Question
From:
(Redacted)
Sent:
Wednesday, November 04, 2009 12:30 PM
To:
Verne, B. Michael
Subject:Exclusive pharmaceutical license
Mike:
Hope all is well.I have a question regarding the an exclusive license whereby the Licensor will grantthe Licensee the exclusive right under the Licensor's patents and know-howowned or controlled by the Licensor to research, develop, manufacture, havemanufactured, use, sell, offer for sale, and import the Product in the Fieldworldwide. Product is a specific compound and Field means the use of theProduct for prophylactic and therapeutic uses in animals and humans for oralformulation or dosage form for a specific named diseases. The term of thelicense is until the patent rights owned by the Licensor expire.
Under thelicense, the Licensor and Licensee would have co-exclusive rights tomanufacture the API (the active ingredient) but the Licensor will only beallowed to sell whatever it produces to the Licensee and the Licensee has no obligationto acquire any of its API requirements from the Licensor should it choose tomake the API itself.
The question iswhether under these facts, the exclusive license is the equivalent of an assettransfer under the HSR Act and Rules. The Licensee will receive the right tomanufacture the API but the right will not be exclusive for all purposes or fora specific field of use.
The PNO hasadvised that the grant of an exclusive license must include the right tomanufacture the API to constitute an asset transfer but it is not clear whetherthis right to manufacture the API must be exclusive for all purposes, exclusivefor the purpose of manufacturing a specific compound or pharmaceutical product(interpretation 0512014), or merely the right to manufacture the API on anon-exclusive basis. If you could add some clarification regarding the PNO'sviews on these questions, it would be much appreciated.