Common use of Third Party Royalty Set-Off Clause in Contracts

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.

Third Party Royalty Set-Off. In the event that Licensee or a Sublicensee is required to obtain a license from a third party to an Infringed Patent in order to identify, discover, develop, manufacture, use or sell a Type I or Type II Licensed Product, and Licensee or a Sublicensee obtains such a license after arm’s length negotiations, Licensee may offset [* * *] of any royalties paid under such third party license with respect to sales of Type I or Type II Licensed Products against the royalty payments that are due to Harvard pursuant to Section 4.5.1 or 4.5.2 with respect to sales of such Type I or Type II Licensed Product in such country. Notwithstanding the above, (a) the royalty payments to Harvard with respect to a Licensed Product that is the subject of an offset under this Section 4.5.3 may not be reduced by more than [* * *] of the amount otherwise due with respect to such Type I or Type II Licensed Product, (b) the offset that Licensee is entitled to make against royalty payments due to Harvard may not be greater than any offset that Licensee or a Sublicensee, as applicable, is entitled to make against royalty payments due to a third party licensee on account of royalty payments made under or by virtue of this Agreement and (c) in the event that a Sublicensee is required to obtain a license from a third party as described above, the percentage offset that Licensee is entitled to make against royalty payments due to Harvard with respect to Net 80198190_1 Sales by such Sublicensee may not be greater than any percentage offset that such Sublicensee actually makes against royalty payments due to Licensee with respect to such Net Sales.