Question
From:(redacted)
Sent:Tuesday,October 25, 2005 11:22 AM
To:Verne,B. Michael
Cc:(redacted)
Subject: HSRReportability of License Agreement
Mike:
This is toconfirm that you indicated this morning that the transaction described belowwould not be considered an "exclusive" license for purposes of HSRreportability. I would appreciate it if you could get back to me if myunderstanding is not correct. (Redacted) and I appreciate your assistance.
Brand pharmaceutical company ("Brand") is entering into an agreementto license two drugs, ABC Drug and XYZ Drug, to Generic pharmaceutical company("Generic"). The principal question presented by the agreement iswhether a pharmaceutical license qualifies as "exclusive" for HSRreporting purposes when the licensor retains full rights (e.g., to manufacture,use, offer for sale, sell, market, import and have imported) to the brandversion of the drug and the licensee acquires rights only with respect to ageneric version of the drug. [Assume for purposes of this question that the otherreporting requirements are satisfied.]
License for ABCDrug
Effective on theearlier of a number of alternative dates (the "Entry Date), Brand grantsGeneric what is termed an "exclusive non-transferable" license,without the right to sublicense, under the ABC Drug IP, to (1) use, offer forsale, sell, import and have imported the A/B Rated* Generic ABC Drug and theBrand-Supplied ABC Drug (i.e., not including the ABC Drug Reference Product)solely for sale in the United States and (2) manufacture and have manufacturedGeneric ABC Drug in the US, Canada, and potentially other countries. Brandagrees that it will not, and will not license a third party to, market, sell,supply, distribute or manufacture any Authorized Generic version of ABC Drug.Brand will, however, retain at all times the right to manufacture, market,sell, supply, and distribute a brand version of ABC Drug as well as otherformulations of ABC Drug. Brand also retains all rights to the ABC Drugtrademark, which are not conveyed to Generic.
* This A/Brating means that the generic version is bioequivalent to the brand version ofthe drug [it contains the same active ingredient in the same amount and dosageform as the brand version of the drug], and pharmacies may substitute thegeneric version when filling a prescription for the drug.
License for XYZDrug
Effective on theearlier of a number of alternative dates (the "Entry Date"), Brandgrants Generic what is termed an "exclusive non-transferable" license,without the right to sublicense, under the XYZ Drug IP, to (1) use, offer forsale, sell, import and have imported the A/B Rated* Generic XYZ Drug solely forsale in the United States and (2) manufacture and have manufactured Generic XYZDrug ii the US, Canada, and potentially other countries. The exclusive licenseterminates six months after the Entry Date, and becomes non-exclusive at thatpoint. During the period of exclusivity, Brand agrees that it will not, andwill not license a third party to, market, sell, supply, distribute ormanufacture any Authorized Generic version of XYZ Drug. Brand will, however,retain at all times the right to manufacture, market, sell, supply, anddistribute a brand version of XYZ Drug as well as other formulations of XYZDrug. Brand also retains all rights to the XYZ Drug trademark, which are notconveyed to Generic.
* This A/Brating means that the generic version is bioequivalent to the brand version ofthe drug [it contains the same active ingredient in the same amount and dosageform as the brand version of the drug], and pharmacies may substitute thegeneric version when filling a prescription for the drug.