NIH – Fluidigm, COVID-19 Diagnostic Development Agreement

Liability | Indemnification & liability

Summary of Approaches

What occurrences could result in a liability claim against which one party will indemnify the other?
- As required under FAR 52.227-3, Fluidigm must indemnify NIH against liability for infringement of any U.S. patent provided that NIH informs Fluidigm in reasonable time of any alleged infringement.
Are there any circumstances under which one party will not indemnify the other?
- The patent infringement indemnity does not apply if Fluidigm was following the instructions of NIH to change its usual supplies, materials or equipment, or if a claim is unreasonably settled without Fluidigm’s participation.
Is there any limitation or monetary cap on each party’s liabilities under the agreement?
- The government will not be liable for more than $12,151,000 if the contract is terminated.

Annotations

This agreement between Fluidigm Corporation (“Fluidigm” or “Contractor”) and the U.S. National Institutes of Health (“NIH” or “Government”) was entered into on July 30, 2020. The agreement is part of NIH’s Rapid Acceleration of Diagnostics Advanced Technology Platforms (“RADx-ATP”) initiative which was created to accelerate innovation, development and commercialization for new COVID-19 diagnostics. The scope of work under the agreement includes completion of validation, approval, and production processes to deliver scaled up capacity for a viable diagnostic product.

The agreement was initiated as a Letter Contract with a fixed price of $12,151,000 to enable expedited timelines. It was converted to a definitive contract through an amendment on September 28, 2020, with a fixed price of $34,016,056. Further amendments were made in February and May 2021.

The tests manufactured under the agreement must be sold within the U.S. unless there is insufficient demand in the U.S. for the tests produced with the additional manufacturing capacity funded under the agreement. Additionally Fluidigm must provide tests to end users at a fair market rate that is consistent with objectives to increase and improve COVID-19 testing in the U.S.. Some other aspects of the agreement, including data and patent ownership are governed by the U.S. Federal Acquisition Regulation (FAR).

Provision Language

SECTION I – CONTRACT CLAUSES

Selections will be made by the Contracting Officer during definitization.

I.1. ADDITIONAL CONTRACT CLAUSES

This contract incorporates the following clauses by reference, (unless otherwise noted), with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available.

[…]

(o) FAR Clause 52.227-3 Patent Indemnity (Apr 1984).

[…]

I.3. ADDITIONAL FAR CONTRACT CLAUSES INCLUDED IN FULL TEXT

a. FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES

[…]

2. FAR 52.216-24 – LIMITATION OF GOVERNMENT LIABILITY (APR 1984)

(a) In performing this contract, the Contractor is not authorized to make expenditures or incur obligations exceeding $12,151,000 dollars.

(b) The maximum amount for which the Government shall be liable if this contract is terminated is $12,151,000 dollars.

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NIH – Fluidigm, COVID-19 Diagnostic Development Agreement

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NIH – Fluidigm, COVID-19 Diagnostic Development Agreement

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