Provision Language
Definitions
“FIELD” shall mean treatment and/or prophylaxis of disease in humans.
“PATENT RIGHTS” shall mean:
(a) the United States and international patents listed on Appendix A;
(b) the United States and international patent applications and/or provisional applications listed on Appendix A and the resulting patents;
(c) any patent applications resulting from the provisional applications listed on Appendix A, and any divisional,c ontinuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix A and of such patent applications that result from the provisional applications listed on Appendix A , to the extent the claims are directed to subject matter specifically described in the patent applications listed on Appendix A , and the resulting patents;
(d) any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (a), (b), and (c) above; and
(e) international (non-United States) patent applications and provisional applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisionals, continuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter specifically described in the patents or patent applications referred to in (a), (b), (c), and (d) above, and the resulting patents.
“TERM” shall mean the term of this Agreement, which shall commence on the EFFECTIVE DATE and shall remain in effect until the expiration or abandonment of all issued patents and filed patent applications within the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement.
“TERRITORY” shall mean worldwide.
2. GRANT OF RIGHTS
2.1 License Grants. Subject to the terms of this Agreement, M.I.T. hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license under the PATENT RIGHTS to develop, make, have made, use, sell, offer to sell, lease, and import LICENSED PRODUCTS in the FIELD in the TERRITORY and to develop and perform LICENSED PROCESSES in the FIELD in the TERRITORY.
2.2 Exclusivity
(a) In order to establish an exclusive period for COMPANY, M.I.T. agrees that, subject to Sections 2.2(b) and 2.6, it shall not grant any other license under the PATENT RIGHTS to make, have made, use, sell, lease and import LICENSED PRODUCTS in the FIELD in the TERRITORY or to perform LICENSED PROCESSES in the FIELD in the TERRITORY during the TERM (the “EXCLUSIVE PERIOD“), unless sooner terminated as provided in this Agreement.
(b) If M.I.T. or COMPANY or an AFFILIATE receives a bona fide request from a capable third party for a license under the PATENT RIGHTS to develop and commercialize a LICENSED PRODUCT and/or LICENSED PROCESS at affordable prices in one or more DEVELOPING COUNTRIES that is not being sold (including without limitation sufficient supply to meet market demand at reasonable costs) or diligently developed for sale by COMPANY or an AFFILIATE or SUBLICENSEE in such DEVELOPING COUNTRY(IES), then the party receiving such inquiry shall promptly notify the other party in writing within [**] days of such inquiry (an “INQUIRY NOTICE“), setting forth the type of LICENSED PRODUCT and/or LICENSED PROCESS desired, the commercialization area desired, the name and contact information of the third party, and any other pertinent information.
Within [***] months of such INQUIRY NOTICE, during which time COMPANY may consult with M.I.T. regarding the request, COMPANY shall enter into a sublicense agreement containing commercially reasonable terms and conditions with such third party for the requested LICENSED PRODUCT and/or LICENSED PROCESS in the requested DEVELOPING COUNTRY(IES). If COMPANY does not grant a sublicense under the PATENT RIGHTS to the third party within [***] months of such INQUIRY NOTICE, and M.I.T., at its sole discretion, determines that a sublicense to the third party is reasonable under the totality of the circumstances (taking into account development efforts of COMPANY, AFFILIATES and SUBLICENSEES) to make LICENSED PRODUCTS and/or LICENSED PROCESSES available in DEVELOPING COUNTRIES, then M.I.T. shall have the right to grant a non-exclusive license under the PATENT RIGHTS to such third party for such purposes and shall notify COMPANY of any such license that is granted.
2.3 Limited Term Option to COLLABORATION INVENTIONS.
(a) To the extent that a COLLABORATION INVENTION is available for licensing, and subject to (i) any obligations of M.I.T. to third parties and (ii) the consent of M.I.T.’s Investigator Ram Sasisekharan, M.I.T. hereby grants to COMPANY a first option (the “Option”) to add M.I.T.’s interest in such COLLABORATION INVENTION to this Agreement, by amendment, in accordance with this Section 2.3.
(b) Promptly after the M.I.T. Technology Incensing Office receives disclosure of a COLLABORATION INVENTION, the M.I.T. Technology Licensing Office shall notify COMPANY in writing of the COLLABORATION INVENTION, furnishing COMPANY a copy of the invention disclosure and/or any related patent application(s). Such invention disclosure and any relatedpatent application(s) shall be kept confidential by COMPANY. Notwithstanding the foregoing, M.I.T. shall be under no obligation to file patent applications for any COLLABORATION INVENTION unless COMPANY exercises its Option with respect to such COLLABORATION INVENTION.
