting in its provisions as a contract, it should be treated with the same respect. A grant from a federal sponsor generally is construed to allow greater discretion than a contract in the conduct of the research and to provide less specificity in the definition of the intended outcome of the research. This greater flexibility often is not as evident in research grants from industrial sponsors. 

Contracts

A contract involves a promise, or set of promises, the performance of which is recognized in law as a duty and obligation and for breach of which the law provides remedies. Each contract document contains a statement of work or a description of the services to be provided. This work statement should be drafted with great care. Failure by the University/contractor to deliver the results anticipated or to perform the work defined in the statement of work is a breach of contract.

Every grant proposal or contract application (including subcontracts to be issued to the university) must be submitted for prior approval through the appropriate university channels before being sent to the proposed sponsor. Agreement formats and requests for proposals (RFP) or quotations (RFQ) offered by industrial sponsors may contain provisions that are inconsistent with the policies of the university or those of the State of Michigan.

It is essential, therefore, that any proposed agreement be reviewed prior to acceptance or initiation of work thereunder. Documents that contractually bind the university can be signed only by a university official authorized to do so.

Faculty members are not authorized to negotiate general terms and conditions of agreements with industry sponsors, but should refer such contract negotiations to the appropriate administrative office. Negotiations regarding the technical statement of work will be carried out by the faculty member, subject to general policies and procedures of the University.

General operating policies

Several general policies regarding university-industry agreements are outlined below. Any situation that appears to deviate from these policies should be brought to the attention of the appropriate administrative office prior to any agreement to or implementation of the deviation.

1. A proposal is any oral or written presentation to a potential industrial or commercial sponsor that provides cost estimates. All proposals require review and coordination through appropriate University administrative offices prior to presentation to the sponsor.
2. Funding: Industrial sponsors are expected to pay the appropriate direct costs associated with their sponsored efforts. Employee benefits will be charged at estimated or actual cost. Unless otherwise authorized by the appropriate University official, full indirect costs must be recovered at the rate established by the University for industry-sponsored grants and contracts.
3. Expenditure of funds: Funds from an industrial sponsor are under the control of the faculty member identified by the sponsor and must be expended for their intended purpose, as delineated in the award document or proposal. A sponsored project account will be established in the University accounting system for this purpose.
4. Any written agreement committing the University to the performance of a sponsored project forms a contractual relationship. All agreements (grants, contracts, subcontracts, cooperative agreements, letters of commitment) require review by the appropriate University offices and must be signed by a University official who has been delegated signatory authority.
5. Reporting: The Project Director is responsible for providing progress reports to the sponsor in accordance with terms of the agreement or, if reporting requirements are not explicitly stipulated, on a reasonable basis.
6. University name: All agreements will require that the sponsor obtain written permission from the university prior to using the University name or trademarks in any advertising or public statement.
7. Publication: The university will not accept any sponsored program which denies the University the right to divulge the source of support or to publish the results of the research. However, the University may agree to a) exclude sponsor-provided privileged information from such publication; b) submit the proposed publication to the sponsor for review prior to publication; c) delay publication for a reasonable period of time to permit patent applications.
8. Products of a sponsor may be used in a test program if requested by the sponsor.
9. Confidentiality: Privileged information, specifically identified as such by the sponsor, may be received under promise of confidentiality for a prescribed period of time.  The safeguarding of such information is primarily the responsibility of the project director. However, agreements for exchange of confidential information (nondisclosure or secrecy agreements) which involve university personnel, acting within the scope of their employment, must be signed by an authorized university official.
10. Title/patents: Provisions regarding access to and ownership of any intellectual property that may result from the research may be included in the agreement entered into by the University and the sponsor. As a general rule, title to all technology developed through a sponsored effort will remain with the university. The sponsor may be granted certain rights to pursue the further development and commercialization of any intellectual property that may arise during the performance of the sponsored project under agreement. Alternatively, the sponsor may be granted a nonexclusive license for the use of such intellectual property. In the event the sponsor obtains a profit from commercial use of the technology, the university expects to receive a reasonable royalty. The university will negotiate specific license terms and conditions with the sponsor upon disclosure of any intellectual property to the sponsor. Provisions regarding licensing terms for the intellectual property rights of the sponsor generally will not be included in grant agreements.

Special care must be exercised in the negotiation and acceptance of research agreements with industry. There are relatively few "standard" provisions for such agreements; the approach of each sponsor to conducting business with the university is often different (even among units of the same corporation). The motivation to sponsor research often is to attain commercial benefits, and therefore, the sponsor may seek to exert more control over the way the research effort is conducted and the manner in which the results are utilized.

Agreement Streamlining Committee, Michigan Universities Commercialization Initiative