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NOVEMBER 29, 2005

Regular Meeting No. 8 of the 52nd Session

Present:  Chair Allen, Secretary Bruck, Past Chair Daley, Parliamentarian Corbin; Senators Baynes, Blair, Blank, Branoff, Clark, Culbreth, Fikry, Gustke, Hanley-Bowdoin, Hudson, Kellner, Khosla, Kinsella, Krotee, Lindbo, Martin, Moore, Overton, Robarge, Schultheis, Scotford, R. Smith, Tetro, Williams, Wessels, Yencho

Excused: Provost Nielsen: Senators Dawes, Fahmy, B. Smith, Johnson, 

Absent:  Senators Banks-Lee, Brownie, Fauntleroy, Hooper, Young

Visitors:   Chancellor Oblinger; Katie Perry, Senior Vice Provost; P.J. Teal, Secretary of the University, Suzanne Weiner, Library Administration, Melissa Watkins, Chair of the Staff Senate, Thomas Conway, Dean, Undergraduate Academic Program; Ellis Cowling, University Distinguished Professor At-Large; Kevin MacNaughton, Facilities; Lee Fowler, Athletic Director; John Gilligan, Vice Chancellor of Research and Graduate Studies;

1.  Call to Order
Chair Nina Strömgren Allen called the eighth meeting of the fifty-second session of the North Carolina State University Faculty Senate to order at 3:00 p.m.

2. Welcome and Announcements
Chair Allen welcomed Senators and Guests.

Chair Allen reminded the Senators that President-Elect Erskine Bowles would be speaking at the General Faculty Meeting on February 14. 

Chair Allen announced that she attended a strategic planning meeting this morning and noted that it was very interesting to see what our strategic plan is shaping up to be.

3. Approval of the Minutes, Meeting No. 7, November 15, 2005
The motion passed unanimously to approve the minutes.

4. Memorial Statement for Professor Robert Burns
Dean Malecha from the College of Design read a memorial statement in honor of Professor Robert Burns who passed away on October 28, 2005 in a tragic automobile accident.

5. Remarks from Chancellor Oblinger
Chancellor Oblinger stated that he wanted to show the senators an eight-minute DVD giving a broad overview of expenditures, and the bond status.

Chancellor Oblinger stated that given the number of times that he has talked about the inconveniences generated by the bond programs and the parking challenges, as well as some of the positive feelings that

have been received from students, faculty, and staff impacted by that bond program he thought he would show an eight-minute DVD that was shown to the Board of Trustees.  He noted that Kevin MacNaughton, Associate Vice Chancellor for Facilities is responsible for keeping this program going.  The DVD contains a mix of pictures, dates, completions, and dedication dates. 

I would like to share a few other items with you not the least of which would be an update on the strategic plan and how the faculty will not only see it but also have an opportunity to give input. 

Chancellor Oblinger stated that we have a lion’s share 63% expended and that means committed and underway or completed as well as another 19% under contract.  You will see some of the remaining projects that have yet to be undertaken that are part of the bond project. 

The next slide gives you a summarization of what I was talking about in terms of capital construction on this campus over the last several years totaling some $858M; $468M as it relates to the bond and non bond projects as gifted buildings like we dedicated approximately ten days ago, the Friday Institute.  You will see the Joyner Visitor Center that will be dedicated in March.  We will also dedicate the Dorothy and Roy Parks Alumni Building on Centennial Campus in April.  Those are gifted buildings.  As you know the Wolf Pack Club has supported the development of many athletic facilities. 

Many of you and certainly all of your deans have had input on additional capital needs on this campus, which is shared there in the additional $826M that we do not have but we have identified needs and applications of those numbers of dollars to our capital infrastructure needs and then beyond that an additional $681M.  My point here is to show you that there is over planning taking place and that we have a lot yet to do in the future but I can’t help but wonder what we would be like now and into the near future if we had not undertaken above that first red illustration of the total. 

Please remember that was put together to illustrate to the trustees what had transpired over time.

