Common use of Reduced Royalty Rate Clause in Contracts

Reduced Royalty Rate. (i) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when there is no Valid Claim covering such Royalty Product in such country of sale within the Trubion Patent Rights or the Facet Applied Patent Rights, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * ] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). (ii) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when a competing product is being actively marketed and sold in such country, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * ] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). For purposes of this Section 9.5(e)(ii), “competing product” shall mean a third party protein therapeutic that (a) [ * ] the [ * ] (or a [ * ]) [ * ] of [ * ] and wherein such protein therapeutic is [ * ] or [ * ] or [ * ] to [ * ] through [ * ] the [ * ] (or a [ * ]), and (b) is [ * ] for the [ * ] the [ * ]. (iii) The Non-Opt-Out Party may, subject to Section 9.5(e)(iv), deduct from the royalties it would otherwise owe to the Opt-Out Party pursuant to this Section 9.5 for Third Party licenses entered into after the Signing Date, including Future Third Party Licenses, an amount equal to [ * ] percent ([ * ]%) of the amounts paid to Third Parties in consideration for intellectual property rights that the Non-Opt-Out Party reasonably believes are necessary in connection with the Development, Manufacture or Commercialization of a Royalty Product in the Field in the Territory. (iv) During the Royalty Period, the operation of Sections [ * ] and [ * ] individually or in combination shall not reduce by more than [ * ] percent ([ * ]%) the royalties that would otherwise have been due under in Section 9.5(a)-(d).

Reduced Royalty Rate. (i) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when there is no Valid Claim covering such Royalty Product in such country of sale within the Trubion Patent Rights or the Facet Applied Patent Rights, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * [*] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). (ii) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when a competing product is being actively marketed and sold in such country, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * [*] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). For purposes of this Section 9.5(e)(ii), “competing product” shall mean a third party protein therapeutic that (a) [ * ] the [ * ] (or a [ * ]) [ * ] of [ * ] and wherein such protein therapeutic is [ * ] or [ * ] or [ * ] to [ * ] through [ * ] the [ * ] (or a [ * ]), and (b) is [ * ] for the [ * ] the [ * [*]. (iii) The Non-Opt-Out Party may, subject to Section 9.5(e)(iv), deduct from the royalties it would otherwise owe to the Opt-Out Party pursuant to this Section 9.5 for Third Party licenses entered into after the Signing Date, including Future Third Party Licenses, an amount equal to [ * [*] percent ([ * ]%) of the amounts paid to Third Parties in consideration for intellectual property rights that the Non-Opt-Out Party reasonably believes are necessary in connection with the Development, Manufacture or Commercialization of a Royalty Product in the Field in the Territory. (iv) During the Royalty Period, the operation of Sections [ * ] and [ * [*] individually or in combination shall not reduce by more than [ * [*] percent ([ * ]%) the royalties that would otherwise have been due under in Section 9.5(a)-(d).

Reduced Royalty Rate. (i) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when there is no Valid Claim covering such Royalty Product in such country of sale within the Trubion Patent Rights or the Facet Applied Patent Rights, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * ] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). (ii) If a Royalty Product is generating Net Sales in a country during the applicable Royalty Period at a time when a competing product is being actively marketed and sold in such country, then the royalty rate applicable to Net Sales of such Royalty Product in such country shall be reduced by [ * ] percent ([ * ]%) of the applicable royalty rate set forth in Section 9.5(a)-(d). For purposes of this Section 9.5(e)(ii), “competing product” shall mean a third party protein therapeutic that (a) [ * ] the [ * ] (or a [ * ]) [ * ] of [ * ] and wherein such protein therapeutic is [ * ] or [ * ] or [ * ] to [ * ] through [ * ] the [ * ] (or a [ * ]), and (b) is [ * ] for the [ * ] the [ * ]. (iii) The Non-Opt-Out Party may, subject to Section 9.5(e)(iv), deduct from the royalties it would otherwise owe to the Opt-Out Party pursuant to this Section 9.5 for Third Party licenses entered into after the Signing Date, including Future Third Party Licenses, an amount equal to [ * ] percent ([ * ]%) of the amounts paid to Third Parties in consideration for intellectual property rights that the Non-Opt-Out Party reasonably believes are necessary in connection with the Development, Manufacture or Commercialization of a Royalty Product in the Field in the Territory. (iv) During the Royalty Period, the operation of Sections [ * ] and [ * ] individually or in combination shall not reduce by more than [ * ] percent ([ * ]%) the royalties that would otherwise have been due under in Section 9.5(a)-(d).