Common use of Consequences of Other Institution Withdrawing from Paying or Defaulting on Payment of Patent Expenses Clause in Contracts

Consequences of Other Institution Withdrawing from Paying or Defaulting on Payment of Patent Expenses. If an Other Institution becomes a Withdrawing Party, then the other Party(ies) may elect to either terminate this Agreement by providing 30 days’ prior written notice, or to pay the Withdrawing Party’s Share of Patent Expenses (the “Covered Expenses”). If the other Party(ies) elect to pay the Covered Expenses, the “Consequences of Withdrawal” indicated in the Transaction Terms will apply, subject to the following: (a) If the Transaction Terms indicate a reduction in the Withdrawing Party’s Share of Net Consideration, that reduction will only be applicable to Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses; (b) If the Transaction Terms indicate a recovery of a multiple of the Covered Expenses, the Party(ies) paying the Covered Expenses will be entitled to recover that amount from the first of any License Consideration reasonably attributable to Patent Rights for which the other Party(ies) are paying Covered Expenses; (c) If the Transaction Terms indicate “Share only with Withdrawing Party’s Inventors,” then the Withdrawing Party’s Share of Net Consideration for any Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses will be reduced to zero, but the paying Party will pay the Withdrawing Party’s inventors a share of such Net Consideration in accordance with the paying Party’s policy; (d) If the Transaction Terms indicate “Meet and Confer,” then the Parties will confer and negotiate in good faith a fair accommodation to the other Party(ies) for the additional cost and risk, if any, assumed by paying the Covered Expenses; and (e) Nothing in this Section 2.3 will eliminate the right of a Withdrawing Party under Section 4.2(b) to reimbursement of Patent Expenses actually paid by the Withdrawing Party.

Consequences of Other Institution Withdrawing from Paying or Defaulting on Payment of Patent Expenses. 9 If an Other Institution becomes a Withdrawing Party, then the other Party(ies) may elect to either terminate this Agreement by providing 30 days’ prior written notice, or to pay the Withdrawing Party’s Share of Patent Expenses (the “Covered Expenses”). If the other Party(ies) elect to pay the Covered Expenses, the “Consequences of Withdrawal” indicated in the Transaction Terms will apply, subject to the following:: 8 The Model IIA gives the Lead Institution sole control over patent prosecution, subject to the requirement to work with the Other Institutions to make decisions and to give due consideration to any recommendations by the Other Institutions. The Lead Institution also has authority to select patent counsel. If an Other Institution requires approval rights over selection of counsel or prosecution decisions, Section 2.1 should be amended accordingly. 9 There is a wide divergence of opinions on the appropriate consequences of an Other Institution withdrawing from paying, or defaulting in payment of, patent expenses. The Model IIA allows the parties to choose between several alternative approaches. A discussion of the pros and cons of different approaches, as well as operational and other issues resulting from the different approaches, can be found at xxx.xxxxxxxx.xxx. (a) If the Transaction Terms indicate a reduction in the Withdrawing Party’s Share of Net Consideration, that reduction will only be applicable to Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses; (b) If the Transaction Terms indicate a recovery of a multiple of the Covered Expenses, the Party(ies) paying the Covered Expenses will be entitled to recover that amount from the first of any License Consideration reasonably attributable to Patent Rights for which the other Party(ies) are paying Covered Expenses; (c) If the Transaction Terms indicate “Share only with Withdrawing Party’s Inventors,” then the Withdrawing Party’s Share of Net Consideration for any Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses will be reduced to zero, but the paying Party will pay the Withdrawing Party’s inventors a share of such Net Consideration in accordance with the paying Party’s policy; (d) If the Transaction Terms indicate “Meet and Confer,” then the Parties will confer and negotiate in good faith a fair accommodation to the other Party(ies) for the additional cost and risk, if any, assumed by paying the Covered Expenses; and (e) Nothing in this Section 2.3 will eliminate the right of a Withdrawing Party under Section 4.2(b) to reimbursement of Patent Expenses actually paid by the Withdrawing Party.

Consequences of Other Institution Withdrawing from Paying or Defaulting on Payment of Patent Expenses. 9 If an Other Institution becomes a Withdrawing Party, then the other Party(ies) may elect to either terminate this Agreement by providing 30 days’ prior written notice, or to pay the Withdrawing Party’s Share of Patent Expenses (the “Covered Expenses”). If the other Party(ies) elect to pay the Covered Expenses, the “Consequences of Withdrawal” indicated in the Transaction Terms will apply, subject to the following: (a) If the Transaction Terms indicate a reduction in the Withdrawing Party’s Share of Net Consideration, that reduction will only be applicable to Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses; (b) If the Transaction Terms indicate a recovery of a multiple of the Covered Expenses, the Party(ies) paying the Covered Expenses will be entitled to recover that amount from the first of any License Consideration reasonably attributable to Patent Rights for which the other Party(ies) are paying Covered Expenses; (c) If the Transaction Terms indicate “Share only with Withdrawing Party’s Inventors,” then the Withdrawing Party’s Share of Net Consideration for any Net Consideration reasonably attributable to the Patent Rights for which the other Party(ies) are paying Covered Expenses will be reduced to zero, but the paying Party will pay the Withdrawing Party’s inventors a share of such Net Consideration in accordance with the paying Party’s policy; (d) If the Transaction Terms indicate “Meet and Confer,” then the Parties will confer and negotiate in good faith a fair accommodation to the other Party(ies) for the additional cost and risk, if any, assumed by paying the Covered Expenses; and (e) Nothing in this Section 2.3 will eliminate the right of a Withdrawing Party under Section 4.2(b) to reimbursement of Patent Expenses actually paid by the Withdrawing Party.