You saw portions of this slide when I was here before about what we were going to recommend to the trustees.  The next step in this process is to present this case to the Board of Governors who will in February decide whether or not this is the additional campus initiated tuition structure that we would have.  It is three hundred and twenty-five dollars across the board in all categories of students, that would be undergraduates, graduates, in state and out of state; an increase in fees of $90.60 and, in three professional programs an increase over and above what you see posted above that thousand dollar figure in the school of architecture in the College of Design as well as the professional program in graphic design also in the College of Design.  The professional programs have to be supported by the students impacted.  Dean Malecha did a wonderful job presenting to the trustees and those elements of either fee or tuition increases were passed by the Board of Trustees and are now in General Administration. 

We did have the opportunity on the sixteenth of November to spend the entire day with President-Elect Bowles.  Many faculty, staff, and students had the opportunity to interact with the President-Elect.  He came very well prepared.  He certainly had done his homework about NC State University.  He reflected that ours was the only mission statement that talked about economic development and the statewide impact of that economic development.  He knew facts and figures.  He is very numbers driven which is

meant to be a positive statement.  He wants to be very supportive.  He emphasized staff and stated that it means that the General Administration is here to serve you.  It is here to support your aspirations as an institution and that is what I pledge to do.  I believe that he was very sincere and up front in all of his questioning and I do believe that he will be exceptional to work with.  I will tell you that his first priority is faculty salaries.  The students ask him three questions.  The three items were the student vote in the Board of Governors, the status of tuition increases that were being proposed and the predictability of tuition.  He is in favor of the student vote in the Board of Governors.  He understands the tuition situation.  He explained about the federal budget and the state budget and he closed after he explained the pressures on both of those budgets.  He said as students you just need to expect that tuition is going to increase and he said but I assure you as the President that we will not take that duty likely, we will not overdo it.  We will do it with full discussion like we have had on this campus every since we have had that opportunity to propose campus initiated tuition increases and he indicated that he had studied the word practicable and thought he knew what it meant.  He thought he knew what it meant when the constitution was drafted and he thought he knew what it meant now. I think the visit went very well.  Not only has he agreed to do the introductory remarks at the February 14 General Faculty Meeting but he has also agreed to take two trips that we are aware of.  We have already given him the itinerary of one out in the eastern part of the state that would show our cooperation with Carolina and Duke and it relates to Marine Sciences and Cooperative Extension. We would plan and hope to take him to the western part of the state where we also have facilities with tenure track faculty present and get him out into the Asheville area so that he can see truly the reach, the depth, and the breath of NC State University and he is eager to do that. 

I would like to commend the Senate leadership on what I think is a first and it deals with the way you are attempting to communicate with faculty at-large relative to posting on the web an Executive Summary.  I appreciate your willingness to do that and I thank you.

We have not revised the strategic plan on this campus since 1995 and it is a very strong feeling of mine that we ought to do so particularly with a new president coming on line.  We ought to state unequivocally what our territory is and how we plan to do it and the kind of support that we need to perform the way we are use to performing. 

We had quite an extensive conversation about research extensive universities and I do feel strongly that he understands that every institution has aspirational goals.  Every institution in the system and he is responsible for every single one of them.  I am also convinced that we are not all going to be treated the same way and therefore it behooves us to not only give him the material that we gave him and a white paper that talks about those aspirational goals but to present him fairly early in his term as President with an updated strategic plan for NC State University and I hope that you will agree with me on that and I hope that you will provide input. 

The last thing that I would like to mention is one that deals with the heart of the university and I couldn’t agree more with what Marvin said about Bob Burns.  I will share on a very personal note that he was the first administrator I got to know because I came here, as Associate Dean and he was already an Associate Dean.  He befriended me and showed me where some of those buttons on campus were and was a tremendous asset to all of us and he will be solely missed. He will live on in the minds of many.

