The case of Nottingham vs Dr Fishel (right) highlights the need for clear guidelines governing academics' commercial pursuits, if talent is not to be driven out. Steve Farrar reports.
There are many academics who will greet Nottingham University's courtroom victory over former academic Simon Fishel with discomfort. For when the in vitro fertilisation pioneer finally hears how much he will have to pay out to his former employer - likely to be decided in April - they will all be able to imagine one day having to write out similarly painful cheques.
It seems that many United Kingdom scholars who have followed the national trend to make commercial connections - consultancies, spin-off companies or industrial sponsorship - may be stumbling into the same contractual minefield as Dr Fishel.
Analysts say that this is because many leading universities and academics often prefer to turn a blind eye to how the details of individual private practices and employment contracts might run contrary to each other.
While usually this laissez faire approach works well with all parties benefiting, Nottingham University vs Dr Fishel is a reminder that when relationships sour, the implications can be serious.
The judgment upheld Dr Fishel's reputation as a researcher and did not support his former university's catalogue of claims against him.
The ruling delivered by Mr Justice Elias at the High Court on Friday found the infertility expert liable for breach of duty in making profit from treatment carried out abroad by embryologists working under his supervision. He was also found liable for breach of contract, though the judge found that this did not cause a loss to the university so there was no award for damages.
Mr Justice Elias said Dr Fishel's superior knew that he was profiting from this work and that his actions had benefited the Nurture infertility clinic, which he directed at the university from 1991 to 1997.
The case will still cost Dr Fishel dearly - a substantial part of the profits he earned through the efforts of his staff abroad plus a share of combined legal costs estimated at more than Pounds 1 million.The university is unlikely to recoup its costs.
The case shows that Nottingham had the will tenaciously to pursue a former employee for privately earned profits. It also reveals the potential cost of discovering that apparently acceptable and open commercial involvement may run counter to the wording of a contract of employment.
Both Dr Fishel and the lawyers for Nottingham University claim to have won the moral victory.
Clive Robertson, head of litigation at Lawford and Co, the university's legal representatives, insisted after the case that Nottingham had been prompted to take the matter to court only after the extent of Dr Fishel's work abroad had emerged following his resignation.
"It was important for the university to pursue the whole case as a matter of principle - it's a question of openness on and sharing the rewards of outside work," said Mr Robertson.
He said Nottingham's regulations governing commercial activity that Dr Fishel had run foul of were tight - although the judge had said they were sometimes ill-defined - while the situation at other universities was often slacker.
In many cases Mr Robertson said, the informal internal procedures that many institutions rely on might not stand up to scrutiny in a courtroom. This might be a good time for universities to review their contractual relationships with senior staff as the opportunity for academics to earn very substantial outside incomes continues to grow.
Clearer rules are needed to encourage commercial liaisons while making sure a fair share returns to the institution, said Mr Robertson.
"Across the sector there is uncertainty and vagueness that ought to be addressed - it is surprising a case of this nature has not appeared before now," he said.
Dr Fishel rejected the suggestion that Nottingham's procedures were straightforward. The judge accepted his claims in court that he believed he had in effect been given the required authority by the dean of the medical faculty, though the ruling did not accept this as an excuse for breaking the specific requirements of his contract.
"The present system only works well because problems are not brought to light," said Dr Fishel. "Had I not resigned and declined to take up the chair that Nottingham offered to me, everybody would have been absolutely happy and delighted with all the benefits they were gaining from this work abroad."
When the relationship collapsed, Dr Fishel felt picked on by the university administration. He said they had used a procedural Achilles heel that he had not realised existed to "get at" him.
Furthermore, Dr Fishel was sad that the ruling had sent a signal to academics that while they could pursue commercial work and keep the proceeds, they could not involve junior colleagues.
Peter Lux, Dr Fishel's solicitor, said his client's position was far from unique.
"There are other people at Nottingham doing consultancy work without the right permission, and they are living in fear of a knock on the door from the administration," said Mr Lux.
He said this sort of dispute was likely to become more common as the boundary between academic research and commercial work got increasingly blurred.
However, he felt that Nottingham had taken a particularly aggressive line with Dr Fishel and that there were internal systems that could have dealt with the situation far more effectively.
Many institutions tended to rely on informal procedures to deal with conflicts of interest that emerge from commercialisation, according to Brian Rappert, a sociologist at the science and technology studies unit at the University of York.
"In some of the more high-status universities we have gone to, we have found those in management have an almost distinct desire not to know the issues and academics who are still not aware of what the policies are," he said.
"You find tacit agreements between individuals, departments and industrial liaison officers. There are a lot of ways in which people distance themselves from the more formal rules."
Those universities that do turn a blind eye assume that they are benefiting from the arrangement, in terms of research revenue, prestige research and potential student placements.
The systems vary greatly from institution to institution. Some, especially among the former polytechnics, keen to keep a tight rein on their staff with formal regulations concerning commercial work.
It is a chaotic arrangement that David Triesman, general secretary of the Association of University Teachers, would like to see reformed.
Mr Triesman has been calling for a national framework agreement to establish how profits from outside work should be divided.
"We could establish the principles for quantifying the amount a university contributes and the amount an individual contributes and allow for some local variation," he said.
Universities clearly do not want to discourage their staff from working with industry and
everyone recognises that a clampdown would be suicide, triggering a catastrophic brain drain not only to other countries but also into industry.
But the institutions want their share of the proceeds too.
In the United States, many institutions are looking at the legal implications of potential conflicts of interest and at how such disputes can be resolved.
Nottingham University and Dr Fishel both said they had tried to settle the row before proceedings began. Both claims their proposals were rejected.
The outcome of their legal battle is likely to spark a similar debate in Britain in an attempt to avoid future courtroom clashes.