IX. Patent Rights
IX.8 March-in Rights. Janssen agrees that, with respect to any Subject Invention in which it has acquired title, the Government may request Janssen, an assignee, or exclusive licensee of a Subject Invention to grant a non-exclusive license, within the Field of use to a responsible US-based third party licensee, upon terms that are reasonable under the circumstances. If Janssen, assignee, or exclusive licensee initially refuses such a request, the Government may obligate Janssen to grant such a license subject to Article IX, Section 8(c) below if the Government determines that:
a. Such action is necessary because Janssen or assignee has not taken steps (or is not expected to take within a reasonable time), consistent with the intent of this Project Agreement, to achieve Practical Application of the Subject Invention; or
b. Such action is necessary to alleviate the following urgent health or safety needs not reasonably satisfied by the contractor that affect the United States and that are not reasonably satisfied by Janssen, assignee, or their licensees:
(i) declaration for Public Health Emergency by the Secretary of the Government;
(ii) determination that there is a significant potential for a public Health emergency that has a significant potential to affect the national security or public health of U.S. citizens as determined by the Secretary of the Government; or
(iii) declaration by WHO Director General of a public health emergency of international concern.
c. Where the circumstances described in Article IX, Section 8(a) and or (b) are met, Janssen will act promptly to negotiate in good faith with the responsible US-based third party a non-exclusive license on terms that are reasonable under the circumstances under the SI Intellectual Property Rights it controls at the time to make, have made, use, sell, offer for sale and import the relevant Subject Invention in the Field to the extent necessary to alleviate the public health emergency in the United States.
XIX. General Provisions
XIX.7 Failure to Provide Prototype Product
1. In recognition of the Government’s need to provide sufficient quantities of a safe and effective Prototype Product to protect the United States population, the Government shall have the remedy described in this section to ensure sufficient supply of the Prototype Product to meet the needs of the public health or national security when the following conditions are met:
a. Janssen gives written notice (which it hereby agrees to do) to the Government no later than 15 business days following:
(i) except as permitted under Article I, Section 3 or in connection with a termination of this Project Agreement under Article II, Section 2 above, any formal management decision to terminate manufacturing of the Prototype Product prior to delivery of 100 million Regimens of the Prototype Product to USG; or
(ii) except as permitted under Article I, Section 3 or in connection with a termination of this Project Agreement under Article II, Section 2 above, any formal management decision to discontinue sale of the Prototype Product to the Government prior to delivery of 100 million Regimens of the Prototype Product to USG; or
(iii) any filing that anticipates Federal bankruptcy protection of Janssen prior to the delivery of 100 million Regimens of the Prototype Product; and
(i) is authorized to supply the Prototype Product under an Emergency Use Authorization under §564 of the FD&C Act; or
(ii) has an FDA approval to market the Prototype Product in the U.S. under the provisions of §351(a) of the Public Health Service Act (PHSA).
2. If both conditions listed in subsection (1) occur, Janssen, during the emergency pandemic for COVID-19 issued under §319 of the PHSA, upon the written request of the Government, will act promptly to license a Third-Party Licensee all Janssen Prototype Product Rights on reasonable terms for the continuation and/or initiation of manufacturing of the Prototype Project at the Government’s expense.
3. This Article will survive the acquisition or merger of Janssen with a third party. This Article will survive the expiration of this Project Agreement unless the Project Agreement was terminated under Article II, Section 2(a).
“Field” means the development and use of a vaccine to protect against COVID-19 disease caused by SARS-CoV-2 infection.
“Third-Party Licensee” means US-based entity whose primary business is contract manufacturing for third parties, and is not currently or in the future controlled or affiliated with any entity or business that sells vaccines or pharmaceutical products directly to consumers, pharmacies, health care providers or Governmental entities.
“Prototype Product” means Janssen’s demonstration of its capacity to perform large scale manufacturing domestically, utilizing the Janssen Manufacturing Capability of up to 100 million Regimens of Ad26.COV2.S.