(c) COMPANY may exercise its Option to obtain a license to patent rights on such COLLABORATION INVENTIONby notifying M.I.T. thereof in writing within [**] days after M.I.T.’s notice of such COLLABORATION INVENTION (the“Option Period”). If COMPANY does not exercise its Option within the Option Period, COMPANY’S rights under this Section 2.3 shall expire and M.I.T. shall be free to license such COLLABORATION INVENTION to any third party.
(d) For each Option so exercised, COMPANY will pay M.I.T. an Improvement Addition Fee of [**] dollars ($[**]), and shall be responsible for the payment of fees and costs relating to the filing, prosecution and maintenance of the patent rights covering such COLLABORATION INVENTION. Upon COMPANY’s exercise of such right and payment of the fee, the parties shall amend this Agreement to add the patent application(s) covering such COLLABORATION INVENTION under applicable terms and conditions.
2.4 Sublicenses. COMPANY shall have the right to grant sublicenses of its rights under Section 2.1 only during the EXCLUSIVE PERIOD. Such sublicenses may extend past the expiration date of the EXCLUSIVE PERIOD, but any exclusivity of such sublicense shall expire upon the expiration of the EXCLUSIVE PERIOD. COMPANY shall incorporate terms and conditions into its sublicense agreements sufficient to enable COMPANY to comply with this Agreement.
2.5 U.S. Manufacturing. COMPANY agrees that any LICENSED PRODUCTS used or sold in the United States will be manufactured substantially in the United States to the extent required by applicable laws and/or regulations.
2.6 Retained Rights.
(a) Research and Educational Use. M.I.T. retains the right on behalf of itself and all other non-profit research institutions to practice under the PATENT RIGHTS for research, teaching, and educational purposes.
(b) Federal Government. COMPANY acknowledges that the U.S. federal government retains a royalty-free, non- exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C. §§ 201-211 and the regulations promulgated thereunder, as amended, or any successor statutes or regulations.
2.7 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology or patent rights of M.I.T. or any other entity other than the PATENT RIGHTS, regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS.
3. COMPANY DILIGENCE OBLIGATIONS
3.1 Diligence Requirements.
(a) General Diligence Requirements. COMPANY shall use diligent efforts, or shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES reasonably available to the public. Specifically, COMPANY or an AFFILIATE or SUBLICENSEE shall fulfill the following obligations:
(i) Within six (6) months after the EFFECTIVE DATE, COMPANY shall furnish M.I.T. with a written research and development plan describing the major tasks to be achieved in order to bring to market a LICENSED PRODUCT or a LICENSED PROCESS, specifying the number of staff and other resources to be devoted to such commercialization effort.
(ii) Within sixty (60) days after the end of each calendar year, COMPANY shall furnish M.I.T. with a written report (consistent with Section 5.1(a)) on the progress of its efforts during the immediately preceding calendar year to develop and commercialize LICENSED PRODUCTS or LICENSED PROCESSES. The report shall also contain a discussion of intended efforts and sales projections for the year in which the report is submitted.
(iii) COMPANY shall expend (either directly or through AFFILIATES or SUBLICENSEES) at least the amounts set forth below on research toward the development of LICENSED PRODUCTS or LICENSED PROCESSES in each calendar year (pro-rated for partial years) beginning in 2013 and ending with the first commercial sale of a LICENSED PRODUCT.
2013 [**]
[**] [**]
[**] 2016 $1,200,000
2017 and every year thereafter $1,500,000
(iv) By the [**] anniversary of the EFFECTIVE DATE, COMPANY (or an AFFILIATE or SUBLICENSEE) shall [**]. (v) By the [**] anniversary of the EFFECTIVE DATE, COMPANY (or an AFFILIATE or SUBLICENSEE) shall [**]. (vi) By the [**] anniversary of the EFFECTIVE DATE, COMPANY (or an AFFILIATE or SUBLICENSEE) shall [**].
In the event that M.I.T. determines that COMPANY (or an AFFILIATE) has failed to fulfill any of its obligations under this Section 3.1(a), then M.I.T. may treat such failure as a material breach in accordance with Section 12.3(b).
