Common use of Third Party Offset Clause in Contracts

Third Party Offset. If BI determines in good faith that, in order to avoid infringement of any Patent Right not licensed hereunder that Covers a Collaboration DART or Product, it is reasonably necessary to obtain a license from a Third Party in order to Develop, Commercialize, make, have made, use, offer for sale, sell or import such Collaboration DART or Product in a country in the Territory and to pay a royalty or other consideration under such license (including in connection with the settlement of a patent infringement claim), then (A) the royalty payments due under Article VI with respect to Net Sales for such Product in such country shall be reduced by *** of the amount payable by BI to such Third Party that are reasonably and appropriately allocable to the Collaboration DART or Product in such country, and/or (B) the milestone Payments due under Section 6.4(a)(iv-xi) and Section 6.5 with respect to the respective milestone payment for such Product if the Product is the *** Product in a Program for which milestones are due shall be reduced by *** of the amount payable by BI to such Third Party that are reasonably and appropriately allocable to the Collaboration DART or Product, provided, however, that (1) BI shall not be *** related to a Collaboration DART or Product to a Third Party that occur prior to *** for the relevant Collaboration DART or Product; and (2) in no event shall the aggregate deductions under this Section 6.6(c) reduce the royalty rate paid by BI in respect of Net Sales of such Product pursuant to Section 6.6(a) to less than *** and with respect to the milestone payments due under *** and Section 6.5 more than *** for such *** Product in a Program. For purposes of clarity, milestone payments which are due for the *** Product in a Program that is not a Replacement Product shall not be subject to any offset under this Section 6.6(c)(iii). BI shall be entitled to accumulate amounts permitted to be deducted in a prior period, but not deducted on account of such minimum royalty percentage, and deduct such amounts in a future period.

Third Party Offset. If BI determines in good faith thatIf, in order to avoid infringement of after the License Grant Date for any Patent Right not licensed hereunder that Covers a Collaboration DART Licensed Program, Gilead or Productits applicable Affiliate or Sublicensee: (a) is required, it is as reasonably necessary determined by Gilead or its applicable Affiliate or Sublicensee, as the case may be, to obtain a license from a any Third Party under any Patents controlled by such Third Party in order to Develop, Commercialize, make, have made, use, sell, offer for sale, sell sale or import a Program DART and/or a Licensed Product from such Collaboration DART or Product Licensed Program in a any country in the Gilead Territory without infringing such Patents, and pursuant to such license is required to pay a royalty or other consideration under any amounts to such license Third Party (including any upfront, milestone or royalty payments) in any Calendar Year, or (b) is required by any court of competent jurisdiction, in connection with its infringement of any Patents controlled by a Third Party in any country in the settlement of a patent infringement claim), then (A) the royalty payments due under Article VI Gilead Territory with respect to Net Sales for a Program DART and/or Licensed Product from such Licensed Program, to pay any amounts to such Third Party (including any lump sum or royalty payments) in any Calendar Year, then Gilead may deduct from the milestone payments and/or royalties (as elected by Gilead in its sole discretion) that would otherwise be due to MacroGenics with respect to such Program DART or Licensed Product in such country shall be reduced by Calendar Year *** of the amount payable paid by BI Gilead or its applicable Affiliate or Sublicensee, as the case may be, to such Third Party that are reasonably and appropriately allocable with respect to the Collaboration such Program DART or Licensed Product in such countryCalendar Year (where any such amounts paid by Gilead or its applicable Affiliate or Sublicensee to such Third Party shall be equitably allocated among all products of Gilead or its applicable Affiliate or Sublicensee, and/or as applicable, covered by such license or subject to such infringement); provided, however, that such deduction shall not reduce (BA) the milestone Payments amount of milestones due under Section 6.4(a)(iv-xi) and Section 6.5 to MacroGenics with respect to the respective milestone payment such Program DART or Licensed Product for such Product if the Product is the *** Product in a Program for which milestones are due shall be reduced by Calendar Year to less than *** of the amount payable by BI of milestones that otherwise would have become due with respect to such Third Party that are reasonably and appropriately allocable to the Collaboration Program DART or Product, provided, however, that Licensed Product for such Calendar Year or (1B) BI shall not be *** related to a Collaboration DART or Product to a Third Party that occur prior to *** for the relevant Collaboration DART or Product; and (2) in no event shall the aggregate deductions under this Section 6.6(c) reduce the royalty rate paid by BI Gilead in respect of Annual Net Sales of such Licensed Product pursuant to Section 6.6(a) in such Calendar Year to less than *** of Annual Net Sales of such Licensed Product in such Calendar Year, in each case ((A) and (B)) with any excess deduction carried over and applied to amounts due to MacroGenics with respect to the milestone payments due under *** and Section 6.5 more than *** for such *** Program DART or Licensed Product in a Program. For purposes of clarity, milestone payments which are due for the *** Product in a Program that is not a Replacement Product shall not be subject to any offset under this Section 6.6(c)(iii). BI shall be entitled to accumulate amounts permitted to be deducted in a prior period, but not deducted on account of such minimum royalty percentage, and deduct such amounts in a future periodsubsequent Calendar Years.