Congratulations to Linda Hanley-Bowdoin on becoming an American Association Academy of Sciences Fellow.  She is a William Neal Reynolds Distinguished Professor of Biochemical and Genetics and the other individual that was recognized as well was Dr. Michael Purugganan who is also a William Neal Reynolds Distinguished Professor of Genetics.

Senator Baynes stated that with regards to the research building he sees that the budget came in at $49M at CVM.  He wanted to know if that was within budget or over budget?

Associate Vice Chancellor MacNaughton stated that this bond program could not have been timed at a better moment in time in that we hit a market place back in 2001 that was basically flat on its back.  Every project at the front end of our program came in well below budget.  We are now taking those savings that we accrued on the front end and putting them on the back end of the project because the construction industry has awakened and we are seeing fairly elevated prices.  We have commodities issues.  We have the localized market here in the Triangle.  We have Chapel Hill, Central, Wake County Public Schools, and the Convention Center, a lot of competition so we are seeing a real tight market place right now.

Senator Baynes wanted to know the start and completion date for Carmichael Student Recreation.

Associate Vice Chancellor MacNaughton stated that they are looking to start the construction at the beginning of 2006, which will be an eighteen-month project.

6. Remarks from John Gilligan, Vice Chancellor for Research & Graduate Studies
You saw the sources of funds that came from the bonds or athletics and other sources, some of those sources were F&A funds generated by faculty research process either committed from the college or my office that went toward those buildings and so there is some significant money going into those structures that are specifically dedicated to research. 

Intellectual Property and Commercialization Process

Approximately 20% of our faculty are engaged in some kind of involvement of disclosure of their intellectual property in order to create a possible mention of patents and they are interested in what happens with that at the back end.  I have just provided new leadership for the Office of Technology Transfer.  About two weeks ago I put Dr Dave Winwood in charge of tech transfer again.  He was previously in charge of Tech Transfer from 2000-2002 prior to going to Ohio State.  I hired him back in terms of responsibility for Centennial Campus and now in addition to Centennial Campus he will also have Tech Transfer.  In particular it was something that was needed, his experience on the commercialization side and also his problem solving side because he is a facilitator and he wants to look beyond the boundaries of an individual office and get problems solved and I think he is going to be a welcomed addition to that office.  He is well known throughout the country in his circle and I think he will be a contributor to that process. 

When you look at our patent and license activity over the past years it has been very good.  You will see it in our Results Magazine that will be coming out soon.  It shows the number of disclosures made by our faculty, the number of patents filed, and the number of patents issued.  It also shows the licenses from our patents that we generate to the industry and the number of starting companies that comes out of the minds of our faculty.  We have been doing very well and I think when you look at the numbers it shows.  The only thing that is not doing well is our revenue.  It tends to go up; we had a big spike when we had the big contribution from the Textile project and Humanities and Social Sciences.  We have gotten up to $7.0M in one year and then things started to turn around after the dot com BUST and now we are pulling in about $3.0M per year.

Industry funding is very unique at NC State.  We are always in the top ten in the country in the amount of industry coming to do research with our faculty.  It is between thirty-five and forty million dollars a year so we are unique in that sense.  For the size of the university that we are without a medical school this is a very strong position so we have close interactions with industry and that tends to drive our interest in the commercialization process because industry is interested in spitting out, licensing, and building things and putting them in the market place and that is what our faculty do here at NC State.  I think the bottom line is that the purpose of tech transfer in this whole process is really building partnerships on the research side because that is what those companies want.  The reason why we are in this business other than the fact that we are supposed to do it by federal government is because we build partnerships with industries. We bring in three to four million dollars per year.  Essentially forty percent of that goes back to the inventors so about $1.6M goes back to the inventors.  We have some very successful inventors on our campus.  The remainder is used to support the running of that office and doing the legal work outside the university.   That is really the kind of involvement that we have as a university with regards to building these partnerships with industry and spending out new companies and its relationship to research on our campus.

Questions from the Executive Committee

How does the Tech Transfer Program work to facilitate the academic mission of the university?

