Provision Language
Definitions
The “Least Developed Countries” in Appendix B are:
Africa (34): Angola, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Togo, Uganda, United Republic of Tanzania, Zambia
Asia (14): Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Lao People’s Democratic Republic, Myanmar, Nepal, Samoa, Solomon Islands, Timor-Leste, Tuvalu, Vanuatu, Yemen
Latin America and the Caribbean (1): Haiti
(Source: United Nations Office of the High Representative (UN-OHRLLS) as of October 23, 2013)
6. Royalties and Reimbursement
6.1 The Licensee will require each Sublicensee to pay Licensee, and Licensee agrees to pay IC a noncreditable, nonrefundable Sublicensee issue royalties as set forth in Appendix C.
6.2 The Licensee will require each Sublicensee to pay Licensee, and Licensee agrees to pay IC a minimum Sublicensee annual royalties as set forth in Appendix C.
6.3 The Licensee will require each Sublicensee to pay Licensee, and Licensee agrees to pay IC Sublicensee earned royalties as set forth in Appendix C.
6.4 The Licensee will require each Sublicensee to pay Licensee, and Licensee agrees to pay IC Sublicensee benchmark royalties as set forth in Appendix C.
6.5 A patent or patent application licensed under this Agreement shall cease to fall within the Licensed Patent Rights for the purpose of computing earned royalty payments in any given country on the earliest of the dates that:
(a) the application has been abandoned and not continued;
(b) the patent expires or irrevocably lapses; or
(c) the patent has been held to be invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency.
6.6 No multiple royalties shall be payable because any Licensed Products or Licensed Processes are covered by more than one of the Licensed Patent Rights.
6.7 On sales of Licensed Products by Sublicensees of Licensee made in other than an arms–length transaction, the value of the Net Sales attributed under this Article 6 to this transaction shall be that which would have been received in an arms–length transaction, based on sales of like quantity and quality products on or about the time of this transaction.
Appendix C – Royalties
Royalties:
I. The Licensee agrees to pay to IC a noncreditable, nonrefundable Sublicense issue royalty in the amount of Ten Thousand Dollars ($10,000) within sixty (60) days from the effective date of the grant of each Sublicense for sale of Licensed Products outside of Least Developed Countries.
II. The Licensee agrees to pay to IC a nonrefundable minimum annual royalty for each Sublicensee granted as follows:
(a) Five Thousand Dollars ($5,000) for each year prior to the First Commercial Sale of Licensed Products outside of Least Developed Countries. The first minimum annual royalty is due within sixty (60) days of the effective date of this Agreement and may be prorated according to the fraction of the calendar year remaining between the effective date of this Agreement and the next subsequent January 1; and
(b) Ten Thousand Dollars ($10,000) for each year after the First Commercial Sale of Licensed Products outside of Least Developed Countries. These minimum annual royalties are due and payable within sixty (60) days of January 1 of each calendar year and shall be credited against any earned royalties for the sales made in that year.
(c) Subsequent minimum annual royalty payments are due and payable on January 1 of each calendar year and may be credited against any earned royalties due for sales made in that year.
III. The Licensee agrees to pay IC earned royalties of on Net Sales of Licensed Products in the Licensed Territory by each of its Sublicensee(s) as follows:
(a) When Licensed Patent Rights exist in countries of manufacture or sale:
(1) Zero percent (0.0%) on Net Sales of Licensed Products sold in Least Developed Countries;
(2) Five percent (5.0%) on Net Sales of Licensed Products sold outside of Least Developed Countries.
(b) When Licensed Patent Rights do not exist in countries of manufacture or sale:
(1) Zero percent (0.0%) on Net Sales for Licensed Products based upon Licensed Materials sold in Least Developed Countries;
(2) Two and one–half percent (2.5%) on Net Sales of Licensed Products based upon Licensed Materials sold outside of Least Developed Countries.
IV. For development of Licensed Products by each of its Sublicensees, Licensee agrees to pay IC the Benchmark royalties set forth below. For Benchmarks achieved on or after the effective date of this Agreement, such royalty payment will be due within sixty (60) days of achieving each Benchmark.
1. Zero Dollars ($0.00) upon the initiation (first dosing of first patient) of each Phase I Clinical Trial (or equivalent) with Licensed Product set forth in the Licensed Fields of Use for Licensed Products) in Least Developed Countries.
2. Fifty Thousand Dollars ($50,000) upon the initiation (first dosing of first patient) of each Phase I Clinical Trial (or equivalent) with Licensed Product set forth in the Licensed Fields of Use for Licensed Products) in countries outside of Least Developed Countries.
3. Zero Dollars ($0.00) upon the initiation (first dosing of first patient) of each Phase II Clinical Trial (or equivalent) with Licensed Products set forth in the Licensed Fields of Use) in Least Developed Countries.
4. Seventy–five Thousand Dollars ($75,000) upon the initiation (first dosing of first patient) of each Phase II Clinical Trial (or equivalent) with Licensed Products set forth in the Licensed Fields of Use) in countries outside of Least Developed Countries.
5. Zero Dollars ($0.00) upon the initiation (first dosing of first patient) of each Phase III Clinical Trial (or equivalent) with Licensed Product set forth in the Licensed Field of Use) in Least Developed Countries.
6. One Hundred Thousand Dollars ($100,000) upon the initiation (first dosing of first patient) of each Phase III Clinical Trial (or equivalent) with Licensed Product set forth in the Licensed Field of Use) in countries outside of Least Developed Countries
7. Zero Dollars ($0.00) upon approval of a Biologics License Application (BLA) by a Regulatory Authority in Least Developed Countries.
8. Two Hundred Thousand Dollars ($200,000) upon approval of a Biologics License Application (BLA) by a Regulatory Authority in countries outside of Least Developed Countries.
9. Two Million Dollars ($2,000,000) upon first achievement of cumulative Net Sales of Five Hundred Million Dollars ($500,000,000) in countries outside of Least Developed Countries.
10. Five Million Dollars ($5,000,000) upon first achievement of cumulative Net Sales of One Billion Dollars ($1,000,000,000) in countries outside of Least Developed Countries.
11. Ten Million Dollars ($10,000,000) upon first achievement of cumulative Net Sales of Two Billion Dollars ($2,000,000,000) in countries outside of Least Developed Countries.