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New York State Ethics Commission
Alfred E. Smith State Office Bldg.
80 South Swan Street, 11th Floor, Suite 1147
Albany, NY 12210


Advisory Opinion No. 04-1:

Application of Public Officers Law  74 to a State employee who wishes to provide an endorsement for a device he invented in which he and his State agency share a pecuniary interest.


INTRODUCTION

The following advisory opinion is issued in response to a request submitted by Paul R. Kietzman ("Kietzman"), General Counsel for the New York State Office of Mental Retardation and Developmental Disabilities ("OMRDD"), who asks to what extent, if any, [ ], an employee of OMRDD, may endorse a device which he created while employed by OMRDD without violating the Public Officers Law.

Pursuant to the authority vested in it by Executive Law  94(15), the New York State Ethics Commission ("Commission") renders its opinion that [the State employee] may serve as a spokesperson for the device provided that he and OMRDD abide by the guidelines set forth in this opinion.

BACKGROUND

In 1998, [the State employee], a [job title] for the [ ] Developmental Disabilities Services Office ("DDSO"), a facility of OMRDD, developed a bracket device for use with bed rails. In 1999, [the State employee], represented by counsel, agreed that the invention was a result of his involvement with the issue of bed safety on behalf of OMRDD and, therefore, entered into an agreement whereby he assigned the rights to the invention to OMRDD and agreed to share the royalties in accordance with the agency's approved patent policy, pursuant to Public Officers Law  64-a.1

OMRDD intended for its closely affiliated Research Foundation to find a potential licensee who would be interested in marketing the invention but this was never accomplished.

Through 2000 and 2001, [the State employee] contacted the Commissioner of OMRDD and others, and argued that his invention should be used because it was a significant safety improvement. As a result, in an agreement approved by the Office of the New York State Comptroller, OMRDD transferred the rights to the device back to [the State employee], but OMRDD retained the right to receive 50% of the royalties if the invention was further developed and commercialized.

In the Fall of 2002, [the State employee] filed a patent application for the device; it is now pending before the United States Patent and Trademark Office. [The State employee] has also found a potential licensee/co-venturer interested in manufacturing and selling the device: [ ]Manufacturing Company, a privately held company in [ ]. [The company] has a reputation for producing hospital pediatric cribs and youth beds, including the [ ] Bed, which is currently used by OMRDD, its DDSO's and a number of OMRDD's voluntary providers. In his capacity as [job title] and as a bed rail safety expert for OMRDD, [the State employee] has often been asked to comment on and recommend appropriate beds for consumers.

In February 2003, [ ], the President of [the company], [the State employee] and [ ], an attorney with OMRDD, met to discuss the marketing of the device. [The company president] is interested in the device but would like to use [the State employee] as a spokesperson in order to market and sell the device.2 [The State employee] has agreed that if he is permitted to endorse the product he will not identify himself as an employee of New York State or OMRDD, but only as an individual who specializes in bed safety for a public-sector agency that oversees services to developmentally disabled individuals.

Kietzman believes that the marketing of this device has potential value to New York State in royalty income and will benefit consumers in need of the safety device; he reports that OMRDD favors [the State employee] being allowed to endorse the device.

APPLICABLE STATUTES

Public Officers Law  74 sets forth the Code of Ethics for State officers and employees.

The rule with respect to conflicts of interest, contained in Public Officers Law  74(2), states:

No officer or employee of a state agency . . .  should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.

Public Officers Law  74(3) provides standards of conduct:

. . . .

(d) No officer or employee of a state agency. . . should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.

. . . .

(h) An officer or employee of a state agency. . .  should endeavor to pursue a course of conduct which will not raise suspicion among the public that he is likely to be engaged in acts that are in violation of his trust.

DISCUSSION

Section 74 addresses not only actual conflicts of interest but also conduct that gives rise to the appearance of a conflict. The code addresses the conflict between the obligation of public service and private, often personal, financial interest. The present case is unique in that [the State employee] created the bracket device as a result of his work on behalf of OMRDD, and he and ORMDD have agreed to share royalties from it. Thus, an endorsement of the device by [the State employee] that fairly describes its merits is in the State's interest, as well as his own. Compare Advisory Opinion No. 96-21 (discussing the ethical obligations of a State employee who wrote a book on his own time related to his public duties).

Under the unique circumstances of this case, the Commission finds nothing objectionable in what is proposed [the State employee] serving as spokesperson for the device and identifying himself as a specialist in bed safety employed by a public agency that oversees services to developmentally disabled individuals. There are, however, two ethical restrictions that must be adhered to so as to avoid the potential for a conflict of interest. First, as OMRDD and [the State employee] will benefit from the sales of the device, providers that are regulated and licensed by OMRDD should not feel in any way compelled to purchase the bed rail. Thus, neither [the State employee] nor OMRDD should receive any royalties or other forms of compensation from sales to OMRDD licensed and regulated providers. Second, given that OMRDD and its DDSO's use the [ ] Bed, [the State employee] should not comment or make any recommendations regarding the [ ] Bed or any other product [the company] manufactures, as the appearance of a conflict would be created between his State duties and his private financial interest if he were to do so [see, Public Officers Law  74(3)(d)].

CONCLUSION

The Commission concludes that [the State employee] may endorse the bracket device provided that he does not place OMRDD's or the State's imprimatur on the endorsement and that he and OMRDD adhere to the conditions expressed in this opinion.

This opinion, unless and until amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All Concur:

Paul Shechtman, Chair
Robert J. Giuffra, Jr.
Carl H. Loewenson, Jr.
Lynn Millane
Susan E. Shepard, Members

Dated: January 29, 2004


End notes

1.  This section of law permits a State agency to establish a patent policy, with the approval of the State Comptroller and the Director of the Division of the Budget, which authorizes additional compensation or royalties to a State employee.

2. Kietzman cites as an example a similar endorsement used in the marketing of a pediatric crib called the [ ]Critical Care Crib developed by a Dr. [ ], of [ ], who appears in [the company's] promotional videos.

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