It is a service to the research mission because of its tie in with the research funding and therefore academically it is attached to the research mission through that coupling. It doesn’t have an academic mission in and of itself although industry would like for you to publish anything.  The first thing that they put in their clauses when it comes to these industry contracts is you can’t publish anything.  We take that out.  It is not the Tech Transfer Office that does that it is the Office of Sponsored Programs that has specialists in negotiating these industry contracts.  We do approximately three hundred of these industry contracts per year that are finished.  Industry in general does not want you to publish because they want to protect everything that they possibly can and not get it out to the competitors so in terms of the academic mission we want to maintain the capability to publish everything for our students and for the faculty and we are dead set against any restrictions that we have along those lines so in terms of the academic mission that is a poor rule that we have.  In support of the academic mission that is key.

The next question has to do with the concern for the majority of the responsibility for financing and marketing of patents is left with the individual faculty member.

Yes and no.  If we had more money coming in from licenses and revenues like that we could be more speculative in terms of processing patents.  It costs about $20,000 to get each US patent through the legal.  Twenty thousand dollars doesn’t sound like a lot to an individual but when you add it up over those sixty or eighty patent applications we have per year it gets to be quite a sum of money so we have to be very selective in how we speculatively invest our dollars in terms of going after those patents.  It is a combination of making those judgments that we have to rely on our experts in those areas.   If we have a company that you know you are working with on a research grant many times they will be willing to fund that patent cost as part of the deal and we can negotiate that up front.  So to say that faculty are left on their own, well it is either going to have to be the company that funds that or money coming from everyone else in that money coming into the university or if you have additional sources of money it is an alternative way of doing it.  I don’t think that you are being left out at least in this question that was raised.  We do speculate and we do pay for patent cost. 

What are the tech transfer obligations in terms of investment of time and money to promote patents?

Well that is their job.  That is where they spend all their time estimating the value of those patents, talking with companies trying to make sure that if we do invest in that patent it is going to yield some kind of license to a company on down the road because otherwise what good is a patent without a way to get it into the marketplace so that is really what we have to go on.

There is concern about how the office deals with student co-inventor issues with respect to distribution of royalties and in agreements.

I’m not sure what that question means except that students are treated exactly like faculty when it comes to inventions.  They get the same royalty share.  They get the same ownership capability and rights as anyone else so students are part of the whole mix.

Collaborations with industry are often hindered rather than furthered by the office.  There is a concern with too much of one-size fits all modes of IP negotiations, whether it is a one day or five year agreement.  The corporation seems to be treated with the same level of legal requirements.

I don’t think that is entirely true but you do have to worry about precedence and you do have to worry well if you accept it for this one person or group everybody else wants that same deal especially if it’s a small deal, a small amount of time and a small amount of money.  The big guys who gets lots of money and do it over a longer period of time are going to want the same deal or better so this is business when it gets down to the core of it and there is some concern about setting precedence but I will tell you that each deal is looked at individually and a lot of things come into play here in terms of how these negotiations are done.   Actually this is not a tech transfer question.  This is an industry negotiation question.  We have our specialist; Richard Best is head of the group that does the industry negotiations.  

How is the process of the review of invention disclosures handled?

Fill out the form.  The form is very simple.  Invention disclosure goes to your department head, then to the dean’s office, and then to the Intellectual Property Committee.  They along with the staff of Tech Transfer and the lawyers that we have on assignment review all the invention disclosures and decide if they look liable and make a decision as to whether we want to, in fact, it is NC State property meaning that it was done with our equipment, in our laboratories and you as a result of being an employee here the university has ownership rights to that.  Therefore once that is decided it is turned over to the staff member and they start pursuing the licensing of patent cost issue and then eventually getting it licensed.  The Intellectual Property Committee is the first group of faculty that reviews that with the advice of the staff.

How is the Intellectual Property Committee selected?

I appoint them because of their expertise and their ability to review material and their time of dedication for the process which is a significant amount of work that they have to put in to looking at all of those disclosures.   I make sure that there is representation to cover all the areas that are needed and to make sure that these people are fair.

