Question
From: (redacted)
Sent: Monday, October 06, 2008 4:17 PM
To: Verne, B. Michael
Cc: (redacted)
Subject: Licensing Question Relating toRetained U.S. Manufacturing Rights
Mike,
(Redacted) and I are dealing with a licensingtransaction which we believe is not HSR-reportable (i.e., does not constitutethe transfer of an asset), and covered by at least one recent interpretation,but we wanted to confirm that you agree.
As in the interpretation listed directlybelow, this scenario involves an "exclusive" license in which alicensor retains shared manufacturing rights in the U.S. (i.e., both it and thelicensee will have the right to manufacture in the U.S.), but who iscontractually barred from selling any of those manufactured products in theU.S. Also, as in the situation referenced in the attached letter, here thelicensor retains rights to develop and co-promote the product in the U.S. andalso the right to manufacture/license a third party to manufacture the productin the U.S. for sale outside the U.S.
http://www.ftc.gov/bc/hsr/informal/opinions/0702018.htm
Our question is whether it makes anydifference that -for the time being -all such manufacturing (by both parties)is taking place outside the United States and where it's not clear when, or if,that might change. It seems to us that the fact that the licensor retains --ingood faith --the right to manufacture in the U.S., if and when it so chooses,is enough to fit the scenario within the coverage of the interpretation above.The logic of another interpretation, attached below, would seem to also pointin that direction, although based on different facts.http://www.ftc.gov/bc/hsr/informal/opinions/0002004.htm
Thanks in advance. Please let me know whatyou think or if you need any additional facts (in which case we will look toarrange a call that works best with your schedule this week).