Notwithstanding the foregoing, in the event that COMPANY anticipates a failure to meet an obligation set forth in in Sections 3.1(a)(iv), 3.1(a)(v) or 3.1(a)(vi) due to unexpected technical, adverse events or regulatory difficulties, COMPANY will promptly notify M.I.T. in writing, in advance of the relevant deadline, and representatives of each party will meet to review the reasons for the anticipated failure (taking into accounted delays beyond the reasonable control of COMPANY) and discuss in good faith a potential reasonable revision to the diligence schedule under this Section 3.1(a). COMPANY and M.I.T. will enter into a written amendment to this Agreement with respect to any mutually agreed upon change(s) to the relevant obligation; for clarification, M.I.T. shall have no obligation to agree to amend the diligence obligations hereunder. If the parties are unable to negotiate such an amendment within [**] days from the date of COMPANY’s notification pursuant to this Section, then M.I.T. may treat such failure as a material breach in accordance with Section 12.3(b).
(b) Diligence Requirements for DEVELOPING COUNTRIES. M.I.T. and COMPANY agree that it is an important objective of both parties that LICENSED PRODUCTS and LICENSED PROCESSES be made available in DEVELOPING COUNTRIES on reasonable terms, both with respect to availability of sufficient quantities of LICENSED PRODUCTS and LICENSED PROCESSES and the cost thereof. Specifically, COMPANY or AFFILIATE shall fulfill the following obligations:
(i) Within twelve (12) months after the EFFECTIVE DATE, COMPANY shall furnish M.I.T. with a written development and commercialization plan describing the COMPANY’s strategy for bringing LICENSED PRODUCTS and LICENSED PROCESSES to market in DEVELOPING COUNTRIES in a manner that is designed to enable availability and accessibility at reasonable cost, and shall discuss with M.I.T. the plan and provide an opportunity for M.I.T. to comment on the plan. COMPANY shall use diligent efforts to develop and commercialize LICENSED PRODUCTS and LICENSED PROCESSES in DEVELOPING COUNTRIES in accordance with such plan.
(ii) Within sixty (60) days alter the end of each calendar year, COMPANY shall furnish M.I.T. with a written report on the progress of its efforts during the immediately preceding calendar year to develop and commercialize LICENSED PRODUCTS and LICENSED PROCESSES in DEVELOPING COUNTRIES.
(iii) COMPANY shall use reasonable efforts to either (I) obtain the commitment of its SUBLICENSEES to use diligent efforts to develop and commercialize LICENSED PRODUCTS and LICENSED PROCESSES in DEVELOPING COUNTRIES in a manner that is designed to enable availability and accessibility at reasonable cost, or (II) retain rights to develop and commercialize LICENSED PRODUCTS and LICENSED PROCESSES in DEVELOPING COUNTRIES.
(iv) in the event that a LICENSED PRODUCT and/or LICENSED PROCESS has been approved for commercial sale in an OTHER COUNTRY(IES), but has not been approved for commercial sale in a DEVELOPING COUNTRY(IES), the parties shall promptly meet to discuss, and COMPANY shall commit to M.I.T., in writing with mutually agreed upon timelines (such timelines to be enforceable under this Agreement), that it or an AFFILIATE or SUBLICENSEE will (A) promptly apply for approval for commercial sale of such LICENSED PRODUCT and/or LICENSED PROCESS in such DEVELOPING COUNTRY(IES), and (B) promptly after receiving approval, begin and continue to sell such LICENSED PRODUCT and/or LICENSED PROCESS in such DEVELOPING COUNTRY(IES) at reasonably affordable prices in sufficient volume to meet market demand in such country(ies);
In addition to the remedies set forth in Section 2.2(b) with respect to LICENSED PRODUCTS and LICENSED PROCESSES, in the event COMPANY (or an AFFILIATE or SUBLICENSEE) has failed to fulfill any of its obligations under this Section 3.1(b), M.I.T. may treat such failure as a material reach in accordance with Section 12.3(b), provided that any termination under Section 12.3 for breach of obligations under this Section 3.1(b) shall be limited to COMPANY’s and its AFFILIATE’s licenses and rights under the PATENT RIGHTS for LICENSED PRODUCTS and LICENSED PROCESSES in DEVELOPING COUNTRIES in which such failure has occurred. The termination of COMPANY’s and AFFILIATE’s licenses and rights in such DEVELOPING COUNTRIES for LICENSED PRODUCTS and LICENSED PROCESSES will not affect the remaining terms of this Agreement.
11. GENERAL COMPLIANCE WITH LAWS
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11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible and consistent with prevailing business practices, COMPANY shall mark, and shall cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are manufactured or sold under this Agreement with the number of each issued patent under the PATENT RIGHTS that applies to such LICENSED PRODUCT.