It seems that often the Office of Technology Transfers delays decisions on paperwork for many weeks to the detriment of faculty and students.  In some cases funding opportunities are lost due to the actions of the Office of Technology Transfers.  What methods are used to ensure timely responses to faculty needs?  How can these be improved to eliminate the current long delays experience in dealing with these issues?

I assume that he is talking about industry funded research negotiations.  Again it may not even be a tech transfer issue, it may be a negotiations issue.  It does take time to do an industry negotiation.  It may take a few weeks or a few months.  Occasionally they take longer than that for some fundamental reason.  I guarantee you that its usually not something as simple as what royalty rate or license rate that we are going to charge to an industry or unit if they license our stuff, that is not where it gets hung up.  It usually gets hung up in something like publications, liability, things that are much more general and much more broad than a tech transfer issue per say.  Occasionally we will have two or three per year that we did not do because the industry will refuse to go along with any reasonable terms.  The whole idea is to protect the faculty and students here.  There is no incentive to delay this.  We want the research dollars coming into the university.  We want the F & A dollars coming and we want the licenses going out.   

It seems that OTT often acts without regard to legitimate needs and concerns of faculty and students.

Again I am not sure if it is OTT that he is really talking about here. 

Who oversees the OTT to ensure that the best interest of the university as a whole including the students, faculty, and research sponsors are served? 

Vice Chancellor Gilligan response was, “I do that.”

How does the overseer balance the financial aspects of tech transfer and IP against the legitimate educational mission of the university?

We always try to make sure that we have full publication rights, a reasonable amount of protection for our IP that is produced.  We are not demanding any large amounts of royalty, funding, licensing, rates or anything like that out of the norm.  We are well within the kind of norms for getting the kind of support for our faculty and student inventors that they need. 

Questions from the Senate

Senator Yencho wanted to know the university’s policy on protecting their inventions and policing royalty revenues making sure that the industry that we work with report honestly.

Vice Chancellor Gilligan stated that two and a half years ago he started an enforcement division within the Office of Tech and Transfers.  “We have two people that are hired specifically to go after groups that owe us money or are in the rears.  When it comes to trying to make sure that companies pay us the correct amount that is a tough question because we have to rely to a large degree on what the company says that they make.  We have gone after a couple of those.  It is expensive because we have to hire investigators and auditors to go and work with the company.   We include in the language that we have the right to audit all the books in the company to make sure that we are getting our fair share.”

Senator Clark stated that he develops instructional materials.  “Here they are telling me that I have to pay royalty to these students that I‘ve had to work for hire.  A lot of your unwritten rules and the National Science Foundation, NIH expect that money that deals especially with materials to stay in the university but now you are telling me that I need to pay royalties to these students.  Could you elaborate on that?”

Suzanne Weiner stated that those items should have been referred to the Copyright Committee.  She is surprised that a decision was made without consulting them.

Vice Chancellor Gilligan stated that it is work for hire but it really needs to go to that committee first for them to review.

Senator Clark wanted to know in terms of the negotiation of contracts, what part of input do we have as faculty when that process goes on. 

Vice Chancellor Gillgan stated that faculty should be involved as advisors and noted that there is a conflict there at some point where you can’t be involved. 

Senator Robarge wanted to know how many applications are reviewed and what percentage of applications is turned down.  “Do you think that is sufficient for this campus or is there a large number of faculty who are not even considering the patent process at all?”

Vice Chancellor Gilligan stated that we are consistent based on the number of disclosures that we receive.  The patent applications are more than one hundred twenty but we have to be selective and the number of patents actually issued is forty-five or fifty.

Senator Tetro wanted to know if there is an attorney on staff.

Vice Chancellor Gillgan stated that they have had an attorney in the past but because of the specialties needed having one attorney on staff is not going to be able to cover all the science and technology we have here so it has to be dedicated to a specific area.  He doesn’t know of any office in the country that has its own offsite attorneys. 

Senator Baynes wanted to know if NC State goes after international patents.

