Provision Language
Article 2. GRANT OF RIGHTS
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2.2 Exclusivity
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(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.
3. COMPANY DILIGENCE OBLIGATIONS
3.1 Diligence Requirements.
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(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.
Article 4. ROYALTIES AND PAYMENT TERMS
4.1 Consideration for Grant of Rights
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(d) Running Royalties
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(ii) Global Access. Royalties shall not be due to M.I.T. on NET SALES made at a COST BASED PRICE in DEVELOPING COUNTRIES. As used in this subsection, the term “COST BASED PRICE” shall mean, in respect of each LICENSED PRODUCT, a price not exceeding that which fairly reflects the direct cost of manufacture of such LICENSED PRODUCT plus a typical margin for a generic pharmaceutical product for the respective market (i.e., priced to enable availability and accessibility to people most in need), as will be mutually agreed by the parties.