Vice Chancellor Gilligan responded yes.  They try to get the US patents first and depending upon the technology you are talking ten to fifteen per country so you have to be pretty selective in what you do there as well.

Senator Moore asked, “How much of your department’s operating budget do you have to generate as opposed to what comes from the university?”

Vice Chancellor Gilligan responded that most of his budget is provided from the flow of licenses and royalties that come back.  Some of it comes from F&A money because some of the work is contract negotiation so it is related to research.  Money comes in life that is becoming larger because of the financial strains that this office has right now so we are supplementing the office from F&A funds in order to perform these research functions related to contract negotiations.  “We cannot use state money for this purpose.  We can use F&A dollars if they are properly coded to contribute to the research process in general so I am doing more of that now.”

Senator Hanley-Bowdoin stated that she thinks what is being said is that all the intellectual property have financial value.  She has been in a situation where she was asked by a private foundation to insure that the work that they are doing is being protected so that it doesn’t get locked up by a company and so that it will be available to third world developing countries, which is where it is most valuable.  There is a case where the cost of protecting the information may well not ever be recovered financially by development here in the US but it is a part of what she hopes would be our larger mission to provide solutions to serious problems around the world.  Senator Hanley-Bowdoin thinks there need to be some consideration in the way this office is funded that there could be a growing requirement to insure that the university own intellectual property so that it would be available for groups of people where it may not otherwise be available.  “Agencies are asking for that.”

Senator Martin asked Vice Chancellor Gilligan to comment on the post patent activity.

Vice Chancellor Gilligan stated that the job of the staff along with the faculty member is to go out and search to find out where those markets are.   “We can always hire more staff members in order to search out those markets and it is a matter of time and money when you get down to it.”

Senator Baynes stated that he has spent the past two months with students whose jobs were to take several of their patents to the market. 

Vice Chancellor Gilligan stated that every faculty member feels that his work is worth ten million dollars and he can understand that because they have put a lot of work into it.  “We feel the same way but it is time and money in getting that done but that is certainly the goal of the organization."

7. New Business
Senator Martin stated that one issue of new business that was discussed at the Executive Committee, which was inspired by a discussion from the Staff Senate, is they suggested that it might be wise for the Faculty Senate to also initiate a legislative affairs committee patterned after what they are doing in the Staff Senate.  Anyone who is interested in exploring a possibility should contact either him or Chair Allen.

8. Reports
Faculty Assembly
Immediate Past Chair Daley reported that each university reported on how they handled the budget reductions at their school.  Another item distributed was the Board of Governors strategic direction.  They updated the six strategic directions that they already had and added a seventh strategic direction in economic transformation.  The item that prompted the most attention was their addition to the preamble; the leadership of each campus is to align campus-planning efforts to these strategic directions adopted by the Board of Governors. Implication is that there is going to be a lot more monitoring at individual campuses to see that their strategic plans fit into what the system wants us to. 

Emphasis was placed on health care benefits, why the legislature didn’t do anything this last session.  There is a bill that is still alive and there is hope to try to get them to do something positive about the benefit package. 

One other item that was discussed:  Their system is based entirely on budget and faculty FTE’s.  Over the last year 475 new faculty positions were added to the system.  Only eleven of those are at NC State,

which puts up in the same category as NC A&T, Elizabeth City State, and UNC Pembroke.  Appalachian State, Fayetteville State, Asheville, and Charlotte have two to three times as many new faculty positions as NC State.  Chapel Hill, excluding the medical school had twice as many new positions as we did.  Past Chair Daley stated that he thinks we have to emphasize in terms of how we are going to be able to do things in the future.  If we are not filling these lines and getting new positions we are not going to be competitive in a number of areas where the growth is and we want to grow research dollars and teaching things. 

Chair Allen stated that she received a number of emails from faculty in her department (Botany) asking that we keep asking to see if we can get that 25% help for staff and faculty.  She noted that it is a benefit that would be wonderful.

9. Adjournment
Chair Allen adjourned the meeting at 4:35 p.m.

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